4 shocks in global markets after Trump announced the continuation of the war against Iran
US President Donald Trump’s statements about the continuation of the military operation in Iran sparked mixed reactions in global markets, as gold and stock prices fell, the dollar rebounded, while oil prices jumped to more than $100 a barrel.
Trump said in a televised speech to the Americans, on Wednesday evening, that the United States will strike Iran. "Very strongly" Within weeks, indicating that key military objectives were close to being achieved and that the conflict was drawing to a close. However, no timetable for withdrawal was set, keeping investors confused about the scope and duration of the campaign.
Gold ends 4-day gains
Gold prices fell today, Thursday, from their highest levels in two weeks, after Trump announced that Washington would continue its military campaign in Iran.
The dollar index, which measures the value of the US currency against 6 other currencies, rose by 0.5% to reach 100.05, after falling by nearly 1% over the past two days amid optimism that the war will end soon. The euro also fell by 0.5% to $1.1533.
Stocks relapse after strong rise
US stock futures fell by 1.3%, while European futures fell by more than 2%. Asian stocks suffered heavy losses, with Japan’s Nikkei index falling 2.4%, and South Korea’s Kospi index falling 4.7%.
MSCI’s broadest index of Asia-Pacific stocks outside Japan also fell by more than 2%, with almost all regional stock exchanges recording a decline.
And Asian stocks achieved record highs of 9% on some stock exchanges yesterday, Wednesday, driven by hopes of ending the Iran war.
The specter of recession returns
Analysts expect that risk aversion will worsen ahead of the weekend, with many global markets closed on Friday. Investors are likely to quickly reduce their investments, fearing that any prolonged disruption to shipping traffic through the Strait of Hormuz could deal a severe blow to global growth.
US Treasury yields rose in Asia amid fears that rising inflation will dispel the prospects of lower interest rates. 10-year bond yields rose by 5 basis points to 4.376%.
Trump’s comments also revived concerns about stagflation.
The bond market decline in Europe is likely to continue, with German bond futures and French bond futures also pointing to a decline.
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