A look around Markets as Iran operations begin – Market reactions

This weekend marked the beginning of a foreseen but still shocking operation in Iran as US and Israeli forces aim to topple the Islamic Regime.

Killing the Ayatollah Ali Khamenei in the first strikes, the battle is still anticipated to last around four weeks, as declared by President Trump and Head of the Department of War Pete Hegseth. Strikes on IRGC facilities and missile launchers are numerous and continuous.

At the same time, the Islamic regime retaliates against US positions across the Middle East, but has also sent missiles and drones against several Arab nations.

This includes the United Arab Emirates, Bahrain, Jordan, Kuwait, and Oman.

Hezbollah, a terrorist organization affiliated with the current Iranian regime, has also joined the conflict by sending drones and ballistic missiles not only to Israel but also to Cyprus, where UK military bases are located. The organization's leader has been reported to have been eliminated during the Middle Eastern afternoon.

A few themes concerning Markets: a prolonged war affecting risk sentiment amid already chaotic Market conditions, and what happens to the Strait of Hormuz.

This Strait, located between the Arabian Sea and the Persian Gulf, just below Iran, is where more than 90% of Oil flows to Asia. Its closure during the 1970s preceded a global Oil supply crisis, leading to severe price rises and disruptions to international trade; hence, anything happening there could have a severe impact.

Communications and announcements are to be closely tracked to monitor how the conflict advances. The longer it lasts, the more erratic things can become.

Check out our freshly released Podcast episode to learn more.

Let's dive into the major movers of this tense weekly open.

Discover: Markets Today: Chaos as Middle East conflict widens, natural gas jumps 22%, DXY at five-week highs & FTSE 100 retreats

Financial Markets are getting rocked from the latest developments, but reactions have remained relatively contained.

WTI (US) Oil prices have gapped up to $73.50 before easing to the current ~$71.50 region, still higher by 6.50% relative to Friday's close. All energy products are experiencing similar rises.

Brent (UK) prices have however spiked even higher, gapping close to 10% to $80.00 and also somewhat retraced back to its opening price.

Metals have offered quite another, less predictable dynamic during the overnight/morning session.

Gold is running higher while others are easing slightly, with Platinum down 2.50% and Silver breaching back below $90 per oz.

I invite you to check out our Gold short-term analysis right here. More will be coming throughout the week.

The US Dollar is also seeing a significant rise in this morning's action as safe-haven flows race back towards the Reserve currency.

The petrodollar trade quickly returns when Middle East conflicts rise. It is a first however in recent times, as the Greenback had been getting sold off on recent risk-aversion.

It's consolidation near 98.00 (Dollar Index) had foreshadowed a rally on such the occurrence. (I hope some observed our recent US Dollar piece!)

Watch the reactions as it nears a key resistance (98.80 to 99.00) and been retracing slightly since.

If it goes back to 98.00, dip-buying would not be surprising.

European and Global indexes have corrected roughly in the risk-off sentiment. On the other hand, while US benchmarks fell during the futures session, dip-buying seems to be ongoing.

A detailed look into US Stock Markets will be coming at the top of the hour.

Cryptos corrected over the weekend, moving lower initially on the news, but are now bouncing sharply higher

Bitcoin remains above its 200-Day Moving Average near $69,000.

Safe Trades and keep track of the evolution of the conflict ahead!

Follow Elior on Twitter/X for additional Market News, Insights and Interactions @EliorManier

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