The S&P/ASX 200 and the Australian dollar are poised to drop on Monday on worries that Iran’s first direct attack on Israel could trigger the regional war investors have been afraid of.
Already a subscriber?Fears that the Middle East conflict is about to break into region-wide war pushed up oil prices, presenting a fresh threat to global inflation and dashing investors’ hopes of interest rate relief this year.
Joe Biden meets with his National Security team on Saturday at the White House on Iran’s attacks on Israel.It represents Iran’s first direct attack on Israeli territory. While the US pledged “ironclad” backing for Israel, President Joe Biden said his government would oppose any Israeli counterattack against Iran.
Economists predict oil prices will top $US100 for the first time since mid-2022. The group of major oil producers known as OPEC+ will extend their curbs on output, strategists speculate. “This outcome would make it difficult for central banks to contemplate interest rate cuts later this year,” Mr Bassanese concluded.Reflecting the anxiety surrounding global growth, spot gold prices hit another all-time high at $US2431.
“To the extent that the drone attacks represent nothing more severe than might have been anticipated on Friday, it might prove to be a case of ‘sell the rumour, buy the fact’ comes Monday,” he said. This assumes Israel is persuaded by its allies not to initiate further near-term action that risks further stoking Iran.
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