Ratcheting Up
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How are rising geopolitical tensions between the U.S. and Iran affecting global markets?
Well, unless there's a backdown on either side, things are ratcheting up in the Middle East. Donald Trump is basically promising that all hell will very lease, and Iran is threatening to do more to the infrastructure of neighboring nations whilst the straits stays closed. So that and a quiet week for data. Just how much volatility can we expect this week? It's Tuesday, it's the seventh of April, twenty twenty six. It's the morning call from NAB. Good morning. Well, oil is still rising up naught point seven percent for WTI, not point eight percent for Brent now, which is around a hundred and ten a barrel. It has been a couple of dollars higher than that. The US f uh dollar fell a little on Friday, it's now back below a hundred on the DXY, the Aussie gained 0.4%, it's sixty-nine point two US cents.
The euro and the pound climbed 0.3%. Equities rose a little on Friday in the United States, half a percent for the Nasdaq, third of one percent. cent for the S P but markets closed in Europe of course and many other places for Good Friday, uh which is why there's not a lot to talk about with bond yields either and why today uh we really not only contend with a catch up from a four day weekend but also the precarious situation in the Middle East. Uh Nabs Taylor Nugent is with me, so the quote the entire country can be taken out in one night and that night w might be tomorrow and might be tomorrow That's Donald Trump yesterday. Thank God for that word might. Uh meanwhile, Iran has rejected a ceasefire bid.
So as an investor, how do you even contemplate how you react to this may or may not happen situation for the next day or two?
Yeah, good good morning, Phil. It's uh certainly very, very challenging to price.
What level of market volatility can investors expect this week amid the Middle‑East flashpoint?
And I think if you look at the kind of you know, the market reactions since or the market moves since we spoke on on Thursday morning, um, you know, it suggests that the the way to price it is to keep your head down. There hasn't really been that much net movement despite, you know, a a fair few headlines o over the weekend. If you look at currency markets, for example, the Aussie dollar, it's now sitting around sixty nine, nine ten That's um, you know, marginally above the the sixty-nine oh nine level than we when we spoke ear early Thursday and you know US equities are holding uh a little bit higher, holding on to to gains on um uh that they made on on Monday. So yeah, fairly fairly small market moves, but as you say, those those headlines uh continue to be in focus.
Um you mentioned that uh that key quote from Trump who was speaking in in the last couple of hours, um the the kind of the latest expiry for for Trump's uh, you know, ultimatum, the the deadline for for some um resolution to to the conflict is is Tuesday at eight PM um in in eastern time in in the US. So that's coming up, although it is you know, the the commentary suggests that, you know, he's reluctant to to see that extend again if you take it at face value, but I think it is worth noting that it has already been extended a couple of times. Um but yeah, over the weekend there was that that news that um Iran uh rejected a a forty five day ceasefire proposal. Um came back with its own kind of um ten point plan which was which was also rejected and and so there's no no resolution there and and strikes continue and that threat of a an escalation in in strikes from from the US is there?
Well
Well, yeah. So th the president is threatening to strike energy infrastructure within Iran and bridges and they've already started down that bureau. Basically they want to stop Iran getting any revenue from energy, and Iran have said, you know, they're gonna step up their response to Persian Gulf states hitting their energy and desalination plants, whilst obviously continuing to stop trafficking through the Hormuz stra straight. So the problem in all of this is that That logic isn't going to resolve this situation, not in the short term. So you wonder whether this is going to be a a very long term war. And OPEC plus is saying, Well look, we're going to increase our production targets, which is which is fine, but it's really not going to make a job of difference if a chunk of those uh that that production has to get through the whole move straight.
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Chapters
8 chapters
1
How are rising geopolitical tensions between the U.S. and Iran affecting global markets?
0:01–1:35
2
What level of market volatility can investors expect this week amid the Middle‑East flashpoint?
1:35–3:57
3
How did oil prices and currency markets react to the latest Middle‑East developments?
3:57–6:14
4
What is the deadline for President Trump’s ultimatum to Iran and why does it matter?
6:14–8:05
5
How is the closure of the Strait of Hormuz influencing Brent and WTI price dynamics?
8:05–9:27
6
Why did the U.S. non‑farm payrolls surprise on the upside and what does it mean for the Fed?
9:27–11:06
7
What do the ISM services employment and price‑paid numbers reveal about U.S. labor market health?
11:06–13:17
8
How might Australia’s household‑spending data and upcoming inflation prints shape the outlook?
13:17–14:22