The chief market analyst of DM BOŚ, Marek Rogalski, pointed out that the president of the USA Donald Trump did not rule out that the military operation against Iran could last up to four weeks “and this will now be a key aspect for the markets.”
The war in Iran and the stock market. “Worst Case Scenario”
– The worst-case scenario is a long conflict, lasting at least several weeks, but investors may also try to discount unexpected scenarios, such as an attempt by the current regime in Tehran to negotiate with the Americans and quasi-Venezuelan scenario – he pointed.
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He admitted that The “strong surprise” is the blockade of the Strait of Hormuz and Iran's retaliationwhich was not limited only to Israel and US military bases in the region.
– As a result, we have a strong movement in crude oil and a flight of investors in bullion, and on the FX market – in the dollar. Thus, investors are running away from risky assets, which is no surprise in the current situation, when the duration of the armed conflict in the Middle East and its effects are difficult to assess, he emphasized.
Attack on Iran. First market reactions and forecasts
Marek Rogalski pointed out that the first reaction on the markets after the weekend's events in the Middle East was to strengthen the dollar, but now the markets are starting to “tone down emotions”. – The American currency begins to correct its movement in the morning. In the case of euro/dollar this means a rebound from around 1.17, to which we quickly dropped from closing around 1.1815 on Friday evening, to 1.1745 currently, he added.
– Iran is escalating and trying to involve the entire region in the conflict, which is particularly dangerous. However, it is worth asking whether we should really expect that the ayatollah regime will fall, or whether some form of agreement with the US will be reached at the price of pulling Iran away from the Moscow-Beijing axis? Without a land operation (and this is not being taken into account), an actual change of power in Tehran may be quite difficult. Experience from Iraq also shows that it would not be a tool to achieve lasting peace – emphasized the DM BOŚ analyst.
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The Iranian-controlled Strait of Hormuz, connecting the Persian Gulf with the Arabian Sea and the Indian Ocean, is a key point on the world trade map. Following Saturday's US and Israeli attacks, the Iranian Revolutionary Guard (IRGC) announced that no units were allowed to enter the strait; hundreds of tankers were disabled on both sides.
Between one-fifth and one-third of the world's maritime transport of crude oil and a large proportion of natural gas flows through the strait. It is the only sea route for oil from Iran, Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait and Iraq.
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