13.06.25 - Middle East conflict back in focus

Israel launched a series of airstrikes on Iran early Friday local time, marking a significant escalation in the ongoing tensions between the two nations. Israel confirmed it targeted sites linked to Iran’s nuclear program. Iran’s state media reported multiple fatalities in Tehran, including the death of the commander-in-chief of Iran's Islamic Revolutionary Guard Corps. Additionally, media reports indicate that Iran has launched over 100 drones toward Israel in retaliation.

Markets: oil-prices surged by 7-8%, currently trading up +5%; risk-off and safe haven stance, equity indices declining globally, Swiss franc and Japanese yen have strengthened while US Treasury yields have fallen; Cryptos are deeply in red while gold sees an up-tick.

My view: Amid an already more fragile picture of the global economy outlook, with heightened uncertainties, this conflict adds another layer of risk that undermines the potential for sustained market optimism. If the situation escalates further, oil prices are likely to remain elevated for an extended period. Rising energy costs could intensify inflationary pressures, while simultaneously weighing on global growth, presenting significant headwinds for economic stability.

This scenario would certainly prevent any potential for higher stock prices.

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