By Kathleen Brooks, research director at XTB
Geopolitics continues to dominate the market this morning, and oil is higher by a further 1.6% as retaliation risks grow, after Iranian missiles struck the interior of Israel. Iran has extended a flight suspension until tomorrow morning, which suggests that it expects Israel to strike at some point today. US and UK forces helped Israel to deter the latest missile attack, however, this is still a very fluid situation. While this situation remains ongoing, we expect it to have the most impact on commodities, especially oil. Right now, US equities look the most exposed, because the US could get dragged further into the conflict as it has said that it will defend Israel. There are many other factors that could impact markets this week, but the escalation in geopolitical risks in the Middle East is a key downside risk.
