Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

GLOBAL MARKETS-Oil, safe havens surge after U.S. strikes kill Iran commander

Stock Markets Jan 04, 2020 07:42
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. GLOBAL MARKETS-Oil, safe havens surge after U.S. strikes kill Iran commander
 
CL
-2.75%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
2222
-0.15%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
-0.92%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MIWD0...
+0.69%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
STOXX
-0.03%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US10Y...
-3.19%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

(Adds oil, gold settlement prices)

* Killing of Iranian commander douses equity market rally

* Oil, gold prices surge after strike in Baghdad

* Scramble for safety boosts yen, Swiss franc, Bunds

* European, U.S. shares fall less than 1%

By Herbert Lash and Marc Jones

NEW YORK/LONDON, Jan 3 (Reuters) - Oil prices surged as much as $3 a barrel as gold, the yen and safe-haven bonds all rallied on Friday after the U.S. killing of Iran's top military commander in an air strike in Iraq ratcheted up tensions between Washington and Tehran.

Traders were spooked after the death of Major General Qassem Soleimani, head of the elite Quds Force who was also one of Iran's most influential figures, and by Iranian Supreme Leader Ayatollah Ali Khamenei's vow of revenge. Secretary of State Mike Pompeo said the strike aimed to disrupt an "imminent attack" that would have endangered Americans in the Middle East. markets saw the most dramatic moves, with Brent crude futures leaping as much 4.5% to $69.20 a barrel, the highest since Saudi crude facilities were attacked in September.

The impact hit almost every asset class. O/R

Europe's broad STOXX 600 index .STOXX fell as much as 1% and shares on Wall Street almost the same as New Year optimism, which had pushed equity markets to new records, evaporated.

The yen JPY= rose half a percent against the dollar to a two-month high, the Swiss franc EURCHF= hit its highest against the euro since September and gold prices XAU= climbed to a four-month peak, racing past the key $1,550 an ounce level.

"Geopolitics has come back to the table, and this is something that could have major cross-asset implications," said Salman Ahmed, Lombard Odier's chief investment strategist. is critical is how it pans out in the next few days," Ahmed said. "Whether it turns into a theme depends on Iran's reaction and then the U.S. response."

Iran promised harsh revenge. Soleimani's Quds Force and its paramilitary proxies have ample means to mount a response. September, U.S. officials blamed Iran for attacking the oil installations of Saudi Aramco (SE:2222), the state energy giant and the world's largest oil exporter. Iran has denied responsibility for the strikes and accused Washington of war-mongering.

The Trump administration then did not respond, beyond heated rhetoric and threats, and markets settled down within a week after Brent surged 14.6%, its biggest one-day percentage gain since at least 1988.

The U.S. government and others on Friday urged their citizens in the region either to return home or to stay away from potential targets and public gatherings. Hassan Rouhani said the killing would stiffen Iran's resistance to the United States.

Pompeo said in a round of TV interviews that the United States remained committed to de-escalation with Iran but that it had needed to defend itself.

"He (Soleimani) was actively plotting in the region to take actions - a big action as he described it - that would have put dozens if not hundreds of American lives at risk. We know it was imminent," Pompeo told CNN.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.36%, while its emerging markets index lost 0.37%.

Stocks on Wall Street opened down 1%, the lowest point of the session as losses were pared during the session.

The Dow Jones Industrial Average .DJI fell 161.52 points, or 0.56%, to 28,707.28. The S&P 500 .SPX lost 13.49 points, or 0.41%, to 3,244.36 and the Nasdaq Composite .IXIC dropped 42.35 points, or 0.47%, to 9,049.84.

The global gauge and Wall Street indices set record closing highs on Thursday, extending the year-end rally in equities into 2020.

Brent LCOc1 hit a peak of $69.50 a barrel, its highest since mid-September, though it later pared some losses to settle $2.35 higher at $68.60.

West Texas Intermediate (WTI) crude CLc1 rose $1.87 to settle at $63.05 a barrel, after earlier spiking to $64.09 a barrel, its highest since April 2019.

SCRAMBLE TO SAFETY

Yields on German Bunds and U.S. Treasuries - the world's benchmark government bonds that are typically seen as the safest assets - fell sharply.

The 10-year Bund DE10YT=RR yield fell 7 basis points to a two-week low of -0.299%, while Bund futures FGBLc1 were up 0.58 percent, at 172.26 euros.

Benchmark 10-year Treasury notes US10YT=RR rose 26/32 in price to yield 1.7916%, from 1.882% late on Monday.

Spot gold prices hit a high of $1,553.20 an ounce. U.S. gold futures GCcv1 settled 1.5% higher at $1,552.40.

The dollar index .DXY rose 0.01%, with the euro EUR= down 0.04% to $1.1166. The Japanese yen JPY= strengthened 0.51% versus the greenback at 108.03 per dollar.

The focus on geopolitics meant markets paid little attention to stronger-than-expected data from France, where inflation rose 1.6% year-on-year in December, beating analysts' expectations for a 1.4% rise.

German inflation figures were also higher, although unemployment in Europe's largest economy rose more than expected. U.S. manufacturing sector contracted in December by the most in more than a decade, with order volumes crashing to near an 11-year low and factory employment falling for a fifth straight month, the Institute for Supply Management said. Geopolitical tensions rattle world markets

https://tmsnrt.rs/2rVbblK

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

GLOBAL MARKETS-Oil, safe havens surge after U.S. strikes kill Iran commander
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email