The escalating war in the Middle East continues to dominate markets. Trump has announced that the war may go on for at least another 4-5 weeks, while the Iran ramp up attacks on US bases and infrastructure, across the Middle East. The Iranians have also reiterated the closure of the Straits of Hormuz, attacking oil tankers in the vicinity. Oil & Gas prices skyrocketed on the news, while those most vulnerable to oil & gas prices rises and supply issues, were slammed. Europe suffered massive losses on equity markets, for the second day in a row, while inflation now becomes a big and growing concern. Energy is the key to inflation and the lack of it, sends prices through the roof. The US Dollar continued to attract safety flows, with the EUR crashing below 1.1550 then rebounding past 1.1600, while the GBP tumbled to 1.3300 before recovering to 1.3350.Commodity prices also came under attack, and this further undermined the associated currencies, hit hard already by the surging reserve. The AUD collapsed to 0.6950, at one stage overnight, while the NZD spiralled below 0.5850 and back to .5900. Expect further extreme market volatility, as the impact of extended and escalating war, becomes more apparent.
