Tensions in the Middle East rise, following the Iran-US talks and the lack of an agreement. Iran is conducting military operations in the Strait of Hormuz, alongside Russia and China, key heavyweight supporters. The price of oil is on the rise, surging above US$65/barrel, reflecting the increasing probability of kinetic action. In the US Asset Manager, Blue Owl, restricted client liquidity. This may be a ‘canary in the coal mine’, with liquidity tightening and demands that the Fed act in response. The US Dollar surged higher, with the GBP crashing below 1.3450, while the EUR plunged to 1.1750.The run to the reserve was reflected in commodity currencies, with the NZD falling to 0.5950 before rebounding to .5975, while the AUD dropped to 0.7050. The RBA is under some pressure, but there were signs of relief, when Unemployment data confirmed stability. The Middle East looks set to be the hotspot to watch, while Asian markets trade softly, during the ‘Lunar New Year’ celebrations.
