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Markets reacted sharply to the escalation in US-Israel-Iran tensions, with WTI crude surging 8% to $72.40 and gold rising 2% to $5385 as investors sought safe-haven assets. The US dollar and Swiss franc led in forex, while the Australian dollar fell 0.82% against the US dollar. Japanese equities opened down 1.5% amid risk-off sentiment, and Bitcoin remained flat near $66K. The Israeli military's continued strikes on Tehran heightened geopolitical uncertainty, pushing USD/JPY to 156.68 as oil prices climbed. Analysts noted that oil's volatility could influence inflation expectations, with gasoline prices likely to rise in the coming days. The surge in oil and gold reflects heightened risk aversion, with energy markets pricing in potential supply disruptions. The dollar's strength underscores its role as a safe-haven currency amid geopolitical turmoil. Traders are closely monitoring whether the oil rally sustains or reverses, as this could dictate broader market sentiment. The Nikkei's decline highlights regional spillover effects, while the flat Bitcoin price suggests crypto markets are underperforming compared to traditional safe havens. For global investors, the key focus remains on oil's trajectory and its inflationary implications. Central banks may face renewed pressure to adjust monetary policy if energy prices persistently rise. MENA investors, particularly in oil-dependent economies, should watch regional currency movements and inflation data. The next 20 hours of oil trading will be critical in determining whether the current rally holds, with USD/JPY and AUD/USD likely to remain volatile.
