"Firstly, Friday night/Saturday morning brought the long-awaited Israeli retaliation to the Iranian missile barrage launched towards the start of the month. At first glance, the nature of this retaliation seems relative limited, with strikes having targeted primarily military installations, and not oil or nuclear infrastructure."
"If so, this could indeed be a situation similar to April, where plenty of face has been saved on both sides, and tensions now begin to subsided, even if only in the short-term. If so, one would expect a degree of risk premium to be priced out of crude, and for the bulls to lose one of their only sources of support - particularly with the demand outlook still rather dour."
"Secondly, is the matter of Japanese lower house election, where the ruling LDP-led coalition have failed to win a majority for the first time since 2009 - Ishiba's big gamble just a month into the job has badly backfired. A significant degree of uncertainty now lies ahead, as the LDP scramble to find additional coalition partners in a bid to form a Government."
"While that search goes on, both the JPY and Japanese equities are likely to come under pressure, as a greater political risk premium is priced, even if the knee-jerk move in the Nikkei has been to the upside, solely due to the currency correlation."
Collection
[
|
...
]