Israel’s attack on Iranian nuclear facilities and military targets has caused a clear tendency to avoid risk in financial markets.

Investors reacted immediately, resorting to safe shelters, as is common in times of increased geopolitical tensions. The US dollar became the clear winner, recovering about half of his losses for the week, and both the General and the Swiss franc overwhelmed.

Purpose of oil prices

Another major impact on markets is the impact of the attack on global oil prices, which launched more than 10% at some point at night. So far, at least, Israel has not immediately targeted the supply of Iran’s oil, which seems to remain unaffected.

The great fear for investors is that a escalation of tensions will not only increase the risk of a prolonged conflict, but could also disrupt Iranian oil production.

Ebury expects that safe refuge assets will receive strong support in the coming days, as markets are preparing for additional retaliation attacks and the possibility of a wider conflict.

The rise in oil prices also has a wider impact, as it could burden global growth prospects and maintain inflationary pressures higher for a longer period, which complicates the relaxation cycle of monetary policy between the world’s large central banks.