Global asset markets are roiling in the wake of U.S. and Israeli airstrikes on Iran.
According to Reuters on the 1st (local time), in over-the-counter trading that day, Brent crude was trading around $80 per barrel, up 8–10% from Friday's close. As tensions in the Middle East rise and the Strait of Hormuz is effectively shut, an even sharper surge is expected after exchanges open on the 2nd.
Currencies once seen as safe havens are also wobbling. In New York foreign exchange trading that day, the euro was at $1.1769, down 0.4% from Friday's close. In particular, the euro fell 0.6% against the Swiss franc to 0.90391 Swiss francs, the lowest since 2015.
The Swiss franc, classified as a safe-haven asset, also gained 0.3% against the U.S. dollar, and the dollar-yen rate slipped to 155.85 yen, with the yen strengthening. Gold futures also rose 2% that day, underscoring a deepening flight to safe assets amid heightened geopolitical risk.
By contrast, as investors shun risk assets, bitcoin fell. Bitcoin tumbled to the $64,000 level immediately after the U.S. and Israeli strikes but has since recovered slightly.
Samy Chaar, chief economist at Lombard Odier, told Reuters, "We are expecting two scenarios," adding, "The first is if limited disruptions in the global energy market have a contained impact on the world economy, and the second is if prolonged conflict and escalation lead to an oil shock."
He added, "Right now we see the first scenario unfolding," but warned that if the second scenario materializes, "commodities, bond yields, currency, oil-sensitive equity sectors, inflation expectations, the path of monetary policy, and, in the case of a prolonged closure of the Strait of Hormuz, even economic growth would all be affected."