© Reuters. A missile is launched from a warship through the U.S.-led coalition operation towards army targets in Yemen, aimed on the Iran-backed Houthi militia that has been concentrating on worldwide transport within the Purple Sea, from an undisclosed location, on this ha
(Reuters) – The US and Britain launched strikes from the air and sea towards Houthi army targets in Yemen in response to the motion’s assaults on ships within the Purple Sea, a dramatic escalation of the Israel-Hamas warfare in Gaza.
Oil climbed [MKTS/GLOB] and inventory markets tensed on the information.
Feedback from buyers and analysts:
KHOON GOH, HEAD OF ASIA RESEARCH, ANZ, SINGAPORE
“I think at this stage, it’s difficult to predict. Whilst the attacks have already seen disruptions and diversions of shipping and that has already caused quite a sharp jump in shipping freight rates just in the last few weeks, if this strike is able to…resolve the issue and shipping lanes can be secured again and things normalise, then that’ll be positive as we’ll see a normalisation of freight rates.
“I believe the priority is that if this begins to escalate… which is able to trigger a possible spike up in oil worth particularly, and additional disruptions in transport lanes.
“Markets are taking a wait-and-see approach for the time being, hence we’re not seeing too much of a reaction. If we see a massive escalation of the situation…then the traditional flight-to-safety will see U.S. Treasuries, safe-haven currencies like yen and Swiss franc benefit.”
SHANE OLIVER, CHIEF ECONOMIST, AMP (OTC:), SYDNEY
“The U.S. and UK launching air strikes on Houthis in Yemen is adding to the risk of Iran being directly drawn into the conflict which would threaten oil supplies.
“The creeping widening within the Israel/Hamas battle poses a danger to international progress and inflation, for instance Houthi assaults on Purple Sea transport including to move prices as ships must go round Africa.
“A weaker patch is often evident into February or March after seasonal strength from October. While we expect shares to provide reasonable returns this year, they are likely to be more constrained and vulnerable than last year and worries about delays in rate cuts, recession and geopolitics could drive a deeper first half pullback than seen last year.”
ROB CARNELL, ASIA-PACIFIC HEAD OF RESEARCH, ING, SINGAPORE
“When we got in this morning after what was fairly disappointing U.S. inflation data, you’d have expected bond yields to spike higher on that. In fact, they did the opposite. That’s probably a reaction to what’s been happening in the Middle East with the U.S., UK air strikes on the Houthis. There will be a shift back towards risk aversion. This hasn’t fully blossomed out into a proper risk-off mode.
“I believe individuals are on the lookout for slightly little bit of security in the meanwhile. Probably, additionally, coming forward of this weekend’s Taiwan election, most individuals are simply pondering ‘possibly I wish to take slightly little bit of danger off the desk’, and that is possibly an element as nicely. So I believe the bond market’s most likely the clearest indication of the place issues are going.”