Description
Edmund Shing, Chief Investment Officer and Guy Ertz, Chief Investment Advisor, at BNP Paribas Wealth Management, discuss the impact of escalating geopolitical tensions in the Middle East.
Israel-Gaza tensions have been evident since October 2023, so not a new situation;
Global diplomatic efforts have intensified in an effort to avoid escalation of tensions;
Brent crude oil price around $90/barrel already incorporates a substantial geopolitical risk premium, but which has not increased of late;
Gold prices continue to rise towards $2400/ounce, but driven not by investor safe-haven demand, rather by central bank and Chinese consumer buying;
Previous periods of regional conflict have had a surprisingly limited and short-term impact on global financial markets historically;
Bigger impact on markets thus far has rather come from upside US inflation and growth surprises pushing US Treasury yields and US dollar higher, pressuring stock markets after a strong 6-month advance
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