\u201cThe market is basically waiting to see if this is it, or if there will be more retaliation from Iran.\u201d (Reuters)<\/span><\/figure>\n<\/div>\nAn Iranian rocket attack on U.S. forces based in Iraq has sent markets into turmoil and investors racing for safety. Here are analyst views on the market moves:<\/p>\n
Sean Callow, FX analyst, Westpac, Sydney<\/strong><\/p>\n\u201cThe weight of money is counting on a replay of the price-action on Monday. Essentially people are betting that this is not going to be our main focus three months from now.\u201d<\/p>\n
David Kotok, Chief Investment Officer, Cumberland Advisors, Florida<\/strong><\/p>\n\u201cThe market looks at\u2026single events and doesn\u2019t say it is a sequence intensifying to larger scale war. It is pricing in tension and risk but not the development of larger scale war.\u201d<\/p>\n
James McGlew, Executive Director Of Corporate Stockbroking, Argonaut, Perth<\/strong><\/p>\n\u201cWe are getting exaggerated moves but that\u2019s of course volatility playing. Markets simply hate uncertainty. It\u2019s an old adage but it definitely holds true in the current situation \u2013 markets can price risks but they can\u2019t price uncertainty. \u201cI don\u2019t think it\u2019s going to be a bloodbath in the equities market but this volatility certainly takes the wind out of the sails.\u201d<\/p>\n
Cliff Tan, East Asian Head of Global Markets Research, MUFG, Hong Kong<\/strong><\/p>\n\u201cI think the market yesterday was very short-sighted. I don\u2019t know any serious analyst who\u2019s looked at Iran for a while who didn\u2019t expect any kind of retaliation. Unfortunately, I\u2019m not sure if this round (of retaliation) will be the last round.\u201d<\/p>\n
Jeffrey Halley, Senior Market Analyst, Asia Pacific, Oanda<\/strong><\/p>\n\u201cExpect equities to take a hit, especially in imported energy-dependent Asia. Airline stocks will be out of favour today because of oil, but that won\u2019t be the whole story. \u201cThe potential closure of the Straits of Hormuz \u2013 Iran has plenty of land-based anti-ship missiles \u2013 will severely disrupt oil supplies from the Middle East. We may also see next week\u2019s signing of the interim U.S.-China trade agreement in Washington DC delayed.\u201d<\/p>\n
Kay Van-Petersen, Global Macro Strategist, Saxo Capital Markets, Singapore<\/strong><\/p>\n\u201cThat\u2019s the key risk, that they maybe kill Americans, and the U.S. strikes Iran and then they do something else that again is kind of direct. But I don\u2019t think it takes us to a market rout. It makes it a little bit tougher to play the bounce, but it\u2019s still going to be the same old move at the end of the day. \u201cI guess the biggest risk is actually just something else entering\u2026I just think for proper risk-off, you\u2019re going to need a lot more at the end of the day.\u201d<\/p>\n
Michael Purves, CEO, Tallbacken Capital, New York<\/strong><\/p>\n\u201cIf it stays more controlled (confined to the Middle East), the market will motor through this. \u201cIf it escalates, it is a different game. What is really haunting me is \u2013 will investors who are pushing the FANG stocks use this as an excuse to sell and then equities fall into a 3-5 percent pullback?\u201d<\/p>\n
Christopher Stanton, Chief Investment Officer, Sunrise Capital, San Diego<\/strong><\/p>\n\u201cThings have become increasingly overbought. If you\u2019re an investor, don\u2019t you want to take it easy here and back off a bit? (Further escalation could) give you a big, double-digit drop that just scares the living daylights out of folks\u201d.<\/p>\n
Anthony Chan, Chief Asia Investment Strategist, Union Bancaire Privee, Hong Kong<\/strong><\/p>\n\u201cThe market is basically waiting to see if this is it, or if there will be more retaliation from Iran. \u201cInvestors hate uncertainty. If there really is a war the outlook would actually be clearer. At the moment, the uncertainty is overshadowing performance.\u201d<\/p>\n
Masayuki Kichikawa, Chief Macro Strategist, Sumitomo Mitsui Asset Management Co, Tokyo<\/strong><\/p>\n\u201cTrump is doing this for the U.S. presidential election but seems to have made some miscalculations. Iran also miscalculated its response when paramilitary forces linked to Iran surrounded the U.S. embassy. Iran is already in bad shape because of U.S. economic sanctions and does not have the military capability to defeat the United States in a direct war.<\/p>\n
\u201cBoth sides have incentives to control this situation after a few rounds of retaliation, but this depends on how much damage there is to Iraqi oil production capacity, what happens between Iran and Israel and the scale of human casualties. Hopefully in two to three weeks there could be some efforts from both sides to at least contain the situation.\u201d<\/p>\n
George Kanaan, Head of Australian Sales, UBS, Sydney<\/strong><\/p>\n\u201cIn the short term, the market will shrug it off. However it will be closely monitoring any further developments. Any future actions by either side will be taken much more seriously.\u201d<\/p>\n
Ashley Glover, Head of Sales Trading for APAC and Canada, CMC Markets, Sydney<\/strong><\/p>\n\u201cWhat we are seeing at the moment is a big risk off move. \u201cWe are looking out for whether the U.S. is going to retaliate so it\u2019s going to be a big wait-and-see mode until we hear from Trump. And as a result, U.S. futures are off the lows now. We are seeing that \u2018buy the dip\u2019 mentality creeping in as big long-term investors like to buy into these weaknesses.\u201d<\/p>\n
Hideshi Matsunaga, Analyst, Sunward Trading, Tokyo<\/strong><\/p>\n\u201cIt\u2019s getting really serious\u2026but there is a feeling of achievement in terms of technical charts as Brent has surged to above $70\/barrel and near a high in September, 2019 after attacks on Saudi Arabian oil sites. \u201cWe have to see how much and what damage the latest attacks have caused, but oil markets may come down, just like last September, if we can confirm that oil facilities have not been affected and as both U.S. and Iran don\u2019t want a war.\u201d<\/p>\n
Rob Carnell, Asia-Pacific Chief Economist, ING, Singapore<\/strong><\/p>\n\u201cIt\u2019s a very classic risk off, and I guess the question is how far do you push it, and I\u2019d say keep going. \u201cThis is the Iranian response to the killing of Soleimani. We now have to see what the U.S. response to the Iranian response is. This looks as if it could escalate. From a market perspective I think this one could run and run.\u201d<\/p>\n
Ray Attrill, Head of FX Strategy, National Australia Bank, Sydney<\/strong><\/p>\n\u201cThe threat of retaliation the market was worried about last week looks to have become real so there is no other way for markets to go really other than to go to safe havens. \u201cThe presumption was that U.S. President Donald Trump wouldn\u2019t want to start a war this side of election but that presumption would potentially be tested.\u201d<\/p>\n
James Rosenberg, Financial Adviser, Baillieu Holst<\/strong><\/p>\n\u201cThe bigger picture will be how the U.S. responds and whether it all escalates. It\u2019s too early to tell so some smallish early selling to reduce risk would be my assessment.\u201d<\/p>\n
Mike O\u2019Rourke, Chief Market Strategist, Jones Trading<\/strong><\/p>\n\u201cIt is important to note that President Trump was very clear that the U.S. would deliver a heavy handed response to any Iranian retaliation. Thus, futures should not only be reacting to the Iranian attack, but also to the clear escalation that will be the impending U.S. escalation.\u201d<\/p>\n
Matt Simpson, Market Analyst, Gain Capital, Singapore<\/strong><\/p>\n\u201cYou can pretty much get the sentiment from gold. It is holding above $1,600. If there is confirmation that there are U.S. casualties, it could go higher. \u201cIf it does look like we\u2019ve got U.S. casualties, then I don\u2019t think Trump is going to just stand back and take that\u2026World War III has been thrown around. I don\u2019t think we\u2019re there yet. But it does look like Iraq II.\u201d<\/p>\n
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