Risk assets have sold off overnight following US airstrikes on a Baghdad airport. The strike killed a top Iranian general as well as other senior officials. Iran’s supreme leader has vowed to seek ‘severe retaliation’. This escalation now raises the real prospects of a potential war between the 2 countries.
Oil was a beneficiary of the conflict, spiking almost 5%. The greenback finds itself firmer heading into the European session as participants seek safety across currency markets. Stock markets around the globe are trading 1%+ down overnight. The situation is very fluid so be prepared for volatility today as more details are revealed.
Today’s economic calendar sees UK construction PMI released at 0930. This follows on from a very soft manufacturing print yesterday, seeing the sector contract the most in over 7.5-years. Elsewhere, various eurozone numbers are due for release this morning. In the afternoon US manufacturing numbers are scheduled.
Have a good weekend.
Written by Viv Savani. 8:35am, January 3rd 2020
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