Geopolitical Tension to the Fore Once Again
by AIB Treasury Economic Research Unit
- This week was very much characterised by “risk-off” sentiment in markets, as rising geopolitical tensions boosted safe haven assets.
- To date, the primary direct impacts of the current tensions in the Middle East are via higher commodity prices and supply chain disruption, which could quickly feed through to higher producer and consumer prices.
- With this in mind, it is important to note Brent Crude also rose earlier in the week.
- The indirect effects on economies of a major escalation in conflict in the Middle East are much harder to gauge.
- Turning to the week ahead, a busy US data schedule will include important updates on inflation and growth.
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