Global markets brace for more volatility amid Israel-Hamas war – business live

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Concerns over further escalation in the Middle East are keeping investors cautious, more than a week after Hamas’s devastating attack on Israel.

Global markets are bracing for more volatility, as Israel prepares for a likely ground offensive into Gaza, and hundreds of thousands of Gazans move to the southern part of the Gaza strip.

Fears that the Israel-Hamas war will develop into a regional conflict have pushed up energy prices over the last week.

Brent crude oil is trading over $90 per barrel this morning, up from $85 per barrel on 6th October, the day before Hamas’s attack.

Oil has climbed on concerns of supply disruptions, with Israel having temporarily closed its Tamar gas field last week.

Chris Weston, head of research at Pepperstone, explains:

The focus has been rerouting that gas from the Leviathan gas fields in the North of Israel – if the market feels this gas field could be impacted then could see a spike in EU natural gas.

Many energy experts see the risk of a supply event here as fairly low, but should developments escalate on various fronts, then the market will increase the possibility of a disruption.

Most Asia-Pacific stock markets have fallen today, as risk sentiment is hit by concerns over the Israel-Hamas war.

Japan’s Nikkei has lost over 2%, while China’s CSI 300 index is down 1.1%, and South Korea’s Kospi 200 is 0.7% lower.

Reports that the US is planning to tighten sweeping measures to restrict China’s access to advanced semiconductors and chipmaking gear are also hitting shares in Asia.

Traders are edgy, rather than panicking, about the situation in the Middle East, noting that US Secretary of State Antony Blinken said yesterday that Arab states have a “determination” that the conflict doe not spread.

There are also reports that US and Israelis officials are discussing the possibility of a visit to Israel soon by U.S. President Joe Biden.

Jim Reid, strategist at Deutsche Bank, says:

In the overnight session there has been some relief that a ground offensive hasn’t begun yet in Gaza and that diplomatic channels seems to be open for now.

President Biden is considering a trip to Israel in the next week which will be an important event.

John Velis, foreign exchange and macro strategist at investment bank BNY Mellon, predicts geopolitical tensions will push up the US dollar, telling clients:

Given rising geopolitical risk in the Middle East, we see the dollar’s safe-haven bid returning and so sideline our more fundamental-based reservations about limited dollar upside.

Also coming up today

European finance minister will discuss the economic outlook when they meet for a Eurogroup meeting today. US Treasury secretary Janet Yellen is expected to attend too.

Sam Woods, deputy governor of Prudential Regulation at the Bank of England, will speak at the City Banquet, at Mansion House.

The agenda

• 9am BST: Italian inflation report for September

• 9.30am BST: Bank of England chief economist Huw Pill speaks about the ‘the current economic outlook.

• Today: Eurozone finance ministers hold a Eurogroup meeting

• 9.10pm BST: Sam Woods, CEO of the Prudential Regulation Authority, gives speech at the City Banquet, Mansion House