Hot start of the week

At dawn today, Israel decided to launch an air strike on Iran infrastructure, in response to ballistic missiles sent by Iran to Israel (reportedly intercepted), which came in response to Israeli attacks to Hezbollah in Lebanon. This occurred despite the fact that Trump asked Netanyahu not to proceed with any attack and accept the (supposedly) deal with Iran. Perhaps it’s just a trick by the americans to allow Israel to attack Iran and blame them for blowing up a deal that didn’t exist in the first place. At least not one that can be sold as a victory to the american people. In response, crude oil is up 4%+ today. Hormuz continues to be closed and now Iran, through the Houthis has threatened to close Bab el-Mandeb Strait, initially only to Israel, but it can evolve into a full closure. If that’s not enough, the Korean Kospi index woke up this morning with an 8%+ drop that prompt the market authorities to halt it. At the moment it appears to be contained, but leverage and concentration can spark further panic selling. In the U.S., equity index futures point to a flat open and bond yields are up mildly. On a positive note, on Thursday the World cup will kick off (literally), where Iran will have a representation. It may help cooling the air.

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