Financial market risks rise amid US-Iran strains

Over the weekend, US airstrikes targeting Iran’s nuclear and missile sites triggered a broad escalation, with Iran retaliating and targeting US assets across the region.

This has led to the closure of the Strait of Hormuz, a crucial route through where about 20% of global oil flows pass, risking further regional instability.

The conflict between the US and Iran could last weeks or even months. Negotiations between the two nations is unlikely to resume in the near term despite breakthroughs in recent talks mediated by Oman.

What is the financial market outlook and strategy?

With risk sentiment deteriorating and energy security concerns rising, a defensive stance remains warranted amid a downward bias in both global and local fixed income and equity markets.

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