Rising tensions in the Middle East and the return of a higher-for-longer narrative on U.S. rates have sapped risk appetite, sending Asian stocks tumbling, the dollar climbing to five-month highs and leaving the fragile yen stuck at levels last seen in the mid 1990s.The dour mood is set to continue in Europe as bourses there are due to open sharply lower, futures indicate.
The Federal Reserve on the other hand is likely to be in no rush to start its easing cycle after March retail sales came in higher than expected, the latest evidence of a resilient U.S. economy. Comments from Fed officials have also led traders to dial back their expectations with San Francisco Federal Reserve Bank President Mary Daly the latest to suggest the Fed is in no hurry to cut rates.The safe-haven flight to gold and dollars continued as the world awaits word on how Prime Minister Benjamin Netanyahu would respond to Iran's first-ever direct attack. The yen, often sought as a safe asset, weakened further to 34-year lows as the widening difference between U.S.