Markets saw limited movement Monday, but all eyes are on Israel's next steps after an Iranian drone and missile strike on Saturday.
Foreign exchange markets are pricing in"near term de-escalation" in the wake of the weekend events, Adarsh Sinha, co-head of Asia FX and rates strategy at Bank of America, told CNBC's"Squawk Box Europe" on Monday. The 'safe haven'was 0.15% lower against a basket of major currencies early Monday, also weakening against the Iranian rial and the Israeli shekel.
That doesn't mean prices will continue to go down, she added — although their course will hinge on Israel's reaction and next steps.Economists and analysts agreed that overall long-term risks and uncertainty are now heightened. A possible Iranian blockade of the Strait of Hormuz will hold Brent prices above $84 dollars per barrel for the remainder of the year and cause aIran's assault has already threatened regional oil supply in a market that has been"broadly balanced" in the first part of the year, and increased the risk of flipping to undersupply, Sawicki said. Iran's crude production totals nearly 3.5 million barrels per day, accounting for around 3.3% of global production, he noted.