- Iran warned Israel and the United States on Sunday of a"much larger response" if there is any retaliation for its mass drone and missile attack on Israeli territory on Saturday, as Israel said"the campaign is not over yet".
“The newsflow is about Iran and Israel, so that is going to be most of , but we are still in an environment where we haven’t yet digested the U.S. inflation news and what that means for the Fed, and will they be able to cut rates. "Over the next few days, we are waiting for Israel's response -- this is the biggest attack on Israel in decades. The risk of a regional war has increased meaningfully. The question becomes does Israel seek to broaden the conflict? That is the wild card.
"Moreover, disappointment in the detail of the results from JPM and Wells on Friday. In that context, as we have noted for some time, risk compensation in equities is poor in outright terms and relative to Treasuries. We had already reduced our net long equity exposure ahead of this over the past two weeks.”"The key is whether Iran will consider this retaliation a measured and final response, unless Israel decides to escalate. In 2020, Iran considered its response to the U.S.