LONDON — Oil prices jumped nearly US$3 a barrel and gold, the yen and safe-haven bonds all rallied on Friday, after the U.S. killing of Iran’s top military commander in an air strike in Iraq ratcheted up tensions between the two powers.
“Geopolitics has come back to the table, and this is something that could have major cross-asset implications,” said Lombard Odier’s chief investment strategist, Salman Ahmed. In September, U.S. officials blamed Iran for a missile and drone attack on oil installations of Saudi Aramco, the Saudi state energy giant and world’s largest oil exporter.
“He was actively plotting in the region to take actions – a big action as he described it – that would have put dozens if not hundreds of American lives at risk. We know it was imminent,” Pompeo told CNN. U.S. 10-year yields, which move inversely to prices, fell 5 basis points to a three-week low and Bund yields dropped away from seven-month highs they had touched at the start of the week.
“Markets still remain quite thin after the holidays, but even in a regular session we would have seen a similar reaction,” said Christian Lenk, a rates strategist at DZ Bank in Frankfurt, referring to the Middle East-sparked drop in yields.
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