10 strategists on what U.S.-Iran escalation means for markets
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BentallGreenOak agrees to acquire Metropolitan Real Estate Equity
      watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • A pharmacist administers a dose of the COVID-19 vaccine in Mountain Brook, Ala., on Feb. 21, 2021
      Business optimism grows as vaccinations spread – Fed
      watch video
      0:59
      Coronavirus and the S&P 500: February 2021
      Multiemployer pension measures cleared for relief bill vote
      The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
    • OECD proposes revision of its DC ‘good design' roadmap
      Dominic Scriven, director and portfolio manger of Dragon Capital, speaks during an interview in Ho Chi Minh City, Vietnam in 2006
      Vietnam gets its first private defined contribution plan
      DCALTA releases daily valuation tool for alts in DC plans
      PSCA: Employee participation in non-qualified deferred comp plans rising
    • Michael Herskovich
      BNP Paribas Asset Management names global head of stewardship
      TPT Retirement taps into low-carbon strategies
      Gary Gensler
      Nominee Gensler backs SEC climate risk disclosure
      Emissions from a smokestack in Poland
      Asset managers facing more scrutiny on ESG issues – report
    • Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
      Spirit winners
      Prudential honors young people who are helping out
      2 U.K. pension execs take on ESG investing in new podcast
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • Former regulators ask Congress to address market stability
      SEC launches climate task force
      Los Angeles Fire & Police eyes up to $950 million in private equity commitments
      Bristol, Conn., scouting for investment consultant
    • Railpen hires head trader in preparation for in-house trading
      Andy Moniz
      Acadian picks responsible investing director
      Schroders PLC office building on Gresham Street in London's financial district
      Schroders AUM gains as private assets and alternatives unit grows
      Amanda Agati
      PNC chooses new CIO for asset management group
    • Los Angeles Fire & Police eyes up to $950 million in private equity commitments
      Sempra Energy to infuse pension plans with $246 million
      Illinois pension fund liability jumps 19%
      Xerox to send $130 million to global pension plans
    • Railpen hires head trader in preparation for in-house trading
      Deborah Shufrin
      Colby College chooses new CIO
      Andy Moniz
      Acadian picks responsible investing director
      Amanda Agati
      PNC chooses new CIO for asset management group
    • The Charging Bull statue is covered in snow near the New York Stock Exchange on Feb. 11, 2021
      Bain: Private equity managers finish 2020 strong
      Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
    • AEW chooses head of fund operations and debt finance
      Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
      David Ireland
      Sponsors returning to questions about in-plan annuities
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Fairfax County Educational Employees discloses $61 million in commitments
      Bristol, Conn., scouting for investment consultant
      Chicago Policemen plans search for index fund manager
      North Dakota builds on infrastructure investment with $200 million commitment
    • Fairfax County Educational Employees discloses $61 million in commitments
      Bristol, Conn., scouting for investment consultant
      Chicago Policemen plans search for index fund manager
      North Dakota builds on infrastructure investment with $200 million commitment
    • Independent Investment Consulting Services
      Financial Auditing Services
      Actuarial Services
      Emerging Market Equity Manager Services
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Investment Trends: Looking Ahead Across Equity Sectors
      Rethinking Market and Reference Data Management
      China is embarking on a new stage of growth
      Gold Outlook 2021
    • Sameer Shalaby
      Commentary: Why should investors care about treasury management?
      David Blitzstein
      Commentary: Without a national retirement policy, Americans face a future of pension crises
      Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top performing managers by category: separate accounts, 4th Quarter 2020
      Graphic: Private funds weathered 2020 turmoil
      Top performing managers by category: commingled accounts, 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. MARKETS
January 03, 2020 07:20 AM

10 strategists on what U.S.-Iran escalation means for markets

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg

    News of a U.S. airstrike that killed a top Iranian commander comes after most asset classes, including U.S. equities, had a stellar year.

    The tone in global financial markets has turned cautious after a U.S. airstrike killed a top Iranian commander, fueling concern over an escalation in tensions.

    U.S. stock futures dropped and Asian shares reversed gains, while oil spiked along with the yen and gold. Qassem Soleimani, a feared Iranian general who through proxy militias extended his country's power across the Middle East, was killed at the direction of U.S. President Donald Trump. The risk-off move deepened after Iran's supreme leader, Ayatollah Ali Khamenei, said "severe retaliation" awaited Mr. Soleimani's killers.

    The shock news comes after most asset classes had a stellar 2019, with U.S. equities capping one of the best years of the past decade.

    Here are 10 analysts and money managers on what it means for the market outlook:

    Kit Juckes, Societe Generale, chief FX strategist in London

    "Gold's a winner as tension increases, and oil prices are higher too. Bond yields are lower, the equity rally which was underway in the U.S. has stalled but not gone dramatically in reverse, and in the FX market, safe havens and oil-sensitive currencies benefit but it's the yen which is the clear winner.

    "The key level to watch is probably EUR/JPY 120. That probably holds unless there is further escalation.

    "Given the scope for tension to persist in the Strait of Hormuz, a protracted period of higher oil prices has to be a risk."

    Valentin Marinov, Credit Agricole, head of G-10 currency research in London

    It could "dash market hopes for a rebound of the global economy that is still to emerge from under the cloud of the U.S.-China trade war. Risk sentiment should remain fragile also because central banks may be slow to respond or simply no longer have the arsenal to respond in an adequate way."

    He calls the yen and Swiss franc "attractive," while saying the conflict could weigh on "risk-correlated oil importing currencies like the Korean won."

    Antoine Bouvet, ING Groep, senior rates strategist in London

    "Recent episodes of U.S.-Iran tensions have not resulted in material escalation but even in a fairly benign outcome to this crisis, the bid in U.S. Treasuries and bunds should last at least into next week."

    Alberto Tocchio, CIO, Colombo Wealth in Lugano, Switzerland

    "The ‘severe retaliation’ aspect is possibly what is scaring the markets as it could mean that there will be a counter-attack vs. American diplomats. Markets could use this excuse to take some profits as sentiment and positioning are possibly too high.

    "We would then use the possible weakness to increase our equity exposure."

    Kay Van-Petersen, Saxo Capital Markets, global macro strategist in Singapore

    "We are moving potentially from proxy (Iran) vs. proxy (Saudis and U.S.) to potentially direct Iran-backed forces vs.U.S. forces." However, "net-net, I struggle to see what Iran can really do.

    "People are still not back at their desks fully until next week to mid-January, so illiquidity could give us some overreaction to the downside. Still, let's see how the next 24 to 48 hours play out. Remember, it's the weekend already in the Middle East."

    The gain in oil "honestly feels a touch overdone." But this is positive for U.S. defense spending and even French defense stocks could get a boost later, he noted.

    "So much for Trump calling troops home."

    Edward Lim, Covenant Capital, money manager in Singapore

    "This attack merely highlights the geopolitical risk of the oil markets, and the market undergoing a possible oil shortage in the first one to two quarters of 2020.

    "We didn't do anything on the news as we have already bought some oil stocks such as CNOOC and Total when oil was trading close to $60s at the end of 2019."

    Steven Leung, UOB Kay Hian (Hong Kong) Ltd., executive director in Hong Kong

    "Investors are worried that the situation in Iran will worsen, since there could be some retaliation after the U.S. attack. People will want to cut risk ahead of the weekend. Stocks have rallied a lot in the past month or so, so any bad news flow is a reason to take profit."

    Ken Cheung, Mizuho Bank, chief Asian FX strategist in Hong Kong

    "The reversal of risk-on sentiment will keep Asian FX under pressure. The USD index also appeared to find a footing. These factors will probably prompt profit-taking flow on EM Asian FX. The magnitude could be amplified by thin liquidity during the New Year holiday."

    Mitul Kotecha, TD Securities, senior emerging market strategist in Singapore

    "Risk appetite has worsened as reflected in the weakness in high-beta currencies in the region in particular. Much now depends on whether there is any retaliation. In the near term, losses in risk assets are likely to be contained."

    David Forrester, Credit Agricole, foreign-exchange strategist in Hong Kong

    "The market is pricing in risk of a potential Iranian response to the U.S. air strikes, which is pushing up gold and oil prices as well as the yen.

    "There has been a lot of good news priced into the market in terms of the U.S.-China trade deal and U.S. economic growth. U.S. ISM manufacturing data out later today will be critical in determining whether dollar-yen can break below its two-month trading range."

    Related Articles
    Most investors uncertain about market prospects in 2020 – survey
    ‘Safer’ ends of the market look like the bet for 2020
    Private equity begins 2020 with more cash than ever before
    Recommended for You
    Cost of Treasuries-led rout seen in troubled bond sales
    Cost of Treasuries-led rout seen in troubled bond sales
    Treasury yields signal buy opportunity for Japanese investor
    Treasury yields signal buy opportunity for Japanese investor
    Roaring reflation trade rips $640 million from long-bond ETF
    Roaring reflation trade rips $640 million from long-bond ETF
    Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    Sponsored Content: Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Rethinking Market and Reference Data Management
    Investment Trends: Looking Ahead Across Equity Sectors
    China is embarking on a new stage of growth
    Gold Outlook 2021
    Shifting DC Times - Winter 2021
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center