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By Greg HIRT, Global CIO Multi Asset, Allianz Global Investors
Iran's direct action on Israel over the weekend has led to fears of further escalation. But in the absence of a full-blown crisis in the region – which is not our base case – we think the impact on financial markets will be contained.
- Iran's attack on Israel has raised fears of a wider conflict but a broader war in the region is not our base case scenario.
- We see "reassuring" indications that any response from Israel could at least be measured and the US, Israel's most important ally, has said it won't participate in any retaliation.
- Commodity markets may see the most direct transmission of the tensions, and we expect prices for oil and its derivatives to...
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