The Iranian Wildcard
The Israel attack on Gaza has escalated from aerial bombardment to a ground attack. Oil price has correspondingly increased to US$50 currently, partly due to the Israel attack and also the Opec output cut. The equities market has not been affected by this development. In fact, commodities have moved up in response to the increase in oil price.
Jan 20 is the day of Obama’s inauguration as the 44th President of the United States. Many investors are eagerly awaiting for the ‘Obama Effect’ that the charismatic man might bring to sooth the pain from last year’s pain. North Korea has been quiet since reports of Kim Jong Il’s poor health. Iran has not moved during the Israeli attacks. However, there might be a risk of them supporting Hamas soon. If Iran decides to test the limits of the new US President, this will be the time. Obama has his hands full tackling the financial tsunami. It would be a blow if Iran were to escalate the tensions in the Middle East at this time. Oil price will skyrocket and the stock markets will be affected.
Lets hope Iran maintains the status quo.
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