INSTANT VIEW-Iran missile attack roils financial markets

An Iranian rocket attack on U.S. forces based in Iraq has sent markets into turmoil and investors racing for safety. Here are analyst views on the market moves:

ROB CARNELL, ASIA-PACIFIC CHIEF ECONOMIST, ING, SINGAPORE

"It's a very classic risk off, and I guess the question is how far do you push it, and I'd say keep going.

"This is the Iranian response to the killing of Soleimani. We now have to see what the U.S. response to the Iranian response is. This looks as if it could escalate. "If you see U.S. Treasuries rallying a bit this morning, expect them to rally quite a bit further should there be a forceful response from the United States, which I'd imagine there would be...from a market perspective I think this one could run and run."

RAY ATTRILL, HEAD OF FX STRATEGY, NATIONAL AUSTRALIA BANK, SYDNEY

"The threat of retaliation the market was worried about last week looks to have become real so there is no other way for markets to go really other than to go to safe havens.

"The presumption was that U.S. President Donald Trump wouldn't want to start a war this side of election but that presumption would potentially be tested."

JAMES ROSENBERG, FINANCIAL ADVISER, BAILLIEU HOLST

"I think it'll have a small negative reaction initially - mainly due to stretched price-to-earnings ratios which exist right now, markets have been very much risk off. The bigger picture will be how the U.S. responds and whether it all escalates. It's too early to tell so some smallish early selling to reduce risk would be my assessment."

MIKE O'ROURKE, CHIEF MARKET STRATEGIST, JONES TRADING

"It is important to note that President Trump was very clear that the U.S. would deliver a heavy handed response to any Iranian retaliation. Thus, futures should not only be reacting to the Iranian attack, but also to the clear escalation that will be the impending U.S. escalation."

MATT SIMPSON, MARKET ANALYST, GAIN CAPITAL, SINGAPORE

"You can pretty much get the sentiment from gold. It is holding above $1,600. If there is confirmation that there are U.S. casualties, it could go higher. "If it does look like we've got U.S. casualties, then I don't think Trump is going to just stand back and take that...World War III has been thrown around. I don't think we're there yet. But it does look like Iraq II."

 

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