Markets Calm Amid Iran Strikes, Trump Steps In

0:00From the streets of Sydney to the world, this is Sydney News Today. Financial markets have shown a surprisingly calm response to the U.S. and Israeli strikes on Iran. Oil prices jump from around $70 a barrel to more than $81, but that's similar to last year's reaction to a tax on Iranian nuclear sites. Stock markets dipped just 0.9 percent. Gold prices actually pulled back from highs and the U.S. dollar gained ground against other currencies. One yields climb, too, with the two-year treasury up 13 basis points in the 10-year of nine as investors' eye-higher energy costs and inflation. The state of Hormuz remains effectively closed to oil tankers due to high insurance costs, even though Iran hasn't attacked any ships yet. Investors seem convinced the conflict won't last long, despite President Trump's estimate of four or five weeks. They're betting on a quick resolution, especially with U.S. midterm elections looming where high gas prices could hurt.

1:00Trump stepped in Tuesday with a social media post, ordering cheap government insurance for ships in the Persian Gulf and promising navy escorts through the straight if needed. This could restart oil flows from Saudi Arabia, the UAE, Kuwait, Iraq, and Iran, before storage runs out. Meanwhile, America's Shale Boom has made it the top energy exporter, filling gaps left by OPEC and even Russia in Europe. That buffers global markets for now, but if fighting drags on or infrastructure gets hit, expect sharper reactions on prices, inflation, and growth. This episode is supported by our sponsor. Some people meditate. I just lay down and press play, S-O-L-I-S-O-L-Pillow.com.