Tensions rise in the Middle East as US officials have confirmed that Israel carried out a military operation against Iran, while state media reports air defences are active near the city of Isfahan. Oil and LNG markets are the ones immediately affected, rising 4% with Brent crude rallying above $90 per barrel. Equity markets are a 'sea of red' and the $ is the Safe Haven currency of choice - Cable opens at 1.2405, EURUSD 1.0635 and Bitcoin falls 2.3% to $62,055.51, Ether fell back below $3000 at $2,997.85.
Data wise Japanese inflation data released came in below economists’ estimates at 2.7% yoy, 2.8% was expected and in the UK - Retail Sales are lower both on a month-on-month basis and year-on-year, and I am sure the weather is to blame here, but the media are suggesting shoppers are cutting back on groceries. As for the rest of the day, we are data light and speeches will dominate. We hear from the BOE’s Ramsden and Mann, the Fed’s Goolsbee, and the ECB’s Nagel.
Domestically, Rishi Sunak will deliver a speech claiming Britain is suffering from a “sicknote culture”, as he warns there is a risk of “over-medicalising” normal worries by diagnosing them as mental health conditions. In a speech on how to reduce people being signed off sick from work, the prime minister will say the government is planning to trial getting “work and health professionals” to issue fit notes, shifting away from GPs carrying out this role.
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