The analysts of Deutsche Bank They point out that events in the Middle East will be the main focus of markets this week and add that geopolitical tensions could affect the global economy through several channels.
There is a risk that the geopolitical shock will harm growth
“More directly, the effects of rising oil prices will be felt around the world, and this comes at a time when persistent inflation in several countries is already worrying.. That is something that could create a dilemma for central banks, as we also discovered after the Russian invasion of Ukraine in 2022.”
“On the one hand, there is a risk that a geopolitical shock could hurt growth, bringing forward the timing of rate cuts.. In fact, markets were clearly pricing in that risk on Friday, with the possibility of a Fed rate cut by June rising from 24% to 30%, although it has since fallen back to 24% this morning. On the other hand, if higher oil prices generate more inflation and have secondary effects on other prices, monetary policy could remain restrictive for longer.. So the potential effects can go both ways.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
