Today's Edition
LONDON (Reuters)
World stock markets tumbled on Friday and oil prices surged as Israel launched a military strike on Iran, sparking a rush into safe havens such as gold, dollar and Swiss franc.
An escalation adds uncertainty to financial markets at a time of heightened pressure on the global economy from US President Donald Trump's aggressive and erratic trade policies.
Early on Friday Trump urged Iran to make a deal over its nuclear programme, saying that there was still time for the country to prevent further conflict with Israel.
Market reaction, which had abated in early European trade, gathered a renewed momentum as the session wore on.
Brent crude oil prices were last up almost 9% at $75.54 per barrel, having jumped as much as 14% during Asian hours. They were set for their biggest one-day jump since 2022, when energy costs spiked after Russia's invasion of Ukraine.
US oil futures rose almost $6 to $73.91.
Gold, a classic safe-haven at times of global uncertainty, rose 1% to $3,416 per ounce, bringing it close to the record high of $3,500.05 from April.
Israel launched large-scale strikes against Iran on Friday, saying it had attacked nuclear facilities and missile factories in what could be a prolonged operation to prevent Tehran building an atomic weapon.
Washington said it had no part in the operation.
The developments mean another major geopolitical tail risk has now become a reality at a time when investors are wrestling with major shifts in US economic and trade policies.
TWO-WAY PULL FOR BONDS
US Treasuries initially benefited from the rush for safer assets, but as the day wore on focus turn to the inflationary impact of oil.
US 10-year Treasury yields were last up 2.6 basis points (bps) at 4.38%, having touched a one-month low of 4.31%. Bond yields move inversely to prices.
Germany's 10-year bond yield touched its lowest level since early March at around 2.42%, before also moving higher.
Some traders were attracted to the dollar as a haven, with the dollar index up 0.8% to 98.50, retracing most of Thursday's sizeable decline.
The Swiss franc briefly touched its strongest level against the dollar since April 21, before trading 0.5% lower at around 0.8144 per dollar.
Fellow safe haven the Japanese yen fell 0.6% to 144.33 per dollar, giving up earlier gains of 0.3%.
The euro was down 0.8% at $1.15, after rising on Thursday to the highest since October 2021.
