Jacob Mitchell from Antipodes Investment Management,Nikki Thomas from Magellan Financial Group,and Mark Holowesko from Holowesko Partners,appearing remotely on the screen.Credit:Jane Dempster
“The issue then becomes can Israel fight a war on two fronts,and if they can’t,and they don’t feel comfortable... they will reach to the US and say,we need your troops to help us. And the US will,in our view,do what we would expect them to do and say,yes,we’ve got your back,” Thomas said.
“So you suddenly get the US entering a war,which means you then have Iran entering the war,and this escalates to something really nasty.”
Thomas said the humanitarian situation was “horrific,” but the main financial impact of a wider conflict would be on the oil price,which she believed would rise “dramatically,” feeding into higher inflation and raising the risk of recession.
“I don’t want to scare people,and we shouldn’t panic,but risk is elevated in markets at the moment and I think we’ve got to be really cautious about how this plays,” Thomas said on a panel session moderated by this masthead.
The conflict in the Middle East is adding to demand for haven assets including Treasuries,and pushing up crude oil prices.Credit:AP
Global oil prices have risen since Hamas attacked Israel earlier this month,with Brent Crude fetching $US87.93 on Friday. Treasurer Jim Chalmers has also warned the conflict could drive up oil prices and result in more expensive petrol.