Markets ponder Iran's next move

The Middle East region is on edge this morning as markets ponder Iran’s involvement and military escalation, with Israeli tanks and troops currently sat on Lebanon’s borders.

Hezbollah leader Hassan Nasrallah was killed over the weekend with a retaliation expected from Iran, potentially triggering a direct war between Iran and Israel. Central Beirut has been under attack over the weekend from Israeli air strikes, this morning it’s reported that Hamas leader has also been killed as PM Netanyahu goes on the offensive as he now looks to target Houthi rebels in Yemen ports.

UK GDP figures released early this morning were weaker than expected for both the quarterly and annual basis, as weakness in the production and construction industries holds back growth in the economy. Services output was also reduced lower for Q2, as?bets on a November rate cut from the Bank of England now appear to be weakening.

?However, the housing market again continues to show robustness as House prices defied expectations and rose at the fastest annual pace since 2022, according to Nationwide figures. Prices were up 0.7% for September, beating the 0.2% expectation and matching the fastest pace this year, as annual growth topped 3.2% highest since November 2022.

On the Asian front, Chinese stocks have entered a bull market extending a remarkable turnaround soaring for a 9th straight day after PBOC stimulus measures, as the Chinese stock market performs higher than the US so far this year. The CSI 300 index rallied 8.5% overnight in its biggest gain since 2008, with Chinese property shares soaring as the central bank tells banks to lower mortgage rates. Although some investors see this as a short term rebound, it’s a remarkable recovery for Chinese equities which have been battered earlier this month hitting multi year lows over growth concerns, with the Hang Seng set for its best monthly performance since Nov 2022.

This week kicks off with another speech from Fed Chair Jerome Powell this evening, as we build towards Friday’s all important Non-Farm Payroll figure.

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