Markets live updates: Oil and gold prices jump, while shares slip after Israel strikes Iran

Great question Michelle.

War often brings about greater uncertainty and instability which markets typically dislike.

It can lead to a big sell-off in stocks and it can cause investors to move towards what’s viewed as safer assets like gold, bonds, or currencies.

The latest update on Brent crude oil prices — a key global benchmark.

Brent futures are up 7.6% to $US74.64 a barrel so far today, having followed up a roughly 5% jump yesterday.

As my colleague Nassim Khadem explains further down in today’s blog, traders are concerned that an escalating conflict in the region might close the Strait of Hormuz, through which around 30% of seaborne oil is shipped.

JP Morgan thinks a worst-case scenario — such as a closure of the Strait of Hormuz through which global oil flows or major retaliatory attacks from Iran — could disrupt supply and send oil prices dramatically higher.

Iran’s defence minister had warned of attacks on United States bases if nuclear talks collapse, and now Israel has carried out strikes on Iran, according to multiple media reports.

In a note published overnight the investment bank flagged $US120–$US130 per barrel as a potential range for crude oil prices in the event of military conflict and a closure of the Strait of Hormuz.

That would be roughly double the level of oil prices earlier this week, before speculation around potential Israeli strikes ramped up.

About 30 per cent of the world’s seaborne oil trade moves through the Strait.

The International Atomic Energy Agency (IAEA) on Thursday formally declared Iran in breach of nuclear non-proliferation obligations — for the first time in almost 20 years — after uncovering undeclared nuclear activity at multiple sites.

While Iran continues to insist its nuclear program is peaceful, US President Donald Trump said that Iran would not be allowed to obtain a nuclear weapon. The US has relocated personnel due to rising risks in the region.

The price of Brent crude shot up more than 8 per cent to $US75.18 on Friday morning local time, following an increase of around 5% yesterday as speculation around future Israeli strikes on Iran mounted.

Watch more about how important the Strait of Hormuz is to oil supply in this video I did in 2023 when Middle East tensions began rising:

The Australian dollar has taken a hit from Israel’s multiple air strikes on Iran.

Shortly before news of the attacks broke, the local currency was worth 65.27 US cents.

It fell as low as 64.57 once news emerged of the air strikes inside Iran.

That is a fall of about 1% in the space of about an hour.

Sean Callow, a senior analyst at ITC Markets, told Reuters the trend for the Aussie is still up given the pressure on the US dollar from a sluggish US economy and investor unease over the US policy outlook.

“Investors are likely to expect that Israel’s strikes will be contained to a relatively short period, not something that will dictate market direction multi-week,” he said.

A breaking news update from our Middle East correspondent Eric Tlozek:

The Israel Defense Forces (IDF) says it has struck targets in Iran related to the country’s nuclear program.

It says Israeli jets hit dozens of military targets in different areas of Iran.

Israel has issued a home front emergency for its citizens, restricting public gatherings and urging people to remain near shelters and prepare for Iranian retaliation.

Israel’s Prime Minister Benjamin Netanyahu has released a video statement saying his country had launched “Operation Rising Lion” to prevent Iran from developing a nuclear weapon.

He says the operation will continue “for as many days as it takes to remove this threat”.

News reports of Israeli strikes on Iranian targets have had an immediate effect on global markets, even if the negative reaction on the ASX has so far been modest.

“While details are sparse regarding the targets, risk asset markets are not in the mood to wait and find out,” wrote IG’s Tony Sycamore.

“US S&P 500 equity futures have fallen by 1.3% to 5,972, WTI crude oil has surged 5.73% to $US71.89, and gold is trading at $US3,409 (+0.67%) not far from its $US3,500 record high. The USD index the DXY is trading higher at 98.03 (+0.2%) finding some support after hitting a three year low it hit overnight.

“JP Morgan warned in a note to clients overnight that an attack on Iran, presumably at levels beyond those seen in April and October last year, could send the price of crude oil to $US120, driving US CPI to 5%.”

Unfortunately, we’re now about to find out how accurate those forecasts are.

Gold has jumped 1% to $US3,435 an ounce, which is close to recent record highs, while oil prices have jumped 5.5% to a two-month high. Brent crude is above $US73 per barrel.

That’s all as volatility in the Middle East rises, with Israel reportedly launching a strike on Iran.

Read more here:

The resignation of the fertility clinic’s boss was announced yesterday following the reveal of a second embryo bungle to the ASX this week.

In a statement to the ASX, Monash IVF said its board had accepted Michael Knaap’s resignation and “respects his decision”.

Monash IVF revealed on Tuesday that it had incorrectly transferred the wrong embryo to a patient — the second incident the company has apologised for in recent months.

The stock gained about 6% yesterday on the news, while today it is now up another 2.6%. 

More on the background here.

The ASX is now marginally down.

The top stock is Lynas, which is a rare earth miner. The sector is getting a boost right now as China’s stranglehold over rare earth magnets and minerals highlights their value globally in supply chains.

Here’s the top and bottom stocks.

1.Lynas +3.9%2.Bellevue Gold +3.7%3.Evolution Mining +2.4%

Bottom:

1.Cochlear -2.2%2.Light & Wonder -2%3.Carstone Corp -1.6%

We’ll bring you more data soon!

Did you have problems playing music or sending a Snapchat overnight?

This in from Reuters:

Alphabet’s Google said on Thursday it had resolved a brief global service disruption on its platforms that affected multiple services such as music streamer Spotify  and instant messaging provider Discord.

“The issue with Google Chat, Google Meet, Gmail, Google Calendar, Google Drive, Google Cloud Search, Google Tasks, Google Voice has been resolved for all affected users,” the company said.

“We will publish an analysis of this incident once we have completed our internal investigation.”

The outage disrupted services on platforms such as Spotify, Snapchat and Discord that rely on the tech giant’s cloud managed services and infrastructure.

Brent hit a two-month high this week, after reports that US forces were considering withdrawing from Iraq, creating market volatility concerns.

Brent is now steady, while oil overall is rising 0.75%.

Here’s a note from ANZ.

“Brent crude rallied early in the session after various US media outlets reported that Israel is ramping up plans to attack Iran’s nuclear facilities. 

“President Trump flagged the possibility of a massive conflict, although he advised against action while talks continue. This follows threats from Iran that it will target US military bases in Iraq if a conflict breaks out.

“The risk of supply disruptions comes just as OPEC ramps up its production hikes.”

More on the Middle East tensions here.

The future of the AUKUS submarine deal is under question after the Trump administration announced it’s reviewing the agreement.

The head of research at Strategic Analysis Australia, Marcus Hellyer, says the deal may not necessarily be dead but it’s likely it will cost the Australian government more.

He says US Defense Secretary Peter Hegseth has made it clear America’s allies will need to step up their defence spending, raising it to 3.5 per cent of GDP. 

Dr Hellyer says he doesn’t think it’s an unfair request, given the United States would be supplying Australia with submarines that it would like to have in its own fleet.

This interview with Alicia Barry on ABC’s The Business.

This reporting from Reuters.

US President Donald Trump on Thursday said he would not fire Federal Reserve chair Jerome Powell, adding that he “may have to force something” as part of his ongoing push for the central bank to lower rates.

“Raise your rates. You don’t have to keep them up here. If it’s going to go up, I’m OK with you raising — but it’s down, and we’re going out to financing, and I may have to force something,” he said at the White House.

Trump last week had said that a decision on the next Fed chair would come very soon.

Speaking at the White House on Thursday, Trump slammed the Fed chair over the lack of rate cuts, calling him a numbskull but adding: “I’m not going to fire him.”

The FOMC meets to discuss rates next week!

Check out this piece by our reporter Rhiana Whitson, where the solar industry is calling for more cohesive management of the looming waste stream of solar panels.

After that cooler-than-anticipated inflation and business cost data in the US, the market is now fully pricing in a rate cut by the US Federal Reserve in September, ANZ notes.

“And another 25bp cut in December,” they add.

“That pricing implies the impact of higher tariffs on inflation will be transitory. That has been our expectation for some time. As service price inflation moderates, that too will help to contain the inflationary impact of tariffs.

“We acknowledge it is still early in the tariff-to-inflation cycle, but the signs are encouraging.”

While the latest inflation data out in the US didn’t show a price spike for shoppers from boosted tariffs, new figures for businesses are showing glimmers of this issue.

Here’s a note from CBA’s analysts.

“US producer prices increased less than US economist expected in May and in‑line with consumer prices earlier in the week.  However, tariffs are starting to increase US businesses’ costs that will over time be passed on to consumers.

“We consider there is much more tariff‑induced price increases in the pipeline.  The official Producer Price Index explicitly excludes taxes such as tariffs. 

“Our adjustment shows tariffs have started to increase businesses costs. 

“We consider it is a matter of time before businesses pass on more of their tariff costs to consumers.  The longer time for the tariff costs to be passed on to consumers has encouraged us to expect the next interest rate cut by the FOMC in October.”

The worst aviation disaster in more than a decade has shocked the world. Air India officials have confirmed the crash killed at least 241 people and left scores more injured.

Significant questions remain about how a Boeing aircraft with an excellent safety record could crash so soon after take-off.

According to Reuters, US officials say they have not seen any immediate safety data that would require halting Boeing BA.N787 flights.

However, they emphasised they “will not hesitate to implement any safety recommendations that may arise. We will follow the facts and put safety first”.

Boeing’s shares have slumped as financial markets digest the news too. The plane makers shares, which are listed on the NYSE, are currently down about 4.7%.  

For more on this developing story, here’s an explainer on what we know so far from ABC News.

Our currency has been hovering around 64 to 65 US cents the last few days, with it momentarily pushing ever so slightly closer to 66 US cents early yesterday.

Right now, it’s ever so slightly up to 65.32 US cents. CBA’s currency analysts note this is simply because the US currency is weaker, possibly as markets price in rate cuts.

“There is no important data released in Australia or China that might move AUD/USD today,” they add.

“We expect AUD/USD to remain a function of the USD trend today and to end the week not too far from current levels.”