Shane Solly: Harbour Asset Management spokesperson on the market response to the US strikes on Iran

Market reactions after the US strikes on Iran have been more 'muted' than expected, especially compared to the response from a week ago.

Reports indicate investors have brushed off this escalation. 

Shane Solly from Harbour Asset Management explains further.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Shane Solly Harbor Asset Managements with I Say Shane, Hello Heather. So,
how have the capital markets reacted to the bombing.

Speaker 3 (00:23):
Well, pretty muted reaction really the to the weekends events.
We've actually seen global shear market index futures. This is
where markets think about what may happen in the future.
When markets opened up in the Northern Hemisphere, actually they
gripped and then their rebounder. So the UIs shear market
market's telling us loaning me down point two percent, so
pretty cautious response. Specially saw a lot of the Middle

(00:43):
Eastern shear markets up over Sunday. US dollars pretty flat,
US bond's pretty flat. Oil spiked up five percent today
and then ended pretty much not up very much at all,
and they're locally. We've seen our dollar down a little
bit against the US sor at fifty nine to twenty
ten year New Zeale gum bond rape steady at four
point six percent, New Zealand share market down just zero

(01:06):
point three percent, and the other OSSI she mark got
down zero point four percent, so pretty resilient.

Speaker 2 (01:10):
Really, what do you think the market's going to do now?

Speaker 3 (01:14):
Yeah, it's a tough one. We need to be pretty
careful about drawing too many conclusions about what happened in
the weekends. We're going to see markets remaining chopping, and
it depends a bit on whether these attacks actually stimulate
a widening war, particularly this disruptive retaliation. So the conflict
is actually quite contained, like Ukraine and to some degree
like we saw in the Iraq War in two thousand

(01:35):
and three. The key thing here here that is the
Straits of all means getting closed by the Iranians. They've
talked about a lot since nineteen seventy nine when the
Islamic Republic came into voice. They've never done it. There's
a bit of speculation out there that if they closed
the straits down or cut even back to fifty percent
capacity for a week or two, we'd see Brent will

(01:57):
potentially spike up about one hundred dollars years a barrel.
That compares with sort of mid seventies at the moment.
And then there's an expectation that OPEC would actually open
up the taps. There's plenty of capacity there. So look,
I think you know, markets do tend to recover from
these events unless there's a clear escalation. We should expect
markets to think this is probably the worst case, and

(02:17):
maybe we have this higher all price, not too much higher,
but a little bit higher and a bit of disruption,
but really the market keeps going through.

Speaker 2 (02:25):
Yeah, Shane, listen, thanks for talking us through it. Appreciate
it as always. Talked to you next week, Shane Soley,
Harbor Asset Management.

Speaker 1 (02:30):
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