Andrew Curtayne: Milford Asset Management expert on the market reactions to the Israel-Iran conflict

The conflict between Israel and Iran is continuing on - and it's sparked concerns among investors.

US President Donald Trump has demanded Iran's unconditional surrender, as he weighs up whether to join Israel's targeting of nuclear sites.

Milford Asset Management expert Andrew Curtayne explains the impact of the conflict.

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Episode Transcript

Speaker 1 (00:00):
Time for Milford Asset Management. Andrew Kurtain, Hello, Andrew, I
love it well, thank you. So how the global markets
reacting to this conflict between Israel and Iran.

Speaker 2 (00:09):
The markets have really shrugged it off of only seeing
equity markets come off very marginally. The US DOOT markets
down around about one percent since the conflict began last Friday.
So Marc's really telling you that I think this conflict
at the moment's pretty contained to Israel in Iran and
they're not getting too spooked about it. We have seen
a little bit of movement to safety. Some investors have

(00:30):
been buying gold golds up to a three percent since
the conflict started, But really where the most action has
been is in oil. Price is up about sixteen percent
since the conflict started, and go back and started June
it's up about twenty three percent. Now, this sort of
makes sense because Iran produces around about three percent of
the world's oil uptop, which doesn't sound like a lot,

(00:52):
but in a commodity like oil, we even sort of
a one percent destruction to oil production can have quite
a significant impact on price.

Speaker 1 (01:00):
Do you think it'll go higher yet?

Speaker 2 (01:04):
It's hard to tell what would send the price higher
would be direct attacks into major oil infrastructure. We haven't
seen that. There's been a few a few sort of
missiles that have hit some smaller pieces of infrastructure, but
we haven't seen anything that is really going to disrupt
kind of million barrel type levels of production. What could
happen if things escalators Iran deicide to say, attack some

(01:27):
oil assets in Saudi Arabia, which produces round about nine
attem percent of the world's oil, or in a major escalation,
they can they can shut up or start attacking cruise
ships in austraightup for most which is to the south
side of Iran, which a round about twenty percent of
the world's oil passes through this. But I sort of
put that as an unlikely scenario. I think if I

(01:49):
run to this would really attagonize the US. You need
to remember that Trump wants lower oil prices, not higher,
So if you want a certain way to bring us
into the war, then you could go first to other
technique Arabian oil accent.

Speaker 1 (02:01):
Very good point. Now, given everything that's going on, why
do you think it is that most global stock markets
have recovered from the low that we saw in.

Speaker 2 (02:07):
April well with a conflict in Middle East. It's really
only impacting right now the countries that are involved. It's
not really having an impact on the economic outlook for
the US, for Europe. When New Zealand, Australia and so
sheer markets really care about what happened in economies where
their companies primarily operate, and it's the economic growth in

(02:28):
these companies and these economies as fine, and the profit
growth in the companies in these countries will also be fine.
And so that's what I'm just as a treason. This
is sort of a relatively contained conflict for now, and
a few sort of stepped back a couple of months
since the equity market's bottomed back in April. Since then,
we've had quite positive new bond tariffs with the delays

(02:49):
on all the pause to negotiate deals around the world
between Trump and the major nations, also have a slightly
more optimistic look around the global macro well look. And
also the sort of artificial intelligence trade which has been
a key theme over over the last few years, has
really come back with a theory and that is sending
a lot of stock slider, Microsoft, Navidier, Oracle back to

(03:12):
all time highs.

Speaker 1 (03:13):
Yeah, Andrew, Thanks very much. Andrew Coutaine Milford ask management.

Speaker 2 (03:16):
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