Investors anticipate the end of US involvement in the Middle East war | The Business | ABC NEWS
Commonwealth bank’s head of FX, international and geo-economics Joe Capurso joined The Business to provide analysis on share market movements and why investors are hopeful the US President is about to announce an end to US involvement in the Middle East war, and why they’re likely to be disappointed.
The ASX 200 and All Ordinaries jumped more than 2% on growing expectations of a scheduled national address by Donald Trump on Thursday (Australian time).
But Mr Capurso say investors are likely to be disappointed once again because even if the President announces a withdrawal from the war, the conflict is likely to continue.
“I think the bottom line is that so long as the Strait of Hormuz is closed or largely closed, those markets are going to re-weaken again,” he said.
If Iran continues to keep the Strait of Hormuz closed, CBA’s worst case scenario sees the oil price hitting more than $US150 a barrel.
And he has warned the economic consequences for the US could see a hike to the Federal Funds rate by the end of 2026.
CBA is forecasting a 25-basis point hike in December and another 50 basis points of tightening in the first half of 2027.
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