Shock to Global Markets Following Escalating Tensions in ME

Investors rushed to safe assets during Friday's trading on the back of a shock to global markets in the wake of escalating political tensions in the Middle East.

Safe haven assets such as gold and government bonds made strong gains today as investors moved away from risky markets such as stocks.

Safe-haven currencies such as the Japanese yen and the Swiss franc were another destination for investors, with the fact that the Japanese currency rose to a 9-week high against the greenback.

At the same time, the US currency saw noticeable gains today with the weakening of the euro and sterling, and with anticipation of tensions in the Middle East.

The political situation worsened sharply early in the day after the announcement of the killing of the commander of the Revolutionary Guards Corps in Iran "Qasem Soleimani" by a US air strike over Baghdad's airport.

According to an official statement posted on the Pentagon website, the strike was carried out by the army, aiming to deter future Iranian attacks in the future.

The Pentagon accused Soleimani of developing plans to attack American diplomats and service members in Iraq and throughout the region, while assuring that the United States will continue to take all necessary measures to protect its citizens and interests.

On her part, Amélie de Montchalin, French Secretary of State for European Affairs said today that the priority of Paris is to achieve stability in the Middle East after the American raid.

By the end of today's trading, the price of gold futures for February delivery jumped by 1.6 percent to $1552.70 an ounce.

The spot price of the yellow metal increased by more than 1.3 %, recording $1549.55 an ounce.

As for the oil market, the price of Brent crude for March delivery increased by 4.2 % to reach $69.03 per barrel.

The price of futures contracts for US NYMEX crude for February delivery increased by 4.1 % to $63.68 a barrel.

Also, the returns of government bonds declined with the increase in their prices as a safe haven asset. The yield on 10 years US Treasury bills (T-bills) fell to 1.811%, and the yield on German government debt for the same period fell to -0.294 %.

Meanwhile, the yield on British government 10 years bonds fell to 0.723 %, and the yield on Italian government bonds also fell to 1.341%.

On the other hand, the Japanese yen rose against the US dollar by about 0.5% at 108.02 yen, the highest level of the Japanese currency since last October.

Also, the main dollar index, which follows the performance of the US currency against 6 major currencies, increased by more than 0.2 percent to 97.060.

In the same time, Europe's "Stoxx 600" index fell by 0.8 % to 416 points, as the British "FTSE" fell 0.5 % to 7,569.4 points.

The German index "DAX" also fell by 1.8 % to 13144.9 points, while the French index "CAC" fell 0.6 % to 6005.3 points.

Meantime, the Dow Jones is expected to drop by 1.2 % to 28,496 points, while the Standard & Poor's 500 (S&P) and NASDAQ indexes are also expected to plunge by 1.3 % and 1.5 %, respectively.

Wall Street, however, has not started trading today, yet, future contracts indicate that will start the session within the red color.