Israeli Prime Minister Netanyahu confirmed military strikes against Hezbollah yesterday and reiterated intent for further attacks today, escalating regional tensions in the Eastern Mediterranean. The heightened conflict risks broadening into a wider regional confrontation, which could disrupt energy infrastructure and shipping lanes, thereby affecting risk appetite for emerging market and Middle East-exposed assets. Investors are repricing geopolitical risk premiums, with immediate spillover effects on Israeli sovereign bonds, regional equities, and global oil prices due to supply disruption concerns. Safe-haven demand has risen, supporting the U.S. dollar and gold, while Middle Eastern stock indices, particularly in Israel and Lebanon, face selling pressure. Traders will watch for any official response from Iran or Hezbollah, as well as U.S. State Department commentary, for signals on escalation risks.
NETANYAHU: WE ATTACKED HEZBOLLAH YESTERDAY AND WE WILL ATTACK THEM TODAY
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