IRANIAN DELEGATION FLOWN OUT OF PAKISTAN - TWO PAKISTANI GOVT SOURCES

Iranian officials were expelled from Pakistan, according to two government sources, escalating diplomatic tensions between the two countries. The incident is likely to weigh on regional risk sentiment, particularly affecting frontier market assets and sovereign debt linked to both nations due to heightened geopolitical uncertainty. Pakistani rupee and local bonds may face downward pressure from capital flight, while Iranian assets could see renewed risk repricing amid concerns over external relations and potential retaliatory measures. The movement underscores fragility in bilateral ties, which have previously influenced energy trade and corridor development projects. Traders will watch for official statements from Tehran or Islamabad, as well as any disruptions to the Iran-Pakistan gas pipeline plans or border trade flows.

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