Israeli Minister Sa'ar stated that Israel has not engaged in direct diplomatic contacts with Iran for nearly twenty years, attributing this to Iran's persistent goal of eliminating Israel. This lack of diplomatic engagement underscores heightened geopolitical tensions, which can affect regional stability and investor sentiment. The primary transmission mechanism is risk appetite, as escalating tensions may lead to increased volatility in Middle Eastern markets and impact energy prices. Assets most exposed include Israeli equities and bonds, which may react negatively to perceived threats, while Iranian assets could face further isolation. Traders will be particularly attentive to any developments in international negotiations or potential military escalations that could arise from this ongoing conflict.
Sa'ar: Israel has not held any direct diplomatic contacts with Iran for nearly two decades due to Iran's ongoing commitment to "eliminate Israel"
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