- Hamas launched a massive missile strike on Israel on Saturday, with reportedly more than 3,000 missiles fired. Attack was accompanied by ground incursions into Israeli settlements near Israeli-Gaza border, where civilian population was targeted
- Israeli Defense Forces responded by deploying soldiers to regions attacked by Hamas and by conducting extensive air strikes against targets in Gaza Strip
- With hundreds of people killed within a span of a single weekend, this is the most serious and brutal escalation in Palestine-Israel stand-off in decades and threatens to translate into a longer, full-scale war
- Western countries have expressed their support for Israel's right to self-defense while Arab countries condemned hostilities and offered support in finding a diplomatic solution. Iran expressed its support for Hamas cause
- Indices from Asia-Pacific are trading lower at the start of a new week, following massive escalation in the Middle East. Indices from China drop 0.6-1.0%, Nifty 50 trades 0.5% lower and S&P/ASX 200 adds 0.2%
- Traders from Japan, South Korea and Taiwan were off to celebrate holidays. Morning session at Hong Kong Exchange was canceled due to typhoon
- European and US index futures dropped around 0.7% at the opening of overnight trade
- Precious metals trade over 1% higher with gold climbing back above $1,850 per ounce
- Brent and WTI are up around 3.5% each, after rising as much as 5% earlier during the Asian session
- CAD and EUR are the best performing G10 currencies while AUD and CHF lag the most
- Apart from Middle East escalation, newsflow during the weekend was light and no other major market moving news surfaced. Note that liquidity on the markets may be somewhat limited today in the afternoon as Canadian traders will be off for holidays and there will be a partial market holiday in the United States (equities will trade but bond markets will be closed)
WTI (OIL.WTI) bounced off the $83 price zone, marking the upper limit of the earlier broken resistance zone. Oil prices are up 3-4% today in response to Middle East escalation. Source: xStation5
