US stocks slip, oil surges on Middle East conflict
By Wayne Cole
SYDNEY (Reuters) — U.S. stock futures slid on Monday as the military conflict in the Middle East lifted oil and Treasuries, while the sizzling September U.S. jobs report raised the rate stakes for inflation figures later in the week.
Holidays in Japan and South Korea made for thin conditions but the initial bid was for bonds and the safe harbours of Japanese yen and gold, while oil prices climbed by more than $3 a barrel.
The Israeli shekel initially sank to its lowest since early 2015 at 3.9880 per dollar, prompting the country's central bank to offer to sell up to $30 billion for shekels.
The prompt action helped the currency pare losses to 3.9050, while the central bank also said it would provide liquidity to markets as needed.
«The risk is higher oil prices, a slump in equities, and a surge in volatility supports the dollar and yen, and undermine 'risk' currencies,» said analysts at CBA in a note.
In particular, there was a chance oil supplies from Iran might be disrupted, they added.
«Given the tightness already facing physical oil markets in Q4 2023, an immediate reduction in Iran's oil exports risks pushing Brent futures above $US100/bbl in the short term.»
Israel pounded the Palestinian enclave of Gaza on Sunday, killing hundreds of people in retaliation for one of the bloodiest attacks in its history when Islamist group Hamas killed 700 Israelis and abducted dozens more.
The danger of disruptions to supply was enough to drive Brent up $3.14 to $87.72 a barrel, while U.S. crude climbed $3.28 to $86.07 per barrel.
Gold was also in demand, rising 1.1% to $1,852 an ounce.
In currency markets, the yen was the main gainer though moves were modest overall. The euro eased 0.3% to 157.37 yen, while the
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