According to Danske Bank analysts tensions are likely to remain high even as an outright military conflict between the US/Saudi Arabia and Iran remains a low likelihood,.
Key Quotes
“If the situation does not escalate much further, the impact on financial markets and global economy should be limited.”
“However, in a serious military conflict involving Iran and US/Saudi Arabia, world economy would fall into recession as oil prices could rise to USD150.”
“The inflation spike would cause a sharp drop in real wages, reducing private consumption. Uncertainty would hit investments, causing central banks to react.”
“Risky assets would sell off while safe haven assets would rally.”
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