Israel-Hamas Flare-Up Hitting Financial Markets
BMI View: The risk that the ongoing exchange of fire between Israel and Hamas will escalate into a larger-scale Israeli offensive is significant despite neither side having much to gain from further conflict . Israel's fixed income and equity markets are set to post continued losses until a ceasefire is agreed.
We see significant risk that the ongoing exchange of fire between Israel and Hamas - the militant group and political party that still effectively rules the Gaza Strip - will escalate into a protracted Israeli air campaign or ground operation in Gaza, despite neither side having much to gain from a further flare-up. Israel launched what it described as an open-ended offensive named 'Operation Protective Edge' against Hamas on July 8. Israeli forces struck at least 50 sites in Gaza by air and sea, and the Israeli cabinet authorised the military to call up 40,000 troops for a possible ground invasion. According to the army, the offensive is targeting Hamas and is aimed at halting the rocket fire that has intensified in recent weeks amid tensions over the killing of three Israeli teenagers abducted on June 12 and the apparent revenge murder of a Palestinian teenager.
Incentives For A Ceasefire High...
|Further Losses On The Cards|
|Israel - ILS 2023 Government Bond Yield, %|