LONDON: Tensions over Iran hit markets on August 17 as European shares fell, oil rose, and major bond yields reached multi-year highs after fresh escalation signals from Tehran.
Reuters cited a senior Iranian official as saying Tehran had shifted from a defensive to a “fully offensive” policy. The official also warned of escalation in the Strait of Hormuz if diplomacy with Washington failed.
European bourses moved lower as the session progressed. Technology led sector performance, while consumer products and services lagged, according to the market wrap.
Bond markets also weakened. The U.S. 30-year Treasury yield reached 5.29%, its highest level since 2007. Germany’s 10-year Bund yield climbed to 3.21%, a level not seen since 2011.
Brent crude traded between USD 88.01 and USD 89.68 a barrel before recovering to about USD 88.87. Oil remained sensitive to conflicting reports on Iran-US diplomacy and shipping through the Strait of Hormuz.
Read: Brent Crude Holds at USD 88.55; No Hormuz Ships Tracked Sunday
The U.S. Dollar Index fell about 0.2%, while sterling gained roughly 0.3% against the dollar. Gold traded near USD 4,384 an ounce after touching USD 4,416.
Read: Fed Rate Hike Bets Drop as Dollar Falls to June Low
President Donald Trump of the United States also repeated his opposition to an Iranian nuclear weapon, while Iranian officials said talks with Oman over maritime transit remained under way.
