What is going on in Yemen and how the oil will be impacted? What is the reaction of the European markets? Below are the things which have been happening today and which market players need to take into consideration.
Saudi military operations
Saudi Arabia and its Gulf allies have launched air strikes in Yemen to counter rebels who took over the palace of President
Abdurabuh Mansur Hadi back in January. The big problem for the wider
region is that the rebels are backed by Iran and the President is backed
by Saudi Arabia.
While there is a possibility of a proxy war, there are also concerns about the prospect of a direct conflict between the two local superpowers.
Soaring oil
The uncertainty in the Middle East might be favorable for the oil market. Although Yemen is not a major oil producer sticking to the
39th place, it is close to the epicentre of world energy trade.
Oil surged over 6 percent at one point overnight and WTI is now well on course for its biggest week of gains since 2009.
European stocks are plunging
The selloff is lingering in the European trading session.
The DAX was down by close to 2 percent at one point and the euro continues to trade around a recent high of $1.10. Over the first three months of 2015, the German equity benchmark had jumped over 20 percent, but fresh tension in the Middle East and a stronger euro is hampering on that stunning rally.
U.S. stocks follow Europe
U.S. futures indicate stocks are heading the same way as Europe. The S&P 500 has now gone 26 days without stringing together back-to-back gains. That may not sound like a lot but data compiled by Bloomberg show it's actually the longest such stretch since 1994. Together with developments in Yemen, investors will be looking out for initial jobless claims and Markit's U.S. composite PMI.
Germanwings mystery
Beyond markets and geopolitics, the mystery behind the Germanwings air disaster deepens. According to The New York Times, one of the pilots of the doomed Airbus A320 jet may
have been locked out of the cockpit just minutes before impact.
