The financial markets movement this week is likely to be dominated by the aftermath of the downed Malaysian Airways flight MH17 and the ongoing ground operation by Israeli troops in Gaza.
The Ukrainian/Russian conflict was heightened after the passenger jet was downed in Ukraine, with global leaders quick to criticise, yet definite facts as to who is to blame are unclear. The likelihood of further sanctions to Russian countries, as a means of intervention unnerves investors.
Malaysia Airlines has lost contact of MH17 from Amsterdam. The last known position was over Ukrainian airspace. More details to follow.— Malaysia Airlines (@MAS) July 17, 2014
The Israeli army operation in Gaza, is now in its second week, with a ground operation underway, increasing regional tensions as traders seek safe haven assets.
Fears of supply disruption have been behind the recent rally in crude, as traders focus on the potential of interruption, rather than actual.
The three areas of focus:
1. Russia supplies 10% of the world’s Oil, the increased sanctions from Western countries, could disrupt supplies bidding up Crude on Friday.
2. Israel/Gaza ground offensive is situated alongside the key suppliers of Oil
3. The ISIS insurgents in took control of some parts of Iraq, including the Baiji refinery, the fear is that the fighters may move towards the Southern Oil fields.
The Rightmove House Price Index release today showed the first monthly decline in property prices since December 2013. A minimal decline of 0.8% for the month of July is likely due to the significant increase over the last 12 months, and the increased requirements for mortgages.