Developments in Israel and Gaza have dominated headlines over the weekend as investors try and assess the global impact the conflict may have on investment markets.
Without any major broadening in the conflict, a few supply interruptions for oil can be expected.
However, tightening in Iran's oil sanctions could result in supply shocks.
The United States has not been enforcing its existing sanctions on Iranian oil, but the level of Iran's involvement in the conflict could pressure the US to reconsider this position.
The oil price spiked over five per cent during the Asian trading session on Monday with Liquified Natural Gas (LNG) gained almost 15pc in Europe.
The market remains incredibly sensitive to the risks in the region, suggesting volatility particularly in the energy sector to remain elevated.
The market remains incredibly sensitive to the risks in the region, suggesting volatility particularly in the energy sector to remain elevated.- Christopher Hindmarsh, JBWere Limited
Equity markets struggled last week with the US major indices the only to see positive returns.
The tech heavy NASDAQ saw returns of 1.6pc on the back of gains from mega-cap tech stocks Microsoft (3.65pc), Apple (3.67pc), Meta (5.07pc) and Nvidia (5.2pc).
European equities were down over the week as a 1.1pc increase in the Euro Stoxx 50 on Friday was not enough for the index to close the week in positive territory, closing 0.8pc lower over the week.
The ASX200 underperformed by falling 1.34pc.
However, it was Japan's Nikkei 225 which experienced the largest losses falling by 2.71pc.
US payrolls were released last week which came in significantly higher than expected.
Payroll jobs were up 336k against 170k expected, following three consecutive months of downward revisions.
The US 10-year yields jumped by around 14bps to a high of 4.89pc following the results, before closing on Friday at 4.80pc.
Yields were higher globally over the week, with the selloff led by the US yield curve steepening further.
Thirty-year yields were 27bps higher compared to just 4bps increase in the 2-year.
While markets continue to believe rates are at or near their peak, pricing for another US rate hike in November rose to 30pc following the jobs data.
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