Israel to open direct talks with Lebanon
Israeli Prime Minister Benjamin Netanyahu said on Friday that he has issued an instruction to start direct negotiations with Lebanon âas soon as possibleâ, the Washington Post reported on Friday. However, Netanyahu insisted that Israelâs attacks across the country targeting Hezbollah would continue.
âIn light of Lebanonâs repeated requests to open direct negotiations with Israel, I instructed the Cabinet yesterday to initiate direct talks with Lebanon as soon as possible,â Netanyahu posted on X, adding: âIsrael appreciates the call made today by the Prime Minister of Lebanon to demilitarize Beirut.â He said the talks would focus on disarming Hezbollah and âthe formalization of peaceful relationsâ between Israel and Lebanon.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.31% on the day at $91.95.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms ârisk-onâ and ârisk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a ârisk-onâ market, investors are optimistic about the future and more willing to buy risky assets. In a ârisk-offâ market investors start to âplay it safeâ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of ârisk-onâ, stock markets will rise, most commodities â except Gold â will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a ârisk-offâ market, Bonds go up â especially major government Bonds â Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are ârisk-onâ. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of ârisk-offâ are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the worldâs reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them â even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
