Middle East powder keg update

Stephen Innes SPI Asset Management

Its hardly surprising risk is a bit unstable this morning.

Following a slew of airstrikes on Houthi sites and installations in Yemen, the group has made it clear to both Number 10 Downing Street and The White House that they will continue to assault ships in and around the Red Sea.

The fact that the attacks have continued makes it more likely that US airstrikes on Yemen will continue. The Houthis fired an anti-ship ballistic missile at the US-owned Gibraltar Eagle in the most recent incident.

After seven years of unwinnable war with the Saudi-led coalition (supplied by the US), it appears that the Houthis have a high threshold for casualties, both civilian and combatant and that their basic tenet appears to be an ongoing state of armed confrontation.

The current regime in Tehran claims that the Houthis operate independently from the Quds and are operating autonomously from Iraq oversight. However, everyone knows this rebuke is bordering on the theatre of the absurd. It appears that any hope to resolve this issue means the US pushes Israel into an unlikely ceasefire or, in the worst case, the ultimatum request will get delivered to Tehran.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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