Key points:
The war in Israel has added to the upside risks to oil prices and downside risks to shares in the near term.
If Iran stays out of conflict & a major supply disruption is avoided the impact on shares should ultimately be minimal.
If alternatively, oil prices do have a renewed surge it’s more likely to be deflationary as it will act as a “tax on spending”. So central banks, including the RBA, should look through it.
The rise in petrol prices has already added $12 a week to the average household fuel bill in Australia since May.
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