Last Thursday, the United States seized the opportunity to take down Iran's highest military commander, Soleimani.
Despite the role of the EU, China, and even Russia in the Middle East, the United States acted alone. Even the UK was left in the dark and only heard of the drone strike on the ground in Iraq when it took place.
Not surprisingly, the markets are not up to the unexpected air raid. We have seen the President even come into contact with Kim Jong-un despite frequent nuclear tests and threats to attack allies and even the United States.
Even such an action could not encourage Trump to act.
Trump has been targeting Iran since he saw the opportunity to take over the Oval Office. After the United States left the nuclear deal, it was only a matter of time before it escalated.
Iran resumed its enrichment program, violating the terms of the agreement, which continued after the US withdrawal.
The US president also reintroduced crippling sanctions, demanding that no one buy oil without a U.S. waiver.
It was a stage for what has unfolded and what may still come …
With the US and European majors sitting at or near record heights, any excuse to jump ship would have been good enough.
The risk of protracted proxy war in the Middle East between the U.S., Iran and its allies increased on Friday.
Interestingly, the timing of the airstrike coincided with Trump's upcoming impeachment process, which raised questions about the motive.
President Clinton launched an attack on Iraq in 1998. The start coincided with the approval of the House of Representatives for two impeachment proceedings.
A military conflict in the Middle East would certainly delay impeachment, but could also lead to Trump's death.
Iran's top leader, Ayatollah Khamenei, has promised revenge. The regime's response is hardly surprising. However, what Trump may not have considered was a nationwide association to avenge the drone attack.
We have seen that the regime will have to deal with uprisings in the country if the sanctions take effect. A U.S. military strike against a nation that is already under pressure and clearly highlights the risks is more than mere retaliation.
In contrast to 1980 and the ten-year war with Iraq, Iran is a completely different animal after 40 years.
Iran's presence in the region has increased over the years. This happened despite Saudi Arabia and Israel trying to limit the increase in power.
Civil war, unwanted American interference, and more have contributed.
While the US President spoke of the desire to withdraw from the Middle East, the latest move has left the US with no choice but to camp for the foreseeable future.
Troublingly, however, proxy wars may not be the biggest blows to Western nations that are likely to be involved in a military campaign.
There will again be a risk of terrorist attacks on the home soil of those involved in tearing down the so-called Shiite axis of evil, which could lead to the unthinkable.
Iran is unable to sit back and play it safe. The country will expect a reaction and a strong one.
In contrast, US voters have just been exposed to extensive trade with China, which previously raised the prospect of a recession.
The war-friendly agricultural belt suffered the most from Trump's trade war, which may question how much support the US President would receive if a prolonged conflict hit the US economy.
Not too unlike the US President, the democratic leader Bloomberg also comes from another world. The only exception is that Bloomberg has the experience of being Mayor of New York.
Trump's steps since winning in 2016 have made a military conflict almost inevitable.
Perhaps this is a conflict that few have wished for.
Voters have already taken to the streets to protest the air raid. This will likely continue if the United States responds to retaliation from Iran.
Nobody likes insecurity, and Iran's reach and strength in the region bring a lot of insecurity with what lies ahead.
Bloomberg will lick his lips at the prospect of an unwanted conflict in the Middle East. Trump may have just accepted a little more than he can chew.
In any case, voters don't like strong gains from the stock markets. That would hit consumer confidence and consumer spending hard.
Global trading conditions remain a concern, despite the Phase 1 agreement. It would be a bitter pill to swallow for a president who claims to make America great again …
Another consideration is whether China and Russia will stand by or support Iran. Both are closely related to the regime … That would certainly tear up any trade agreement … It would also raise the possibility of a completely different conflict in the East.
Trump had his party's backing in the indictment.
This raises the question of whether such action was necessary to distract and distract from what was unlikely to lead to an actual conviction.
However, the attack could lead to the loss of party support … Time will tell.
Iran has already been involved in the cut in oil supply, so we can expect more from it. While this is positive for crude oil prices, it would be negative for oil-dependent sectors, including aerospace and manufacturing.
Risk aversion would also boost demand for safe havens such as the Japanese yen and gold.
Military stocks would also get a boost. Of course, this assumes that retaliation will take place in the coming days …
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This items was originally published on FX Empire "data-reactid =" 65 "> This article was originally published on FX Empire