Just now, a collective plunge! Iran, latest warning!

European stock markets, gold, and silver all plummet!

Affected by the renewed escalation of the Iran situation, major European stock indices all fell sharply today. As of press time, the German DAX30 and UK FTSE 100 both dropped over 2%, while France’s CAC40 declined 1.78%. Additionally, major indices in Spain, Sweden, Austria, and Italy all fell more than 2%.

Meanwhile, soaring oil prices have sparked inflation concerns, leading to a significant decline in market expectations for further rate cuts by central banks worldwide. Gold and silver prices also tumbled sharply. As of press time, spot gold fell below $4,700 per ounce, nearly a 3% intraday drop; spot silver dropped over 6%, currently at $70.71 per ounce.

Latest Iran Situation News: According to CCTV News, on March 19, the spokesperson for Iran’s Hatam Anbia Central Command warned that if energy facilities are attacked again, Iran will launch further strikes against the energy infrastructure of the U.S., Israel, and their allies, until they are completely destroyed. Iran’s counterattack will be far stronger than before.

European stocks plunge sharply

The escalation of the Iran situation has heightened concerns over rising inflation. Today (March 19), major European stock indices all declined.

As of press time, the German DAX30 index fell by 2.41%, France’s CAC40 by 1.78%, and the UK FTSE 100 by 2.02%. Additionally, the European Stoxx 50, Spain’s IBEX35, Sweden’s OMXSPI, Austria’s ATX, and Italy’s MIB all declined over 2%. Portugal’s PSI20, Belgium’s BFX, and the Netherlands’ AEX all fell more than 1.70%.

The European Central Bank, Bank of England, Sveriges Riksbank, and Swiss National Bank will announce monetary policy decisions on Thursday. Market expectations are that all these central banks will keep interest rates unchanged, as policymakers observe the course of the Iran conflict and assess its impact on regional growth and inflation prospects.

Just recently, Switzerland kept its policy rate steady at 0%, in line with market expectations. Sweden’s central bank maintained its benchmark rate at 1.750%. The Riksbank stated that rates will remain at current levels for some time.

Despite Europe importing relatively little oil and natural gas from the Middle East, energy prices have surged significantly. Analysts warn that European buyers will have to compete fiercely with Asian importers for energy supplies from other parts of the world, further driving up prices.

Sander Tordoir, Chief Economist at the European Reform Center, said that Europe’s overall public finances remain sound, but if large-scale subsidies similar to those in 2022 are repeated, the outlook could be concerning.

In 2022, EU energy subsidies nearly doubled from the previous year, reaching €397 billion. Over two years, the UK provided about £75 billion in support, including subsidies for household energy bills. Tordoir said, “If European countries need to spend at this level in the future, it is doable but will be very painful.”

Foreign media point out that the UK may be the most prominent example. This week, the UK government announced a £53 million fund to help households reliant on heating oil, especially severe in Northern Ireland. However, the UK has yet to take broader measures, such as delaying the upcoming fuel tax hike.

The UK government is currently adhering strictly to fiscal rules to reassure bond investors worried about high debt and low growth prospects. UK bond yields tend to rise faster than neighboring countries during market sell-offs, increasing borrowing costs. Last year, £1 of every £10 of UK government expenditure went toward debt interest. Now, with fiscal conditions just beginning to improve, the Iran conflict could disrupt this trend. Tordoir said, “The UK is especially vulnerable.”

Marcel Fratzscher, Director of the German Institute for Economic Research, stated that as Europe’s largest economy, Germany has little fiscal room to maneuver. In 2022, Germany temporarily cut gasoline and diesel taxes, costing €3 billion. The institute estimates that if oil and gas prices stay at current levels throughout the year, Germany’s economic growth could halve to 0.5%. Fratzscher said, “This isn’t something the government can fix with existing budgets or simple reallocations, and this is just the beginning.”

France faces similar issues. Although it has abundant nuclear power, making its energy structure relatively stable, the French government has long struggled to reduce debt levels.

Greece, Spain, and Portugal are relatively bright spots. These countries, once worried about high debt and weak fiscal discipline, have improved their fiscal situations—some reducing debt, others like Spain benefiting from strong economic growth. This has enabled them to take early measures to shield households and businesses from rising costs.

Latest Iran Warnings

According to CCTV News, on March 19, local time, the spokesperson for Iran’s Hatam Anbia Central Command said that Iran’s armed forces’ offensive and defensive actions are ongoing and unprecedented in strength.

He stated that attacking Iran’s energy infrastructure is a serious mistake, and Iran’s counterattack is underway and not over. If such incidents occur again, Iran will launch further attacks on the energy infrastructure of the U.S., Israel, and their allies, until they are completely destroyed. Iran’s response will be far stronger than before.

On March 19, local time, Israel’s Defense Forces detected a new round of ballistic missile attacks from Iran. This was the eighth attack since early that day, with no casualties reported so far.

Preliminary military assessments suggest that the missile was likely intercepted, but the attack triggered sirens in Jerusalem and parts of central Israel.