No Meaningful Israel-Hamas Escalation, Yet

The Israeli-Hamas conflict didn’t see a meaningful escalation over the weekend, although it was close, with the weather a touted impediment to the IDF’s ground assault on Gaza after warnings of an imminent multi-method attack.

• More recently, Egyptian security sources speaking to RTRS noted that the U.S., Israel & Egypt have agreed to a ceasefire in southern Gaza as of 07:00 London time, which would line up with the reopening of the Rafah border crossing between Egypt & Gaza. The sources have flagged that the ceasefire will last for several hours, but that hasn’t been much clarity on that front. This is a positive from a humanitarian standpoint, but not a gamechanger for the conflict on the whole.
• Bunds, gold and oil eased at the margin as the headlines were digested, while e-minis caught an incremental bid.
• A reminder that Bunds, gold and oil were beneficiaries of pre-weekend geopolitical risk hedging.
• U.S., Israeli & Hamas officials haven’t provided information re: the story, while more recent headlines have noted that Israel plans to evacuate residents near the Lebanese border, pointing to continued preparatory efforts re: a deeper conflict.
• A quick reminder that the weekend saw the U.S. employ back-channel talks with Iran, while Iran issued a warning to Israel re: an escalation in the conflict. U.S. President Biden also stressed that Iran should not become involved in the conflict.