On Monday afternoon, Iran issued an arrest warrant for US President Donald Trump.
This came after Iranian officials accused him of his involvement in the January 3rd drone attack that killed Iranian General Qassam Soleimani.
Tehran’s prosecutor, Ali Alqasimehr, claimed that more than 30 people are facing “murder and terrorism charges”.
Despite Iran asking Interpol for help in detaining the US President, the international organization rejected the request.
Is Trump Under Arrest Threat?
Early reports have suggested that Trump is in no danger of being arrested.
That said, this warrant is certainly adding heightened tensions to an already troublesome US-Iran history.
Speaking on the Iranian matter, Brian Hook, the US special representative for Iran, said:
“It’s a propaganda stunt that no one takes seriously.”
Will US-Iran Reescalation Affect Markets?
The markets experienced a significant impact following the assassination of Iranian General Qassam Soleimani. WTI oil reached a yearly high of $63.80 from a low of $61.50. This marked an appreciation of 3.5% on an intraday basis.
Can we expect a similar reaction should the pursuance of the warrants intensify?
It is unlikely that we will see a similar rise as we saw after the Soleimani killing. However, the assassination saw news leaks of a possible surge towards $70.
Keeping a Close Eye
The possibility of US-Iran re-escalation remains on the cards and this could take safe-haven assets higher.
In fact, we have seen gold attracting several investors during times of heightened tensions. This alone signals a repetition.
In addition, US equities have appreciated in the run-up to general elections in the past. Prior to Trump’s win in 2016, for example, indices rose around 7%.
Now, with more negative news against Trump, this could effectively kill off any realistic chances of a second term.
His approval ratings have already been on a downwards spiral due to his response to the coronavirus pandemic. Now, it looks like the arrest warrant may have a detrimental effect on the President’s poll-standing going forward.
