The beautiful game turned ugly this afternoon as tensions between Iranian and American supporters spilled over into violence at the World Cup. Reports from the stadium confirm clashes in the stands, with security personnel racing to separate rival factions. The Metropolitan Police have declared a major incident, and extra officers are being deployed to the venue.
This is the sort of market volatility we warned about when the fixture was announced. The bond market, however, remains unmoved: gilt yields hold steady, perhaps a sign that investors view this as a localised disturbance rather than a systemic shock. Yet the capital flight from risk assets continues, with the FTSE 100 shedding 0.
3% in afternoon trading. One cannot help but draw parallels to the 2018 Russia-Saudi Arabia opener, when geopolitical posturing briefly rattled the indices. Then, as now, the real concern is the opportunity cost of security expenditure.
The Home Office has already announced additional funding for stadium policing, a cost that will ultimately be borne by the taxpayer. Fiscal responsibility demands a reckoning: how many billions of public money are we willing to spend on a football tournament? Central bank policy remains the anchor, but when scenes like this unfold, one wonders if the Bank of England Governor is watching the match or the spread on credit default swaps.
For now, the market is contained, but the volatility index is twitching.
