April 14 (Reuters) - Iran warned Israel and the United

States on Sunday of a "much larger response" if there is any

retaliation for its mass drone and missile attack on Israeli

territory on Saturday, as Israel said "the campaign is not over

yet".

Iran launched explosive drones and missiles at Israel in

retaliation for a suspected Israeli attack on its consulate in

Syria on April 1, a first direct attack on Israeli territory

that has stoked fears of a wider regional conflict.

Below are analysts' quotes on how financial markets are

likely to react to developments.

SAMY CHAAR, CHIEF ECONOMIST LOMBARD ODIER, GENEVA

"The newsflow is about Iran and Israel, so that is going to

be most of (what people will be discussing Monday), but we are

still in an environment where we haven't yet digested the U.S.

inflation news and what that means for the Fed, and will they be

able to cut rates.

"We came into this weekend of geopolitical stress in the

aftermath of the CPI report. It is a fragile market environment

in the short term, but after a fantastic period, so it is only

fair that there's a bit of vulnerability."

TINA FORDHAM, FOUNDER AND GEOPOLITICAL STRATEGIST, FORDHAM

GLOBAL FORESIGHT, LONDON

"The scale of Iran's attack on Israel and the launch from

inside Iran as well as via proxies is significant. In terms of

the market reaction, we started to see commodity prices moving

higher on Friday.

"Over the next few days, we are waiting for Israel's

response -- this is the biggest attack on Israel in decades. The

risk of a regional war has increased meaningfully. The question

becomes does Israel seek to broaden the conflict? That is the

wild card.

"I think oil will open higher. Also signs that Iran wants to

enact a soft blockade of the Strait of Hormuz is a concern, as

this means there are potential both supply chain disruptions and

higher oil prices. We have entered a dangerous period ahead of

the U.S. elections."

NICK FERRES, CHIEF INVESTMENT OFFICER, VANTAGE POINT ASSET

MANAGEMENT, SINGAPORE

"I am not going to be an "armchair general" and pretend that

I have an edge on how the escalation will play out. From our

perch, the more important news for markets last week was the

trend re-acceleration in consumer price inflation and the

implication for the path of future short term interest rates.

"Moreover, disappointment in the detail of the results from

JPM and Wells on Friday. In that context, as we have noted for

some time, risk compensation in equities is poor in outright

terms and relative to Treasuries. We had already reduced our net

long equity exposure ahead of this over the past two weeks."

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT,

MILWAUKEE, WISCONSIN

"The key is whether Iran will consider this retaliation a

measured and final response, unless Israel decides to escalate.

In 2020, Iran considered its response to the U.S.'s killing of

General Soleimani a measured and equitable response. If it stays

tit-for-tat instead of escalating, then we will likely see a

sigh of relief across equities even if oil prices, gold, the

dollar and bonds all embed a risk premium to reflect the

conflict."