(Bloomberg) — Global markets showed signs of stability and oil prices declined as traders wagered tensions in the Middle East won’t escalate after Iran’s attack on Israel over the weekend. European stocks and US equity index futures gained.
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Oil dropped on speculation that the conflict would remain contained after Iran said “the matter can be deemed concluded,” and President Joe Biden reportedly told Israeli Prime Minister Benjamin Netanyahu that the US won’t support an Israeli counterattack. Treasuries edged lower after yields slipped in the previous session.
“Market participants are certainly not giving up hope that the past weekend’s events were just a one-off occurrence, while holding their breath for what could happen next,” said Hebe Chen, an analyst at IG Markets.
With investors already rattled by sticky inflation and the prospect of higher-for-longer interest rates, the escalation in the Middle East had injected fresh volatility into markets. Many analysts predict oil could surpass $100 a barrel if the conflict widens and forecast a flight to Treasuries, gold and the dollar, along with further stock-market losses.
For now, attention will return to Wall Street’s earnings season, which kicked off with disappointing numbers for big banks on Friday and continues today with reports from Goldman Sachs, Schwab and M&T Bank.
There’s also a raft of economic data due this week, including Chinese growth data and Japan, Eurozone and UK inflation readings. The International Monetary Fund and World Bank spring meetings will be held in Washington.
Separately, aluminum and nickel surged following new US and UK sanctions that banned deliveries of any Russian supplies after midnight on Friday. Gold also gained.
Shares in Asia slipped, tracking Friday’s drop in US stocks, on escalating geopolitical risks, bank earnings and the prospect of the Federal Reserve keeping interest rates higher for longer.
Key events this week:
Eurozone industrial production, Monday
US retail sales, empire manufacturing, business inventories, Monday
Federal income taxes due in the US, Monday
IMF and World Bank spring meetings start in Washington, Monday. The main ministerial meetings will be held April 17-19
Canada CPI, Tuesday
China property prices, retail sales, industrial production, GDP, Tuesday
UK jobless claims, unemployment, Tuesday
New Zealand home sales, CPI, Wednesday
Eurozone CPI, Wednesday
UK CPI, Wednesday
Australia unemployment, Thursday
Japan CPI, Friday
India’s elections begin, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.3% as of 8:04 a.m. London time
S&P 500 futures rose 0.6%
Nasdaq 100 futures rose 0.6%
Futures on the Dow Jones Industrial Average rose 0.4%
The MSCI Asia Pacific Index fell 0.8%
The MSCI Emerging Markets Index fell 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro rose 0.1% to $1.0654
The Japanese yen fell 0.5% to 153.93 per dollar
The offshore yuan rose 0.1% to 7.2590 per dollar
The British pound rose 0.2% to $1.2471
Cryptocurrencies
Bitcoin rose 4% to $66,423.43
Ether rose 5.4% to $3,235.58
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.55%
Germany’s 10-year yield advanced four basis points to 2.40%
Britain’s 10-year yield advanced five basis points to 4.18%
Commodities
Brent crude fell 0.6% to $89.88 a barrel
Spot gold rose 0.4% to $2,354.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
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