Market Summary
Oil Extends Rally as Hormuz Deal Outlook Deteriorates: Brent crude rose 5.17% yesterday and has gained a further 0.3% this morning, marking a fifth consecutive day of gains to $87.98 a barrel. The rally followed new demands from U.S. President Donald Trump toward Iran, clouding prospects for an agreement to reopen the Strait of Hormuz. The sustained rise in oil prices has revived concerns over inflation and price pressures, particularly after Friday's softer-than-expected U.S. jobs data tempered expectations for an immediate Federal Reserve rate hike. Attention now turns to Wednesday's U.S. CPI report, which could provide fresh signals on the path for interest rates.
Gold Pulls Back After Surging Above $4,440: Spot gold eased to around $4,381 an ounce this morning after climbing above $4,440 earlier in the session following yesterday's rally. Technical buying was triggered after gold broke above its 100-day moving average on Monday, supporting the latest move higher. Despite this morning's pullback, the metal remains supported by expectations of easier U.S. monetary policy and ongoing geopolitical uncertainty.
AI Optimism Keeps Technology Stocks Supported: Investors continue to look to Nvidia's major Wall Street funding package as a catalyst for renewed optimism around AI investment and its importance to the outlook for equities. Technology sentiment remained buoyant overnight, with South Korea's KOSPI rising around 1% and Samsung Electronics gaining approximately 3.5%. Nasdaq 100 futures are up 0.18% this morning, while European shares are set for a broadly flat open.
Yen Weakens as Intervention Rally Fades: The Japanese yen weakened around 1% on Monday, erasing roughly half of its recent intervention-led rally. The move is significant for traders, who remain alert to the possibility of further official support. The yen was little changed this morning at around 159.25 per dollar. Elsewhere, the Australian dollar slipped after the Reserve Bank of Australia left its key interest rate unchanged, with policymakers betting that higher unemployment and weakness in the property market will weigh sufficiently on economic activity to help cool inflation.
Economic Calendar
- U.S. Home Sales Data
- Brazil CPI Data
- Mexico Industrial Production
Key Market Moves Today
- S&P 500 Futures: +0.14% (7,787.5)
- Brent Crude: +0.30% ($87.98)
- Bitcoin: -0.04% ($64,081)
- Spot Gold: -0.23% ($4,381)
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