A selloff in stocks, gold and bonds deepened as the US and Iran hardened their rhetoric and signaled a potential escalation to their conflict, which is entering its fourth week. Asian shares fell for a third day and were set to enter a correction, while bonds sold off as the prolonged war threatened to stoke inflation, slow growth and push central banks to consider interest-rate hikes. Futures contracts indicated Asian losses would extend to Europe and the US. Gold slid for a ninth day to around $4,360 an ounce, underscoring the broad-based retreat across assets.
Rhetoric escalated during the weekend with President Donald Trump issuing a 48-hour ultimatum to Tehran to reopen the Strait of Hormuz — crucial for the flow of oil and gas from the Middle East — failing which the US will “obliterate” Iran’s power plants. The Islamic Republic responded that any such attack would prompt it to shut the waterway indefinitely and target US and Israeli energy infrastructure across the region. While the reaction in stocks was more pronounced, the response to the latest escalation in rhetoric was more muted in oil markets. Brent was volatile at the start of Monday’s session before edging up 0.6% to trade around $113 a barrel. Brent and WTI have both surged more than 70% this year. Global markets have been rattled by the conflict in the Middle East, with stocks and bonds selling off in tandem last week as concerns about inflation and slower economic growth intensified. That’s also weighing on policymakers, with Federal Reserve Chair Jerome Powell saying the central bank needs to see more progress on inflation before cutting rates again. The selloff in the US accelerated on Friday as traders started anticipating that the Fed may shift to hiking interest rates this year as oil prices threaten to deliver a fresh inflation shock. Markets are bracing for similar moves from central banks in Japan, Europe and the UK, even as the war also dampens the outlook for economic growth globally. The nervousness showed up in the MSCI Asia Pacific Index, which fell 3.3%. Japanese shares dropped 3.5% and South Korean equities plunged 5.7%. MSCI’s All Country World Index — the broadest measure of global equities — extended its losses this year to 3.8%. Asian shares have pared their yearly advance to less than 2%. Markets stayed volatile across assets. The South Korean won fell to the lowest level since 2009, while the Indian rupee hit a new record low. Gold tumbled 2.9%, posting its longest losing streak since October 2023 as sentiment stayed fragile at the start of the week. Bond markets have also been impacted amid concerns about inflation and higher interest rates. US yields are perched at their highest in months after a third straight week of bond losses. Short-term notes led last week’s rout. Two-year Treasury yields climbed four basis points to 3.94%, while those on the benchmark 10-year rose by three basis points to 4.41%. Elsewhere, silver fell for a fifth consecutive day. A Bloomberg gauge of the dollar edged up 0.1%.
Nikkei -3.35% Hang Seng -3.29% CSI -2.52% Shanghai -2.85% Shenzen -3.19%
Eur$ 1.1542 CNH 6.9165 CNY 6.9115 JPY 159.49 GBP 1.3313 CHF 0.7895 RUB 83.1892 TRY 44.3287 WTI$ 100.20 +2.20% Gold 4,3340 BTC 68,817 +0.64% ETH 2,069 +0.23%
S&P -0.75% Nasdaq -0.92% EuroStoxx -1.93% FTSE -1.33% Dax -2.10% SMI -1.60%
Macro :
- Risk Sentiment at Further Risk From Surge in Rate-Hike Bets
- Trump’s Iran War Drive Exposes Limits of ‘Yes Sir’ Cabinet
- JPMorgan Cuts S&P 500 Target to 7,200 on Rising Iran Tensions
- JPMorgan Cuts S&P 500 Target to 7,200 on Rising Iran Tensions
- Mercuria Settles Dispute With Ex-Gas Trader Over Annual Bonus
- Hedge Fund Sees 31% Gain From Oil-Stock Bet Before Prices Surged
- German Conservatives Set for Election Win in Socialist Haven
- Qatar Airways Parks Long-Haul Jets in Storage in Spain: FT
Keep an eye on :
Keep an eye on :
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