Global Markets Calm as Diplomatic Efforts Ease Tensions Between Iran and Israel: Bloomberg Report

Global Markets Calm as Diplomatic Efforts Ease Iran-Israel Tensions

Market Rebound and Optimism

European stocks ticked higher and US equities signaled a rebound on Wall Street after Friday’s 1.5% selloff in the S&P 500. Treasuries slipped along with the dollar. Brent crude dropped below $90 a barrel. Gold advanced to $2,347 an ounce.

Investors took some comfort after the Iranian mission to the United Nations said the issue between Iran and Israel “can be deemed concluded.” Efforts from the US and other nations calling for restraint have helped diffuse the tension and avert a full-blown regional war.

Market Implications and Analyst Insights

While nerves are still running high given the possibility of Israeli retaliation, Timothy Graf, head of EMEA macro strategy at State Street, reminds investors that “equity markets are still only about 2% off all-time highs.” Graf states that the geopolitical development was well telegraphed, allowing the negative impact to be factored into current asset prices.

Although the threat of a strike and counter-strike cycle in the Middle East remains, traders are cautiously optimistic, believing that the situation is presently contained. Market concerns for higher energy prices and inflation are mitigated by the fact that the inflation we are currently observing is supply-side driven.

Global Implications and Reactions

Despite the unprecedented assault, the damage caused was minimal and resulted in no fatalities, thanks to successful interception measures implemented by the American, British, and French air forces in coordination with the Israelis. The quick de-escalation has been reflected in the VIX Index, leading to subsiding worries as Europe’s equivalent index dropped by 7%. Furthermore, Israel’s shekel rebounded with a rise of 0.9% on Monday.

Aluminum Surges Amid New Sanctions

Aluminum has surged by a record on the London Metal Exchange as a response to new US and UK sanctions which prohibited deliveries of Russian supplies created after a specific deadline. These sanctions are part of a wider effort to restrict President Putin’s funding of military activities, injecting significant uncertainty into the global commodities markets.

Upcoming Events and Economic Indicators

Key events and indicators to watch this week globally include Eurozone industrial production, US retail sales, UK jobless claims and unemployment, Japan CPI, and India’s elections.

Market Highlights

• Stocks:
• The Stoxx Europe 600 rose 0.3% as of 10:33 am London time
• S&P 500 futures rose 0.4%
• Nasdaq 100 futures rose 0.5%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index fell 0.9%
• The MSCI Emerging Markets Index fell 0.8%
• Currencies:
• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.1% to $1.0658
• The Japanese yen fell 0.4% to 153.87 per dollar
• The offshore yuan rose 0.2% to 7.2556 per dollar
• The British pound rose 0.3% to $1.2486
• Cryptocurrencies:
• Bitcoin rose 4.5% to $66,717.4
• Ether rose 6% to $3,252.61
• 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 six basis points to 4.19%
• Commodities:
• Brent crude fell 1.2% to $89.35 a barrel
• Spot gold rose 0.2% to $2,347.96 an ounce

This story was produced with the assistance of Bloomberg Automation.

— With assistance from Winnie Hsu and Allegra Catelli

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