(Bloomberg) — Global markets showed signs of stability, as traders awaited further developments in the Middle East following Iran’s unprecedented attack on Israel over the weekend.
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Oil prices fell on speculation that the conflict would remain contained after Iran said “the matter could be considered over,” and President Joe Biden reportedly told Israeli Prime Minister Benjamin Netanyahu that the United States would not support an Israeli counterattack. The dollar strength gauge was little changed while Treasuries edged lower after yields fell in the previous session.
“The muted market response likely stems from the very complex sentiment in the market at this point,” said Hebe Chen, an analyst at IG Markets. “Market participants are certainly not losing hope that last weekend’s events were just a one-off event, while holding their breath thinking about what might happen next,” she added, referring to to the attacks.
Asian stocks fell to a six-week low, following a fall in US stocks on Friday, due to escalating geopolitical risks, disappointing bank results and the prospect of holding rates in place for longer. interest by the Federal Reserve. U.S. and European stock futures edged higher in Asia after the S&P 500 suffered its worst session since January on Friday amid a flight to safety.
Chinese stocks are an exception in the region, due to renewed regulatory support from Beijing. The State Council vowed on Friday to toughen stock listing criteria, crack down on illegal stock sales and strengthen supervision of dividend payments.
Separately, developer China Vanke Co. said it plans to resolve liquidity pressure and operational difficulties in the near term, as China’s top leaders become increasingly alarmed by the country’s prolonged real estate crisis and its effects on the sluggish economy.
Regarding other currencies, Malaysia’s central bank reiterated its readiness to support the ringgit, which is hovering near its lowest level since 1998. At the same time, Japanese Finance Minister Shunichi Suzuki said that Officials were closely watching the yen as it fell to its lowest level in 2024 against the yen. dollar.
Aluminum and nickel jumped following new US and British sanctions banning deliveries of Russian supplies after midnight on Friday. Gold also gained.
With investors already rattled by persistent inflation and the prospect of higher, longer-lasting interest rates, the escalating crisis in the Middle East could inject new volatility into markets. As the conflict widens, many believe oil could rise above $100 a barrel and expect a flight to Treasuries, gold and dollars, as well as further losses stock exchanges.
Bitcoin recovered after falling nearly 9% following the attacks. Stock markets in Saudi Arabia and Qatar posted modest losses on Sunday despite low trading volumes. The benchmark Israeli stock index fluctuated between gains and losses at least nine times before closing with a slight gain.
As Wall Street’s earnings season got underway, results from big banks offered the latest window into how the U.S. economy is faring amid an interest rate environment muddled by persistent inflation.
JPMorgan Chase & Co. and Wells Fargo & Co. both reported net interest income — the income they generate from loans — that missed estimates amid rising financing costs. Citigroup Inc.’s profits topped analyst estimates as companies tapped markets for financing and consumers turned to credit cards – signs that a prolonged period of high interest rates will benefit to the big banks.
“Many economic indicators remain favorable. However, looking ahead, we remain alert to a number of important uncertain forces,” said Jamie Dimon, CEO of JPMorgan. He cited wars, growing geopolitical tensions, lingering inflationary pressures and the effects of quantitative tightening .
Traders will soon turn their attention to looming economic data as they fine-tune their bets on central bank easing cycles, as well as the spring meetings of the International Monetary Fund and the World Bank in Washington. This week, Chinese growth data and inflation figures from Japan, the Eurozone and the United Kingdom are due.
Key events this week:
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Euro zone industrial production, Monday
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U.S. Retail Sales, Empire Manufacturing, Business Stocks, Monday
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Federal income tax will be due in the United States on Monday
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The spring meetings of the IMF and the World Bank begin Monday in Washington. The main ministerial meetings will be held from April 17 to 19
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Canadian CPI, Tuesday
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China real estate prices, retail sales, industrial production, GDP, Tuesday
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Jobless claims in the United Kingdom, unemployment, Tuesday
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New Zealand house sales, CPI, Wednesday
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Eurozone CPI, Wednesday
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UK CPI, Wednesday
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Unemployment in Australia, Thursday
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Japan CPI, Friday
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India elections begin Friday
Some of the main market movements:
Actions
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S&P 500 futures rose 0.4% as of 1:55 p.m. Tokyo time
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Nikkei 225 (OSE) futures fell 1%
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The Japanese Topix fell 0.5%
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Australia’s S&P/ASX 200 fell 0.5%
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Hong Kong’s Hang Seng fell 0.7%
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The Shanghai Composite rose 1.2%
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Euro Stoxx 50 futures rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0652
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The Japanese yen fell 0.4% to 153.81 per dollar
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The offshore yuan rose 0.1% to 7.2588 per dollar.
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The Australian dollar rose 0.3% to $0.6486.
Cryptocurrencies
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Bitcoin rose 1.7% to $64,931.16
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Ether rose 2.3% to $3,140.36
Obligations
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The 10-year Treasury yield rose three basis points to 4.56%
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The Japanese 10-year yield is unchanged at 0.850%
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Australia’s 10-year yield fell two basis points to 4.25%
Raw materials
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West Texas Intermediate crude fell 0.3% to $85.37 a barrel
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Spot gold rose 0.5% to $2,356.85 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Winnie Hsu.
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