As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Oil jumped after U.S.-Iran talks stalled, while resilient U.S. jobs data, chip strength and the upcoming Trump-Xi summit kept broader risk sentiment from breaking down.
In Asian Equity Markets stocks traded mixed on Monday as investors balanced renewed Middle East tension against strength in technology shares and optimism around the upcoming U.S.-China summit. South Korea’s KOSPI surged around 4.3 percent to a record high, powered by semiconductor names and the broader AI trade. Japan’s Nikkei slipped around 0.5 percent after touching an intraday high, with SoftBank weighing on the index. Chinese equities were firmer, supported by stronger export data and factory price growth, while Hong Kong’s Hang Seng was more subdued. Australia and India traded lower as higher oil prices pressured energy-importing markets.
In Currency Markets the U.S. dollar firmed as investors reacted to President Trump’s rejection of Iran’s latest response to a U.S. peace proposal, keeping the Strait of Hormuz risk premium alive. The dollar index traded around 98.0, while the euro, yen and sterling edged lower against the greenback. The yen remained in focus after recent intervention speculation, but dollar-yen moved higher as geopolitical uncertainty and stronger U.S. jobs data supported the dollar. China’s yuan strengthened to its highest level in more than three years, helped by upbeat export and producer price data ahead of the Trump-Xi meeting expected later this week.
In US Equity Markets stocks finished higher on Friday as stronger-than-expected U.S. jobs data helped investors look through geopolitical risk and reinforced confidence in the resilience of the U.S. economy. April non-farm payrolls rose by 115,000, almost double expectations, reducing fears of an immediate labor-market slowdown but also supporting the Federal Reserve’s cautious stance on rate cuts. The move helped Wall Street remain close to record levels after the recent AI-led rally, even as investors continued to monitor oil prices and the U.S.-Iran deadlock. U.S. futures were little changed by Monday morning, suggesting markets were cautious but not in full risk-off mode.
In Commodities Markets oil rose sharply after President Trump called Iran’s response to the U.S. peace initiative “totally unacceptable,” raising concern that the conflict could continue and the Strait of Hormuz could remain largely closed. Brent crude climbed more than 3 percent to around $104.90 per barrel, while U.S. crude rose toward $99.15. The move reversed part of last week’s peace-hope-driven decline and put energy prices back at the center of the inflation debate. Gold was softer despite geopolitical risk, pressured by the firmer dollar and higher yields, while broader commodity markets remained highly sensitive to any sign of progress or breakdown in U.S.-Iran talks.
In European Equity Markets stocks were muted by late morning as investors weighed higher oil prices, stalled U.S.-Iran negotiations and another batch of corporate news. The pan-European STOXX 600 was broadly flat around 611.7 points, with regional bourses mixed. London’s FTSE 100 edged higher, helped by strength in energy names as oil prices rose, while France’s CAC 40 traded lower. Defence and luxury shares were among the weaker areas, with names such as Rheinmetall, Hensoldt, Hermes and Burberry under pressure. Telecoms outperformed, supported by gains in BT and Vodafone, while Delivery Hero jumped after a stake sale to activist investor Aspex.
In Bond Markets yields moved higher as the renewed oil spike revived inflation concerns and pushed investors to reassess the path for central-bank policy. U.S. Treasury yields rebounded after Friday’s dip, with the two-year yield trading near 3.92 percent and the benchmark 10-year yield just above 4.39 percent. The stronger U.S. payrolls print reinforced the view that the Federal Reserve has little urgency to cut rates, while higher crude prices complicated the disinflation story. In Europe, bond markets remained sensitive to the energy shock, with ECB officials warning that persistent inflation could still require tighter policy if price pressures broaden.
