Global markets: Global markets began the week on a mixed trend as investors anticipated the release of crucial US macroeconomic data while monitoring ongoing US-Iran talks, which are aimed at reaching a permanent solution and easing risk sentiment.
According to Anadolu Agency, US President Donald Trump’s harsh remarks directed at the Iranian delegation over the weekend fueled concerns during the negotiations in Switzerland. However, the Iranian side reportedly did not take Washington’s threats seriously. Despite moments of heightened tension, the presence of both parties at the negotiation table maintained hopes for potential peace in the Middle East.
Maritime shipping traffic through the Strait of Hormuz decreased compared to the previous week. Analysts suggest that concerns over energy supply will persist regardless of any progress made in the talks. Market observers are also focusing on how slowing tanker traffic might impact oil prices.
This week, the US will release the Personal Consumption Expenditures index and growth figures, which are expected to highlight the effects of oil prices on the macroeconomy. The Federal Reserve is anticipated to implement a rate hike by the end of the year, driven by hawkish remarks from new chair Kevin Warsh and ongoing concerns about the slow pace of achieving lasting peace in the Middle East.
In financial markets, the yield on the US 2-Year Treasury bond rose to 4.22%, reflecting its sensitivity to Fed policy, while the 10-Year bond yield increased by 3 basis points to 4.48%. The US Dollar Index continued its upward trajectory, standing at 100.9 on Monday, amid expectations of a hawkish stance by the Fed. Gold prices, under pressure from anticipated prolonged high interest rates and hawkish Fed signals, found support from progress in US-Iran talks, rising by 0.6% to $4,180 per ounce on Monday.
American stock indexes started the week on a negative note. In Europe, stock markets closed lower on Friday, except for Italy, and continued trading in red on Monday. Investors are keenly watching European Central Bank (ECB) President Christine Lagarde’s speech at the European Parliament’s Committee on Economic and Monetary Affairs meeting in Brussels. The ECB is expected to raise rates at least once more before the year’s end, with this week’s release of the region’s manufacturing and services Purchasing Managers’ Index providing further economic insights.
Amid political developments, Trump remarked that British Premier Keir Starmer may resign due to perceived failures in immigration and energy policies. In Asia, a positive trend emerged, except in Hong Kong, with semiconductor gains highlighted by South Korea’s SK Hynix shares rising by 3.9%, pushing its market cap to $1.3 trillion. Near the close, Japan’s Nikkei 225 rose by 1.9%, South Korea’s Kospi Index by 0.5%, and China’s Shanghai Composite Index by 0.8%, while Hong Kong’s Hang Seng Index fell by 0.7%.