Written by Lei Wee
SINGAPORE (Reuters) – Gold prices rose on Monday, attracting bids for some safe-haven assets, while oil prices were volatile following last weekend's retaliatory attacks on Israel by Iran and the broader region Concerns about the escalation of the conflict have grown, and traders are nervous about what will happen next.
U.S. stock futures rose after major indexes ended sharply lower on Friday due to unimpressive results from major U.S. banks. (.N)
Iran late Saturday launched explosive drones and missiles at Israel in retaliation for an alleged Israeli attack on its consulate in Syria on April 1, marking its first direct attack on Israeli territory. became.
The region is on edge as US President Joe Biden warns Prime Minister Benjamin Netanyahu that the US will not take part in a counterattack against Iran, with threats of open war erupting between the region's arch-rivals and dragging the US into it. It is in.
„The operation is not over yet,“ Israel said.
Asian markets struggled for direction early Monday after the weekend's developments in the Middle East, as oil prices fell sharply in volatile trading, gold soared and the dollar largely steadied. (FRX/)
Brent crude oil futures fell 0.25% to $90.21 per barrel, and US West Texas Intermediate crude oil futures fell 0.35% to $85.36 per barrel. (or)
Gold rose 0.7% to $2,359.92 an ounce after setting a new record of $2,431.29 on Friday. The yellow metal is up about 14% so far this year. (Gol/)
„Everything seems to be pretty well contained,“ said Chris Weston, head of research at Pepperstone. „From a very simplistic perspective, Iran's actions don't really surprise anyone and are very much in line with the amounts we were expecting late last week.
“What may be driving the slight increase in gold prices…is the idea that we could see a new counterattack from Israel, and if that happens…that would reduce the risk (asset). may decline.”
Elsewhere, 10-year U.S. Treasury futures fell slightly, with an implied yield of 4.53%, while the dollar remained near a 34-year high at $153.27 against the yen.
The euro and pound were similarly locked near five-month lows. (FRX/)
Continued resilient U.S. economic data, especially last week's stronger-than-expected inflation report, weighed investors on the Fed's pace of interest rate cuts this year as inflation turns out to be more robust than previously thought. and began resetting expectations about scale.
Futures markets currently predict about 50 basis points (bp) of easing this year, a significant drop from the 160 basis points expected at the beginning of the year.
This major change in the outlook for interest rates sent the dollar sharply lower and U.S. Treasury yields soared, with two-year yields exceeding 5% last week for the first time since November. (we/)
„We have updated our forecasts for the US FOMC, pushing back the start of the rate cut cycle from the previous July date to September 2024,“ Commonwealth Bank of Australia senior economist Christina Clifton said.
“For the first three months of 2024, U.S. CPI was stronger than expected. It takes less than 0.2% per month for interest rates to rise, as the Fed is confident that inflation can remain sustainably low. We expect that a series of inflationary outcomes will be required, but there is no need to remain at a restrictive level. ”
A number of Fed policymakers are scheduled to speak this week, including Chairman Jerome Powell, who could provide further clarity on the future direction of U.S. interest rates.
On the stock market, S&P 500 futures and Nasdaq futures each rose 0.3% in early Asian trading, reversing some of Friday's steep decline in U.S. stocks.
All three major indexes fell this week, weighed down by weak bank profits and rising expectations for Fed policy.
„At the end of the day, what we're seeing at the moment is that the market is really trying to understand what's going on. Their perception of price risk in this market is getting a little harder. Without that visibility, you have high volatility. That's where we are,“ Pepperstone's Weston said.
Bitcoin was last down more than 2% at $65,547 after falling below $62,000 on Sunday. The world's largest cryptocurrency hit a record high last month thanks to inflows into new spot Bitcoin exchange-traded funds and hopes that a Fed rate cut is imminent. (FTX/)
(Editing by Lincoln Feast.)