On Monday, despite recent U.S. military strikes on targets on Khark Island, navigation signals emerged in the Strait of Hormuz, and former U.S. President Donald Trump indicated negotiations with Iran were ongoing. Crude oil futures opened higher but later turned lower, while U.S. stock futures and Asian equity markets advanced.
According to reports, on Friday evening Eastern Time, former President Trump stated on social media that the U.S. military had launched "strong airstrikes" against military targets on Khark Island, a key Iranian oil export hub. On Saturday, two liquefied petroleum gas tankers flying the Indian flag and belonging to an Indian shipping company successfully transited the Strait of Hormuz.
In a telephone interview with a U.S. broadcaster on Saturday, Trump mentioned that Iran was prepared to negotiate a ceasefire, but he was not yet ready to agree to a deal, stating that "the terms are not good enough."
Regarding market movements, W&T Offshore futures fell by over $1 to $97.63 per barrel, after having risen more than 3% earlier in the session. Brent crude oil also retreated to around $103 per barrel after an initial surge at the open.
Asian stock markets climbed, with the MSCI Asia Pacific Index moving higher. South Korea's Seoul Composite Index saw its intraday gain widen to 1.4% at one point.
S&P 500 and Nasdaq 100 index futures rose nearly 0.5%, following three consecutive weeks of declines for the S&P 500 index.
U.S. government bonds have erased their gains for the year. The yield on the 10-year Treasury note, which jumped more than 30 basis points in March, recently dipped slightly to 4.26%. Meanwhile, the 2-year yield reached its highest level since last September.
Since the outbreak of conflict, Brent crude has accumulated a 40% increase, while global equities have fallen over 5%. U.S. Treasuries have given back all their gains for the year, with market stress indicators approaching peak levels seen during the tariff shocks of last April. The International Energy Agency has stated it will immediately release strategic reserves to Asia to alleviate supply disruption pressures from the Middle East.
Inflation risks will be a central theme for markets this week. Eight out of the world's ten major central banks are scheduled to announce interest rate decisions, requiring policymakers to assess their monetary paths amid ongoing geopolitical uncertainties.
Updates to follow.
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