MARKET WRAPS
Stocks:
European shares were mostly lower Monday as investors awaited the outcome of Iran-Oman talks to restore shipping through the Strait of Hormuz.
Iran said it was close to a deal with Oman to open the Strait of Hormuz, though a senior official issued several demands to the U.S., including a troop withdrawal and an end to military action against Iran-aligned militias.
Oil prices remained broadly unchanged, keeping the prospect of the European Central Bank raising interest rates again.
"The risk of renewed Middle East escalation remains elevated, but the muted price response highlights competing headwinds from weak Chinese demand and the release of emergency reserves," Saxo Bank said.
Looking ahead, the week's highlight will likely be the second estimate of eurozone GDP data for the second quarter on Friday, which will provide insight into the growth impact of the Middle East war.
U.S. Markets:
Stock futures were mostly higher with U.S. inflation data for July in focus this week after recent weak jobs data brought the need for an interest-rate rise by the Federal Reserve in the coming months into question.
Forex:
The euro traded flat, but it could rise above $1.16 if Wednesday's U.S. inflation data are lower than expected, ING said.
The dollar recovered slightly after reaching a seven-week low Friday following an unexpected decline in U.S. nonfarm payrolls.
Bonds:
Yields on eurozone government bonds rose slightly amid uncertainty over U.S.-Iran negotiations to reopen the Strait of Hormuz.
Treasury yields remained flat after Friday's nonfarm payrolls data came in well below expectations, dampening prospects of the Fed raising interest rates in September.
Energy:
In early European trading, Brent crude was up 0.2%, while WTI futures rose 0.1%.
Global oil inventory buffers are continuing to erode, said ANZ. Product inventories continue to fall sharply, led by gasoline and middle distillates. Further inventory declines are evident across Asia, the Middle East and Singapore.
Metals:
Gold prices held above the $4,400-a-troy-ounce mark after booking their best weekly performance since January, as investors awaited key U.S. inflation data for more cues on the Fed's policy path.
Gold chart
Comex gold futures were seeking to rise beyond resistance at $4,400 an ounce, RHB Retail Research said. The futures closed Friday with a long bullish candlestick pattern on the daily chart.
Iron ore
Iron ore futures prices across different deliveries were mostly lower in early trade. While China's iron ore supply remains ample, steel demand has been weak as the country's official manufacturing PMI contracted from the preceding month, Galaxy Futures said.
EMEA HEADLINES
London Needs Capital to Revive its Struggling Public Markets, LSE's Deputy CEO Says
Better access to capital is key to the London Stock Exchange reestablishing its reputation as a world leader, the exchange's deputy chief executive said.
The LSE's Charlie Walker said a collective effort across regulators, government and U.K. companies is working to revive London's fortunes, but capital is the missing piece.
Israel Rejects Next Phase of Trump's Gaza Peace Plan
Israeli Prime Minister Benjamin Netanyahu rejected President Trump's plan to establish permanent peace in Gaza, a rare public break with the U.S. leader, who just weeks ago hailed "a historic agreement" to disarm Hamas.
The plan calls for the militant group to lay down arms in tandem with the gradual withdrawal of Israeli troops from the enclave, which the Israeli leader said Sunday couldn't happen until Hamas was fully disarmed.
U.A.E.'s Adnoc Gas to Invest More Than $8 Billion in Expansion Push
The United Arab Emirates' Adnoc Gas said it would invest over $8 billion to grow its production capacity, just months after the country's departure from the Organization of the Petroleum Exporting Countries. The exit freed Abu Dhabi from the cartel's quota restrictions.
Majority owned by state-run Abu Dhabi National Oil Company, Adnoc Gas is already one of the world's largest producers of natural gas but it is betting on a substantial growth program to meet rising gas demand, fueled by population growth and power hungry data centers.
Trump Thought Opening the Strait of Hormuz Was Imminent. Iran Had Other Plans.
WASHINGTON-For weeks, President Trump had been laying the groundwork to declare victory in the Iran war should Tehran fully reopen the Strait of Hormuz, even floating the idea privately to senior aides that he's willing to walk away without a nuclear deal, U.S. officials said.
But that scaled-back objective became more difficult when Iran insisted Saturday on its highest price yet for permitting the free flow of traffic in the waterway, seeking billions of dollars in U.S. payments, the removal of American troops from the region and an end of the U.S. naval blockade, among other things.
GLOBAL NEWS
Private Credit Is Under Growing Strain, Despite Industry's Upbeat Tone
Private credit is showing increasing signs of stress, despite comments to the contrary from some of the largest fund managers that are trying to put a year of turmoil behind them.
Recent quarterly reports from funds overseen by the industry's big players showed that loan health and investor returns are worsening, according to an analysis by The Wall Street Journal.
The number of stocks beating the S&P 500 is the highest in 4 years. Why that number should rise.
A deeper look into the stock market's rally to record highs shows that the market of stocks is doing a lot better than it looks on the surface. And there's good reason to believe that will not only continue, but the outperformance should also increase.
There was a concern earlier this year that the market's rally was too narrow, as it was being driven by the shares of a small number of mega-capitalization technology companies at the center of the artificial-intelligence buildout. But that has changed. Basically, the more stocks that are participating in the rally, the merrier.
Blockbuster Earnings Bolster Stocks' Record Run
Strong earnings reports from the U.S.'s largest companies are powering major indexes to new highs, easing some concerns that the recent rally is overly dependent on a handful of artificial-intelligence stocks.
Some concerns.
Trump Thought Opening the Strait of Hormuz Was Imminent. Iran Had Other Plans.
WASHINGTON-For weeks, President Trump had been laying the groundwork to declare victory in the Iran war should Tehran fully reopen the Strait of Hormuz, even floating the idea privately to senior aides that he's willing to walk away without a nuclear deal, U.S. officials said.
But that scaled-back objective became more difficult when Iran insisted Saturday on its highest price yet for permitting the free flow of traffic in the waterway, seeking billions of dollars in U.S. payments, the removal of American troops from the region and an end of the U.S. naval blockade, among other things.
In China, 'Moles' Are Leaking Official Secrets for Profit
Secrets from Chinese leader Xi Jinping's disciplinary purges keep surfacing online, defying a crackdown that has ensnared millions of people-and highlighting how deeply embedded graft and disloyalty remain within the Communist Party.
With the party detaining tens of thousands of officials each year, an underground market for corruption gossip has emerged on Chinese social media, where shadowy users drop hints on who's getting purged next-in return for fees and clicks, state media said.
The Republican Party Is Losing Its Edge With Voters on the Economy
Mitchell Brown, a Republican pollster, has noticed something new in the focus groups he runs with voters in battleground states: "They know exactly, to the dollar, the amount of their power bill," he said. The same, he says, happens with health costs, or the price of beef.
To Brown, it is a sign that views of the economy pose a clear danger for his party in this year's midterms, a concern echoed by other Republican strategists. With voters' negative impressions now hardening, some Republican and independent analysts say President Trump and his GOP allies have little time to regain a key asset: their image as the party better suited to handle the economy.
Israel Rejects Next Phase of Trump's Gaza Peace Plan
Israeli Prime Minister Benjamin Netanyahu rejected President Trump's plan to establish permanent peace in Gaza, a rare public break with the U.S. leader, who just weeks ago hailed "a historic agreement" to disarm Hamas.
The plan calls for the militant group to lay down arms in tandem with the gradual withdrawal of Israeli troops from the enclave, which the Israeli leader said Sunday couldn't happen until Hamas was fully disarmed.
Write to priscila.barrera@wsj.com
