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Oil jumps as Asia shrugs off Iran tensions

Brent crude climbed at the start of the week as renewed tensions in the Middle East, including the collapse of US‑Iran peace talks and reports of ship boardings near the Strait of Hormuz, kept geopolitical risk premia elevated in energy markets. Despite the rise in oil, Asian equity markets were trading mostly higher on Monday, with Japan’s Nikkei 225 and South Korea’s Kospi both reaching record highs, while US indices had already ended Friday on fresh peaks for the tech‑heavy Nasdaq 100 and the broad S&P 500 amid strong gains in semiconductor stocks. Looking ahead, markets are turning their attention from geopolitics to a packed central bank and data calendar, with policy decisions by the Bank of Japan, Federal Reserve, Bank of Canada, Bank of England and European Central Bank as well as key earnings data from Mag 7 tech companies this week.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Strategist Middle East

Brent crude futures rose nearly 2% to USD 101 per barrel and US crude climbed to USD 96 on Monday after a planned second round of peace talks between the US and Iran collapsed over the weekend. US President Donald Trump cancelled a trip by envoy Steve Witkoff and Jared Kushner to Islamabad on Saturday, arguing on social media that negotiations were not worthwhile amid infighting within Iran’s leadership. Market tensions were further heightened by reports that Iran’s Revolutionary Guard had boarded two cargo vessels near the Strait of Hormuz, a crucial shipping route for global oil supplies. Gold prices were little changed, trading around USD 4710 per ounce, while silver was hovering near USD 75.74. US Treasury yields were edging higher across the curve, with the two-year yield around 3.8% and the ten-year yield near 4.3%, the US Dollar Index was essentially unchanged, while bitcoin was trading slightly lower around USD 77,700.

Central banks, tech earnings in focus

Looking beyond geopolitics, monetary policy takes centre stage this week with interest rate decisions from the Bank of Japan on Tuesday, the Federal Reserve and the Bank of Canada on Wednesday, and the Bank of England and the European Central Bank on Thursday, giving investors a broad update on how major central banks are responding to recent inflation and growth trends. In terms of macroeconomic data, attention in the United States focuses on first-quarter gross domestic product on Thursday and the Institute for Supply Management's Manufacturing Purchasing Managers' Index (PMI) on Friday, which together offer an updated picture of the growth trajectory in the world's largest economy. In Europe, first-quarter growth and April inflation data from Germany, France and the wider euro area on Wednesday and Thursday will be closely watched for signs that the region is emerging from its soft patch. China’s official PMIs on Thursday give an important read on the health of the world’s second-largest economy and the global manufacturing cycle. Markets across much of Europe are closed on Friday, while China is also shut for the Labor Day holiday. On the corporate side, this week’s earnings calendar is headlined by US mega-cap tech (Alphabet, Microsoft, Amazon and Meta) on Wednesday.

Japan and South Korea equities hit records

Asian equity markets traded mostly higher on Monday as investors looked past the latest breakdown in US‑Iran peace efforts, with Japan’s Nikkei 225 advancing 1.5% and South Korea’s Kospi climbing 2% to fresh record highs. Australia’s S&P/ASX 200 slipped 0.3%, while Hong Kong’s Hang Seng index edged down 0.3% and China’s CSI 300 was essentially flat after Chinese industrial profits increased 15.8% year-on-year in March, up from 15.2% growth in the first two months of the year.

US tech rally lifts Nasdaq and S&P 500

US equities saw the technology-heavy Nasdaq 100 jump 1.9% to a fresh record close on Friday, while the broad S&P 500 also set a new high with a gain of 0.8%, as enthusiasm around artificial intelligence boosted semiconductor stocks. Processor maker Intel surged more than 23% after quarterly figures and guidance impressed investors, helping drive a 2.4% weekly advance in the Nasdaq 100, while rival chip names including Qualcomm, AMD and ARM also recorded double‑digit percentage increases. The Dow Jones Industrial Average lagged, slipping 0.2% on the day and losing 0.4% over the week, as weakness in names such as Nvidia offset a 1.7% rise in consumer goods group Procter & Gamble following better‑than‑expected quarterly results.

German business climate falls sharply

Sentiment among German companies deteriorated markedly in April, when the ifo Business Climate Index fell to 84.4 points from 86.3 in March, reaching its weakest level since May 2020 amid pressure from the Iran crisis. Firms reported a worse assessment of their current situation and became significantly more downbeat about the next six months. The downturn was broad-based, with manufacturing hit by gloomier expectations, especially in the chemical industry, services weighed down by a stressed logistics sector, and trade suffering as retailers fear more cautious consumers due to rising inflation. uropean stock markets ended lower on Friday, with the Euro Stoxx 50 dipping 0.2% as investors pared risk ahead of the weekend against a backdrop of geopolitical tensions. Germany’s DAX edged down 0.1%, France’s CAC 40 lost 0.8% and the Swiss Market Index fell 0.6%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Verizon.

Economic data in focus: Germany’s GfK Consumer Climate (09:00) and Dallas Fed Manufacturing Index (16:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.