Oil Rises Ahead of Iran Deadline, Markets Remain Volatile
Oil prices rose in volatile trading, while equity sentiment weakened ahead of US President Donald Trump's deadline for Iran to reach a peace deal. Tentative signals of a ceasefire helped ease concerns for a while, but the risk of escalation again kept market participants from taking aggressive positions.
Brent rose 1.6% to trade above US$111 per barrel, after swinging between gains and losses ahead of Tuesday's 8:00 p.m. ET deadline. Meanwhile, the US dollar strengthened 0.1%, reinforcing its position as a sought-after hedge against the Iran war.
Global stock markets fluctuated after briefly rising on Monday on hopes of a ceasefire. However, uncertainty surrounding the conflict kept investors on the sidelines, with US stock index futures down 0.5%. In Asia, stock indexes pared early gains and ended up 0.3%, led by the technology sector, which is considered less exposed to the conflict, which is entering its sixth week.
Investors' focus remains on the Strait of Hormuz, a strategic waterway for Middle East oil flows. Trump has emphasized that freedom of navigation must be part of any deal and has reiterated the threat of attacks on Iranian infrastructure if US conditions are not met. This environment makes the market prone to turning on headlines, as the risk of supply disruptions and policy responses are key variables.
Caution is also evident in the foreign exchange market. JPMorgan's one-month volatility gauge for G-10 currencies rose to 7.98%, remaining within its recent range but reflecting heightened caution ahead of the deadline. Some analysts believe the market will remain highly sensitive to developments in the Middle East, with bias shifting rapidly with news flow.
In other assets, gold fluctuated around US$4,650 per ounce, while the 10-year US Treasury yield rose two basis points to 4.35%, and Bitcoin fell more than 1.5% to around US$68,700. Beyond geopolitics, the market is also awaiting the release of inflation data this week, after Monday's data showed the US services sector slowed in March, accompanied by a decline in employment and rising input prices.
5 Key Points:
- Brent rose 1.6% above US$111/barrel ahead of Trump's Tuesday 8:00 PM ET deadline.
- The US dollar strengthened 0.1% as a key safe haven amid war uncertainty.
- Equity sentiment weakened: US futures fell 0.5%, Asian stocks rose only 0.3% after paring gains.
- Markets focused on the Strait of Hormuz and the risk of supply disruptions; Trump emphasized that free navigation must be included in the deal.
- Volatility across assets remained high: gold around US$4,650, US 10Y 4.35%, Bitcoin fell to US$68,700. (asd)
Source: Newsmaker.id
