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What is the story about?
Asian shares gained on Monday as South Korean equities surged over 4%, even as US equity index futures declined and oil prices were up after US President Donald Trump rejected Tehran's response to his recent proposal to end the war.
Contracts for the S&P 500 declined 0.2%. Brent crude was up 3.5% above $104 a barrel.
The dollar climbed against major peers, with the pound among the laggards as UK Prime Minister Keir Starmer came under pressure to step aside after poor local election results. Gold declined.
The mutual rejection of peace proposals weighed on risk sentiment after global equities had rallied to record highs, driven in part by a revival in the artificial intelligence trade. The relatively modest moves on Monday suggest traders are still pricing in an eventual de-escalation, though the path remains uneven, with headline risk likely to drive bouts of volatility.
Iran offered to transfer some of its stockpile of highly enriched uranium to a third country in its response to an earlier US proposal to end 10 weeks of war, but rejected the idea of dismantling its nuclear facilities, the Wall Street Journal reported. Iran disputed the report, according to its semi-official news agency Tasnim. Trump called the Iranian response “TOTALLY UNACCEPTABLE”.
Across markets, the success of the momentum strategy — piling into recent winners, effectively — has become a defining feature. Junk bonds and crypto have also been drawn in.
Beyond the war, traders have a lot to parse this week with the scheduled meeting between Trump and Chinese President Xi Jinping and US inflation data, which will offer clues on where interest rates are headed.
In currencies, the pound weakened ahead of a speech by UK Prime Minister Keir Starmer to forestall an immediate challenge to his job. Starmer will lay out a plan to turn the governing party’s fortunes around, including a commitment to take the UK closer to the European Union a decade after the Brexit vote.
Meanwhile, fresh data on consumer prices in the coming week is likely to affirm inflation remains a threat in the US. Economists see a sharp 0.6% increase in the consumer price index for April, based on the Bloomberg survey median estimate. That’s after March’s biggest monthly advance since 2022. The Bureau of Labor Statistics’ report is due Tuesday.
In Friday’s report, April’s nonfarm payrolls rose 115,000 after an even bigger surge in March, marking the strongest two-month increase since 2024, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.3%.
Still, the Federal Reserve is viewed as likely to remain on hold for now to allow the oil price spike to play itself out. Money market pricing continued to suggest the Fed will keep rates steady this year.
With inputs from Bloomberg
Contracts for the S&P 500 declined 0.2%. Brent crude was up 3.5% above $104 a barrel.
The dollar climbed against major peers, with the pound among the laggards as UK Prime Minister Keir Starmer came under pressure to step aside after poor local election results. Gold declined.
The mutual rejection of peace proposals weighed on risk sentiment after global equities had rallied to record highs, driven in part by a revival in the artificial intelligence trade. The relatively modest moves on Monday suggest traders are still pricing in an eventual de-escalation, though the path remains uneven, with headline risk likely to drive bouts of volatility.
Iran offered to transfer some of its stockpile of highly enriched uranium to a third country in its response to an earlier US proposal to end 10 weeks of war, but rejected the idea of dismantling its nuclear facilities, the Wall Street Journal reported. Iran disputed the report, according to its semi-official news agency Tasnim. Trump called the Iranian response “TOTALLY UNACCEPTABLE”.
Across markets, the success of the momentum strategy — piling into recent winners, effectively — has become a defining feature. Junk bonds and crypto have also been drawn in.
Beyond the war, traders have a lot to parse this week with the scheduled meeting between Trump and Chinese President Xi Jinping and US inflation data, which will offer clues on where interest rates are headed.
In currencies, the pound weakened ahead of a speech by UK Prime Minister Keir Starmer to forestall an immediate challenge to his job. Starmer will lay out a plan to turn the governing party’s fortunes around, including a commitment to take the UK closer to the European Union a decade after the Brexit vote.
Meanwhile, fresh data on consumer prices in the coming week is likely to affirm inflation remains a threat in the US. Economists see a sharp 0.6% increase in the consumer price index for April, based on the Bloomberg survey median estimate. That’s after March’s biggest monthly advance since 2022. The Bureau of Labor Statistics’ report is due Tuesday.
In Friday’s report, April’s nonfarm payrolls rose 115,000 after an even bigger surge in March, marking the strongest two-month increase since 2024, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.3%.
Still, the Federal Reserve is viewed as likely to remain on hold for now to allow the oil price spike to play itself out. Money market pricing continued to suggest the Fed will keep rates steady this year.
With inputs from Bloomberg
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