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Observer
2 hours ago
- Business
- Observer
Oil dives, stocks rally after Trump Middle East pause
Stock markets ticked higher on Friday while oil headed for its biggest daily drop since April after President Donald Trump pushed back a decision on US military involvement in the Israel-Iran conflict. Rising risks from the Middle East have loomed large on the world's top indexes again this week. Europe's main bourses were all between 0.5 per cent-1.4 per cent higher after similar gains across Asia, although it was touch and go whether it would be enough to prevent a second straight weekly loss for MSCI's main world index. Israel bombed targets in Iran, and Iran fired missiles at Israel overnight as the week-old war continued but Friday's market moves, which also included a modest drop in the dollar, showed an element of relief. That was largely pinned on Thursday's statement from the White House that Trump will decide in the next two weeks - rather than right away - whether the US will get involved in the war. European foreign ministers were meeting their Iranian counterpart in Geneva on Friday, seeking a path back to diplomacy over its contested nuclear programme. The relief the US wasn't charging into the conflict sent oil prices down as low as $76.10 per barrel, although they are still up 4 per cent for the week and 20 per cent for the month. "Brent crude is down 2.5 per cent today in the clearest sign that fears over an imminent escalation in the Israel/Iran conflict have eased," MUFG strategist Derek Halpenny said. Gold, another traditional safe-haven play for traders, was also lower on the day and Nasdaq, S&P 500, and Dow futures had all moved into the green as Wall Street prepared to get going again having been closed on Thursday. Asian shares had gained 0.5 per cent overnight thanks to a 1.2 per cent jump in Hong Kong's Hang Seng and as newly elected President Lee Jae Myung's stimulus plans saw South Korea's Kospi top 3,000 points for the first time since early 2022. China's central bank held its benchmark lending rates steady as widely expected in Beijing, while data from Japan showed core inflation there hit a two-year high in May, keeping pressure on the Bank of Japan to resume interest rate hikes. The dollar was ending an otherwise positive week on a modest downer, with the euro up 0.3 per cent against the US currency at $1.1527 and the pound 0.2 per cent higher at $1.3494. The US bond market, which was also closed on Thursday, resumed trading with the key 10-year Treasury bond yield flat at 4.39 per cent, while German 10-year yields, which serve as Europe's borrowing benchmark rate, fell 2.5 basis points to 2.49 per cent. Gold prices eased 0.8 per cent to $3,345 an ounce, leaving them set for a weekly loss of 2.5 per cent. But the main commodity market focus remained oil. Brent crude futures were last down $2.45, or around 3 per cent, at $76.43 a barrel in London although they were still on track to end the week almost 3 per cent higher. PVM analyst John Evans said oil producers' "nightmare scenario" was that Iran or its proxies could block the Strait of Hormuz, something which has never happened and through which 20 million barrels are shipped each day. JP Morgan estimates that amounts to about 20 per cent of all global oil trade and 30 per cent of seaborne oil trade. "The market is currently assigning a probability below 20 per cent to this happening," JP Morgan's Francesco Arcangeli wrote in a note, estimating thought that a full closure of the Strait could see oil prices surge to $120-$130 a barrel. — Reuters
Time of India
11 hours ago
- Business
- Time of India
Oil tumbles, stocks rebound after Trump Middle east pause
Stock markets ticked higher on Friday while oil skirted close to its biggest daily drop since April after President Donald Trump pushed back a decision on US military involvement in the Israel-Iran conflict. Rising risks from the Middle East have loomed large on the world's top indexes again this week. Europe's main bourses all rose between 0.5 per cent-1 per cent after similar gains across Asia, although it was touch and go whether it would be enough to prevent a second straight weekly loss for MSCI's main world index. Israel bombed targets in Iran, and Iran fired missiles at Israel overnight as the week-old war continued although Friday's markets moves, which also included a modest drop in the dollar, showed an element of relief. That was largely pinned on Thursday's statement from the White House that Trump will decide in the next two weeks - rather than right away - whether the US will get involved in the war. European foreign ministers were to meet their Iranian counterpart in Geneva on Friday, seeking a path back to diplomacy over its contested nuclear programme. The relief the US wasn't charging into the conflict sent oil prices down as low as $76.10 per barrel, although they were last at just over $77 and still up 4 per cent for the week and 20 per cent for the month. " Brent crude is down 2.5 per cent today in the clearest sign that fears over an imminent escalation in the Israel/Iran conflict have eased," MUFG strategist Derek Halpenny said. Gold, another traditional safe-haven play for traders, was also lower on the day although Nasdaq, S&P 500 , and Dow futures were all in the red after US markets had been closed on Thursday. Asian shares had gained 0.5 per cent overnight thanks to a 1.2 per cent jump in Hong Kong's Hang Seng and as newly elected President Lee Jae Myung's stimulus plans saw South Korea's Kospi top 3,000 points for the first time since early 2022. China's central bank held its benchmark lending rates steady as widely expected in Beijing, while data from Japan showed core inflation there hit a two-year high in May, keeping pressure on the Bank of Japan to resume interest rate hikes. That in turn lifted the yen and pushed down the export-heavy Nikkei in Tokyo. Oil retreats The dollar was ending an otherwise positive week lower on the day, with the euro up 0.3 per cent against the US currency at $1.1527 and the pound 0.2 per cent higher at $1.3494. The US bond market, which was also closed on Thursday, resumed trading with the key 10-year Treasury bond yield flat at 4.39 per cent, while German 10-year yields , which serve as Europe's borrowing benchmark rate, fell 2.5 basis points to 2.49 per cent. Gold prices eased 0.5 per cent to $3,354 an ounce, but were set for a weekly loss of 2.3 per cent. But the main commodity market focus remained oil. Brent crude futures were last down $1.60, or around 2.2 per cent, at $77.28 a barrel in London although they were still on track to end the week 4 per cent higher. PVM analyst John Evans said the big market risk of the Middle East troubles was "unintended action that escalates the conflict and touches upon oil infrastructure". "The world has more than adequate supply for 2025, but not if the nightmare scenario of 20 million (barrels per day) being blocked in the seas of Arabia, however briefly that might be," he said.
Zawya
12 hours ago
- Business
- Zawya
Oil tumbles, stocks rebound after Trump Middle East pause
Stock markets ticked higher on Friday while oil skirted close to its biggest daily drop since April after President Donald Trump pushed back a decision on U.S. military involvement in the Israel-Iran conflict. Rising risks from the Middle East have loomed large on the world's top indexes again this week. Europe's main bourses all rose between 0.5%-1% after similar gains across Asia, although it was touch and go whether it would be enough to prevent a second straight weekly loss for MSCI's main world index. Israel bombed targets in Iran, and Iran fired missiles at Israel overnight as the week-old war continued although Friday's markets moves, which also included a modest drop in the dollar, showed an element of relief. That was largely pinned on Thursday's statement from the White House that Trump will decide in the next two weeks - rather than right away - whether the U.S. will get involved in the war. European foreign ministers were to meet their Iranian counterpart in Geneva on Friday, seeking a path back to diplomacy over its contested nuclear programme. The relief the U.S. wasn't charging into the conflict sent oil prices down as low as $76.10 per barrel, although they were last at just over $77 and still up 4% for the week and 20% for the month. "Brent crude is down 2.5% today in the clearest sign that fears over an imminent escalation in the Israel/Iran conflict have eased," MUFG strategist Derek Halpenny said. Gold, another traditional safe-haven play for traders, was also lower on the day although Nasdaq, S&P 500 , and Dow futures were all in the red after U.S. markets had been closed on Thursday. Asian shares had gained 0.5% overnight thanks to a 1.2% jump in Hong Kong's Hang Seng and as newly elected President Lee Jae Myung's stimulus plans saw South Korea's Kospi top 3,000 points for the first time since early 2022. China's central bank held its benchmark lending rates steady as widely expected in Beijing, while data from Japan showed core inflation there hit a two-year high in May, keeping pressure on the Bank of Japan to resume interest rate hikes. That in turn lifted the yen and pushed down the export-heavy Nikkei in Tokyo. OIL RETREATS The dollar was ending an otherwise positive week lower on the day, with the euro up 0.3% against the U.S. currency at $1.1527 and the pound 0.2% higher at $1.3494. The U.S. bond market, which was also closed on Thursday, resumed trading with the key 10-year Treasury bond yield flat at 4.39%, while German 10-year yields , which serve as Europe's borrowing benchmark rate, fell 2.5 basis points to 2.49%. Gold prices eased 0.5% to $3,354 an ounce, but were set for a weekly loss of 2.3%. But the main commodity market focus remained oil. Brent crude futures were last down $1.60, or around 2.2%, at $77.28 a barrel in London although they were still on track to end the week 4% higher. PVM analyst John Evans said the big market risk of the Middle East troubles was "unintended action that escalates the conflict and touches upon oil infrastructure". "The world has more than adequate supply for 2025, but not if the nightmare scenario of 20 million (barrels per day) being blocked in the seas of Arabia, however briefly that might be," he said. (Additional reporting by Stella Qiu in Sydney Editing by Frances Kerry)
Yahoo
a day ago
- Business
- Yahoo
Mitsubishi UFG Notes Market Implications From Bank of England's Policy Decision
The Bank of England left rates unchanged on Thursday, as expected, sai MUFG. The six-to-three vo Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
VIEW Norway's central bank delivers surprise rate cut
LONDON, June 19 (Reuters) - Norway's central bank cut its policy interest rate, opens new tab by 25 basis points to 4.25% on Thursday, its first reduction of borrowing costs in five years, in a decision that took most analysts by surprise. Norway's crown and government bond yields tumbled. The dollar was up over 1.5% against the Norwegian currency, fetching 10.08 crowns , on track for its biggest daily rise in eight weeks. The euro jumped 0.9% and was trading at 11.56 crowns . Norwegian government bond yields fell as much as 10 basis points after the decision to 3.95%, their lowest since May 12. COMMENTS: LEE HARDMAN, SENIOR CURRENCY ANALYST, MUFG, LONDON: "The timing is surprising, we thought that they would wait a little longer, they hadn't been giving a strong signal that they would cut rates as soon as today, that's why the market has reacted as it has. "Their justification is that underlying inflation is softer than expected creating more room for them to cut rates. "The other part of the messaging is that the overall profile for rate cuts going forward hasn't changed a great deal, just the timing, so from that perspective that could dampen the sell off in the (Norwegian crown) once the dust settles and market participants get over the initial shock." JAN VON GERICH, CHIEF MARKET STRATEGIST, NORDEA, HELSINKI: "This was not something was expected by analysts but given an uncertain outlook you shouldn't exclude any outcomes. "Given that this was surprise, the move could have been bigger in the crown. "They are (Norges Bank) talking about normalisation, so today's move suggests that this process is happening faster-than-expected. "The Fed now seems to be the odd one out in global central banks." MICHAEL BROWN, SENIOR RESEARCH STRATEGIST, PEPPERSTONE, LONDON: "It was clearly a surprise, the Norges Bank was the last hold out when it comes to hawkishness among G10 central banks. "They hadn't actually pencilled a rate cut until the Autumn so I think it may just be a sign that they're shifting to a more proactive approach. "And given all the uncertainty that we see, they're probably in quite a luxurious position where they feel if they deliver a cut now they can perhaps head off some potential weakness that may be coming down the track in the next couple of quarters. "It's really a nod to a more proactive Norges Bank from here on out." KENNETH BROUX, HEAD OF CORPORATE RESEARCH FX AND RATES, SOCIETE GENERALE, LONDON: "Surprise is the right word, I think the scale of the recent appreciation of the krone (bear down on inflation) gives them a bit more confidence and brings forward today's cut. They lowered the CPI forecast for 2026 by 0.5 percentage points to 2.2% and 2027 by 0.2 percentage points to 2.3%."
