Stocks, dollar stay calm in Asia as oil rises
Asian markets have kept their nerve and oil prices have climbed anew as the conflict between Israel and Iran shows no sign of cooling, adding geopolitical uncertainty to the world's economic troubles in a week packed with central bank meetings.
The escalation came just as Group of Seven leaders were gathering in Canada with US President Donald Trump's tariffs already straining ties.
Yet there was no sign of panic among investors with currency markets calm and Wall Street stock futures steadying after an early dip.
Oil did add two per cent to last week's 13 per cent surge in an inflationary pulse that, if sustained, should make the Federal Reserve even less likely to cut interest rates when it meets on Wednesday.
Futures imply almost no chance of a reduction in the 4.25 per cent to 4.5 per cent rate band, and scant prospect of a move in July either. Markets will be particularly sensitive to any change in the Fed's "dot plot" path for rates.
"The Committee will release a new set of economic forecasts, and we expect that the interest rate forecast 'dots', which last showed a median expectation of two cuts this year, will instead look for only one cut this year," said Michael Feroli, head of US economics at JPMorgan.
Markets are still wagering on two easings by December, with a first move in September seen as most likely.
Data on US retail sales on Tuesday will also be a hurdle, as a pullback in autos could drag the headline down even as core sales edge higher. A market holiday in Thursday, means weekly jobless claims figures are out on Wednesday.
For now, investors were waiting on developments and MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent.
Japan's Nikkei firmed 0.8 per cent on Monday and South Korean stocks added 0.5 per cent. S&P 500 futures rose 0.1 per cent and Nasdaq futures gained 0.2 per cent.
European markets were more pressured by the region's reliance on oil imports and EUROSTOXX 50 futures slipped 0.1 per cent, while DAX futures lost 0.2 per cent. FTSE futures were flat.
Yields on 10-year Treasuries nudged up one basis point to 4.42 per cent, showing little sign of safe haven demand.
In currency markets, the dollar firmed 0.3 per cent on the Japanese yen to 144.49, while the euro dipped 0.1 per cent to $1.1537.
The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is a net exporter.
Currencies from oil exporters Norway and Canada both benefited, with the Norwegian crown hitting its highest since early 2023.
Central banks in Norway and Sweden meet this week, with the latter thought likely to trim rates.
The Swiss National Bank meets on Thursday and is considered certain to cut by at least a quarter point to take rates to zero, with some chance it may go negative given the strength of the Swiss franc.
The Bank of Japan holds a policy meeting on Tuesday and is widely expected to hold rates at 0.5 per cent, while leaving open the possibility of tightening later in the year.
There is also speculation it could consider slowing the rundown of its government bond holdings from next fiscal year.
In commodity markets, gold was getting the safe-haven bid from Mid-East tensions and rose 0.5 per cent to $US3,450 ($A5,309) an ounce.
Oil prices were underpinned by fears the Israeli-Iran conflict could spread and disrupt exports from the region, particularly through the vital Strait of Hormuz.
Brent climbed $US1.11 ($A1.71) to $US75.34 ($A115.94) a barrel, while US crude rose $US1.05 ($A1.62) to $US74.03 ($A113.93) per barrel.
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SBS Australia
an hour ago
- SBS Australia
World leaders arrive in Canada for the G7 summit
Listen to Australian and world news, and follow trending topics with SBS News Podcasts . As world leaders descend on Calgary, Canada, for the G7 summit, Israel's war with Iran will likely top the agenda. Donald Trump departed the U-S on Sunday - holding true to a message that's becoming familiar. "Well I hope there's gonna be a deal. Sometimes they have to fight it out, but we're gonna see what happens." The US President has travelled north to a country he's repeatedly said he wants to make part of the United States. His counterpart in the host nation, Canadian P-M Mark Carney, was helped to power by his defiant stance against US tariffs, and he's been looking to strengthen alliances in uncertain times. He welcomed Australian Prime Minister Anthony Albanese upon his arrival in Canada. "Welcome, and thank you for coming for the G7. Canada and Australia, of course, great partners that share the same values, share many of the same interests." Anthony Albanese says they discussed defence, critical minerals, and collaborating to combat bushfires, as well as conflict in the Middle East. "We did discuss Israel and Iran. And both of us share a view, wanting to see a de-escalation of conflict, wanting to prioritise and diplomacy. I have expressed before our concern about Iran gaining the capacity of nuclear weapons as something that is a threat to security in the region." It was one of many meetings scheduled for the coming days, as Mr Albanese makes the most of his chance to advance Australia's interest on the world stage. The G7 consists of major economies, including France, Germany, Italy, Japan, the United Kingdom, and the U-S, but features several guest nations this year. Anthony Albanese's biggest test will come on Tuesday - Canadian time - when he sits down with Donald Trump for their first face-to-face meeting. "I look forward to the discussions with President Trump, I deal with people constructively, respectfully and I advance Australia's national interest, and that is what I'll continue to do." Mr Albanese has had no shortage of advice about how to deal with the president. His advisors include former prime ministers with firsthand experience, who maintain the only successful approach is to stand up to the president's hardball negotiations. US tariffs have been a key issue leading into the talks. "Now our position when it comes to tariffs is very clear. We see tariffs as acts of economic self harm by the country imposing the tariffs, because what it does is lead to increased costs for the country that is making those decisions." Ahead of the G7 summit, European Commission President Ursula von der Leyen says she is hoping to find a solution to U-S trade tensions before a pause on tariffs expires next month. "We are also working on lowering the trade barriers. This was the reason why we offered 'zero-for-zero', so zero tariffs for all industrial goods on both sides. This should be over time the goal. But we are amidst the negotiations right now." There are fears the AUKUS defence pact could be up for some re-negotiation as well, after it was placed under review by the Trump administration. Mr Albanese is under pressure to re-state Australia's case for the acquisition of nuclear-powered submarines, starting from 2032. "On AUKUS, it is very much in the interests of all three countries. What AUKUS offers the US is firstly the support that we're providing for their industrial capacity." Australia has already invested $800 million to support submarine building in the U-S, as production lags far behind key American targets. "And secondly, the increased capacity to have their subs in the water as well, because of the maintenance facilities that will take place at Henderson. In addition to that, there's all of the support that we give to the United States, and with our defence relationships, including fuel reserves in the Northern Territory; including the presence of US forces in in Darwin, as well." SBS News also asked Anthony Albanese whether he will raise the impact of Israel's conflict with Iran on the humanitarian crisis in Gaza when he speaks with Donald Trump. ANNA: "While these strikes are unfolding, there is no more aid getting into Gaza. So when you meet with the US President Donald trump will you be calling on him to apply pressure to the prime minister of Israel to allow aid through?" ALBANESE: "The discussion with President trump will be very much about Australia and the United States and our relations. We've got a few things to talk about."
The Advertiser
an hour ago
- The Advertiser
Shares nudge up, oil dips - Mideast tensions in focus
World shares have nudged up, with oil prices steadier but holding on to most of last week's increase, as the conflict between Israel and Iran added further uncertainty to the world's economic troubles in a week packed with central bank meetings. The escalation in the Middle East came just as Group of Seven leaders were gathering in Canada, with US President Donald Trump's tariffs already straining ties. Yet there was no sign of panic among investors on Monday as currency markets stayed calm and Wall Street stock futures firmed after an early dip. Brent was last off 0.5 per cent at $US73.85 ($A113.40) a barrel,, but last week's 13 per cent surge means its inflationary pulse, if sustained, could make the Federal Reserve more nervous about giving too many hints at its Wednesday meeting about interest rate cuts later in the year. Markets are still wagering on two easings by December, with a first move in September seen as most likely. "The key is how much flexibility the Fed thinks it has, we've been pleasantly surprised we've not yet seen in inflationary pass-through from the tariffs," said Ben Laidler, head of equity strategy at Bradesco BBI. "The situation in the Middle East is the major issue of the day. The message from the market is that it isn't too afraid, but it does turn what was already going to be a busy week into a frenetic one, and that has a lot of people on the sidelines." Data on US retail sales on Tuesday will also be a hurdle, as a pullback in autos could drag the headline down even as core sales edge higher. A market holiday on Thursday means weekly jobless claims figures are out on Wednesday. For now, investors were waiting on developments and MSCI's all-country world share index gained 0.2 per cent, to sit a touch below last week's record high. Europe's STOXX 600 rose 0.3 per cent and S&P 500 futures rose 0.5 per cent. Earlier in the day, Chinese blue chips added 0.24 per cent, and Hong Kong gained 0.7 per cent as data showed Chinese retail sales rose 6.4 per cent in May to handily top forecasts, while industrial output was in line with expectations. In currency markets, the dollar gave back of some of last Friday's gains against European currencies - the euro was up 0.3 per cent at $US1.1582 ($A1.7785) - and held steady on the Japanese yen at 144.10. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. Currencies from oil exporters Norway and Canada both benefited, with the Norwegian crown hitting its highest since early 2023. "We should expect that economies with a positive energy trade balance should see their currencies benefiting from the shock to oil prices," noted analysts at Deutsche Bank. "It's notable the dollar is in this category, highlighting how the US has moved from a net energy-importer to a net exporter in recent years." Central banks in Norway and Sweden meet this week, with the latter thought likely to trim rates. The Swiss National Bank meets on Thursday and is considered certain to cut by at least a quarter point to take rates to zero, with some chance it may go negative given the strength of the Swiss franc. The Bank of Japan holds a policy meeting on Tuesday and is widely expected to hold rates at 0.5 per cent, while leaving open the possibility of tightening later in the year. There is also speculation it could consider slowing the rundown of its government bond holdings from next fiscal year. Government bond yields nudged higher around the world. The US 10-year Treasury yield was last up 1 bp at 4.44 per cent Germany's 10-year Bund yield was up nearly 3 bps at 2.56 per cent. The calmer mood across markets saw some of gold's safe-haven bid reverse and it was down 0.55 per cent at $US3,413 ($A5,241) an ounce.. World shares have nudged up, with oil prices steadier but holding on to most of last week's increase, as the conflict between Israel and Iran added further uncertainty to the world's economic troubles in a week packed with central bank meetings. The escalation in the Middle East came just as Group of Seven leaders were gathering in Canada, with US President Donald Trump's tariffs already straining ties. Yet there was no sign of panic among investors on Monday as currency markets stayed calm and Wall Street stock futures firmed after an early dip. Brent was last off 0.5 per cent at $US73.85 ($A113.40) a barrel,, but last week's 13 per cent surge means its inflationary pulse, if sustained, could make the Federal Reserve more nervous about giving too many hints at its Wednesday meeting about interest rate cuts later in the year. Markets are still wagering on two easings by December, with a first move in September seen as most likely. "The key is how much flexibility the Fed thinks it has, we've been pleasantly surprised we've not yet seen in inflationary pass-through from the tariffs," said Ben Laidler, head of equity strategy at Bradesco BBI. "The situation in the Middle East is the major issue of the day. The message from the market is that it isn't too afraid, but it does turn what was already going to be a busy week into a frenetic one, and that has a lot of people on the sidelines." Data on US retail sales on Tuesday will also be a hurdle, as a pullback in autos could drag the headline down even as core sales edge higher. A market holiday on Thursday means weekly jobless claims figures are out on Wednesday. For now, investors were waiting on developments and MSCI's all-country world share index gained 0.2 per cent, to sit a touch below last week's record high. Europe's STOXX 600 rose 0.3 per cent and S&P 500 futures rose 0.5 per cent. Earlier in the day, Chinese blue chips added 0.24 per cent, and Hong Kong gained 0.7 per cent as data showed Chinese retail sales rose 6.4 per cent in May to handily top forecasts, while industrial output was in line with expectations. In currency markets, the dollar gave back of some of last Friday's gains against European currencies - the euro was up 0.3 per cent at $US1.1582 ($A1.7785) - and held steady on the Japanese yen at 144.10. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. Currencies from oil exporters Norway and Canada both benefited, with the Norwegian crown hitting its highest since early 2023. "We should expect that economies with a positive energy trade balance should see their currencies benefiting from the shock to oil prices," noted analysts at Deutsche Bank. "It's notable the dollar is in this category, highlighting how the US has moved from a net energy-importer to a net exporter in recent years." Central banks in Norway and Sweden meet this week, with the latter thought likely to trim rates. The Swiss National Bank meets on Thursday and is considered certain to cut by at least a quarter point to take rates to zero, with some chance it may go negative given the strength of the Swiss franc. The Bank of Japan holds a policy meeting on Tuesday and is widely expected to hold rates at 0.5 per cent, while leaving open the possibility of tightening later in the year. There is also speculation it could consider slowing the rundown of its government bond holdings from next fiscal year. Government bond yields nudged higher around the world. The US 10-year Treasury yield was last up 1 bp at 4.44 per cent Germany's 10-year Bund yield was up nearly 3 bps at 2.56 per cent. The calmer mood across markets saw some of gold's safe-haven bid reverse and it was down 0.55 per cent at $US3,413 ($A5,241) an ounce.. World shares have nudged up, with oil prices steadier but holding on to most of last week's increase, as the conflict between Israel and Iran added further uncertainty to the world's economic troubles in a week packed with central bank meetings. The escalation in the Middle East came just as Group of Seven leaders were gathering in Canada, with US President Donald Trump's tariffs already straining ties. Yet there was no sign of panic among investors on Monday as currency markets stayed calm and Wall Street stock futures firmed after an early dip. Brent was last off 0.5 per cent at $US73.85 ($A113.40) a barrel,, but last week's 13 per cent surge means its inflationary pulse, if sustained, could make the Federal Reserve more nervous about giving too many hints at its Wednesday meeting about interest rate cuts later in the year. Markets are still wagering on two easings by December, with a first move in September seen as most likely. "The key is how much flexibility the Fed thinks it has, we've been pleasantly surprised we've not yet seen in inflationary pass-through from the tariffs," said Ben Laidler, head of equity strategy at Bradesco BBI. "The situation in the Middle East is the major issue of the day. The message from the market is that it isn't too afraid, but it does turn what was already going to be a busy week into a frenetic one, and that has a lot of people on the sidelines." Data on US retail sales on Tuesday will also be a hurdle, as a pullback in autos could drag the headline down even as core sales edge higher. A market holiday on Thursday means weekly jobless claims figures are out on Wednesday. For now, investors were waiting on developments and MSCI's all-country world share index gained 0.2 per cent, to sit a touch below last week's record high. Europe's STOXX 600 rose 0.3 per cent and S&P 500 futures rose 0.5 per cent. Earlier in the day, Chinese blue chips added 0.24 per cent, and Hong Kong gained 0.7 per cent as data showed Chinese retail sales rose 6.4 per cent in May to handily top forecasts, while industrial output was in line with expectations. In currency markets, the dollar gave back of some of last Friday's gains against European currencies - the euro was up 0.3 per cent at $US1.1582 ($A1.7785) - and held steady on the Japanese yen at 144.10. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. Currencies from oil exporters Norway and Canada both benefited, with the Norwegian crown hitting its highest since early 2023. "We should expect that economies with a positive energy trade balance should see their currencies benefiting from the shock to oil prices," noted analysts at Deutsche Bank. "It's notable the dollar is in this category, highlighting how the US has moved from a net energy-importer to a net exporter in recent years." Central banks in Norway and Sweden meet this week, with the latter thought likely to trim rates. The Swiss National Bank meets on Thursday and is considered certain to cut by at least a quarter point to take rates to zero, with some chance it may go negative given the strength of the Swiss franc. The Bank of Japan holds a policy meeting on Tuesday and is widely expected to hold rates at 0.5 per cent, while leaving open the possibility of tightening later in the year. There is also speculation it could consider slowing the rundown of its government bond holdings from next fiscal year. Government bond yields nudged higher around the world. The US 10-year Treasury yield was last up 1 bp at 4.44 per cent Germany's 10-year Bund yield was up nearly 3 bps at 2.56 per cent. The calmer mood across markets saw some of gold's safe-haven bid reverse and it was down 0.55 per cent at $US3,413 ($A5,241) an ounce.. World shares have nudged up, with oil prices steadier but holding on to most of last week's increase, as the conflict between Israel and Iran added further uncertainty to the world's economic troubles in a week packed with central bank meetings. The escalation in the Middle East came just as Group of Seven leaders were gathering in Canada, with US President Donald Trump's tariffs already straining ties. Yet there was no sign of panic among investors on Monday as currency markets stayed calm and Wall Street stock futures firmed after an early dip. Brent was last off 0.5 per cent at $US73.85 ($A113.40) a barrel,, but last week's 13 per cent surge means its inflationary pulse, if sustained, could make the Federal Reserve more nervous about giving too many hints at its Wednesday meeting about interest rate cuts later in the year. Markets are still wagering on two easings by December, with a first move in September seen as most likely. "The key is how much flexibility the Fed thinks it has, we've been pleasantly surprised we've not yet seen in inflationary pass-through from the tariffs," said Ben Laidler, head of equity strategy at Bradesco BBI. "The situation in the Middle East is the major issue of the day. The message from the market is that it isn't too afraid, but it does turn what was already going to be a busy week into a frenetic one, and that has a lot of people on the sidelines." Data on US retail sales on Tuesday will also be a hurdle, as a pullback in autos could drag the headline down even as core sales edge higher. A market holiday on Thursday means weekly jobless claims figures are out on Wednesday. For now, investors were waiting on developments and MSCI's all-country world share index gained 0.2 per cent, to sit a touch below last week's record high. Europe's STOXX 600 rose 0.3 per cent and S&P 500 futures rose 0.5 per cent. Earlier in the day, Chinese blue chips added 0.24 per cent, and Hong Kong gained 0.7 per cent as data showed Chinese retail sales rose 6.4 per cent in May to handily top forecasts, while industrial output was in line with expectations. In currency markets, the dollar gave back of some of last Friday's gains against European currencies - the euro was up 0.3 per cent at $US1.1582 ($A1.7785) - and held steady on the Japanese yen at 144.10. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. Currencies from oil exporters Norway and Canada both benefited, with the Norwegian crown hitting its highest since early 2023. "We should expect that economies with a positive energy trade balance should see their currencies benefiting from the shock to oil prices," noted analysts at Deutsche Bank. "It's notable the dollar is in this category, highlighting how the US has moved from a net energy-importer to a net exporter in recent years." Central banks in Norway and Sweden meet this week, with the latter thought likely to trim rates. The Swiss National Bank meets on Thursday and is considered certain to cut by at least a quarter point to take rates to zero, with some chance it may go negative given the strength of the Swiss franc. The Bank of Japan holds a policy meeting on Tuesday and is widely expected to hold rates at 0.5 per cent, while leaving open the possibility of tightening later in the year. There is also speculation it could consider slowing the rundown of its government bond holdings from next fiscal year. Government bond yields nudged higher around the world. The US 10-year Treasury yield was last up 1 bp at 4.44 per cent Germany's 10-year Bund yield was up nearly 3 bps at 2.56 per cent. The calmer mood across markets saw some of gold's safe-haven bid reverse and it was down 0.55 per cent at $US3,413 ($A5,241) an ounce..
ABC News
4 hours ago
- ABC News
The Israel-Iran conflict won't be over quickly, says global strategist
Rabobank's global strategist Michael Every says the conflict between Israel and Iran is "no longer theatre, no longer a signalling mechanism", rather it's an "attempt by Israel to take out Iran's nuclear program and potentially remove the regime entirely, or at least weaken it to the point where it falls."
