US-Iran Conflict Eases, Oil Falls and Markets Begin to Feel Relieved
Oil prices fell sharply on Monday (July 27th) after the United States and Iran halted further attacks. Brent crude briefly plunged 7.4% to below US$90 per barrel before paring some of its losses.
The lull in the conflict eased concerns about energy supply disruptions from the Middle East. The United States halted attacks after 13 days of operations, while Iran stated it had suspended its retaliatory strikes.
The decline in oil prices also eased inflation concerns and boosted bond prices. The 10-year US Treasury yield fell four basis points to 4.63%, while the dollar weakened against all major G-10 currencies.
Stock market sentiment also improved. Nasdaq 100 futures rose 1.2%, the S&P 500 gained 0.7%, and Asian stocks edged up 0.3%, although investors were still awaiting results from major technology companies.
Gold surged more than 1% to near US$4,100 per troy ounce, while the yen strengthened to around 163.55 per dollar. However, the rupiah, bonds, and Indonesian stocks were under pressure after the abrupt resignation of Bank Indonesia Governor Perry Warjiyo.
The market will next be closely monitoring interest rate decisions by the Fed, the Bank of England, and the Bank of Japan. Oil has the potential to remain weak if the lull in the conflict persists, while stocks and bonds could strengthen. However, uncertainty remains high as there is no evidence that shipping routes in the region have returned to normal. (asd)*
Source: Newsmaker.id
