Following a rush to traditional financial safe havens on Friday, there has been a partial reversal on Monday, yet markets remain on edge as events continue to unfold.
The dollar, already bolstered by the contrasting interest rate outlook between the Fed and European central banks, has seen significant gains, reaching a peak for 2024 on Monday after its strongest performance since 2022.
Stock markets in Asia experienced mixed performance, with many reacting to Friday's late sell-off on Wall Street. However, U.S. stock futures rebounded noticeably on Monday, accompanied by higher European stock prices.
Despite gold prices spiking over 2% on Friday amid the safety bid, much of that increase has been reversed in subsequent trading sessions. Similarly, U.S. crude oil prices retreated sharply from their recent highs, marking a significant pullback.
Asia Pacific Markets
Asia-Pacific markets mostly declined on Monday as investors assessed the fallout from Iran’s drone and missile attacks on Israel over the weekend. Attention also turned to forthcoming economic data releases from China and Japan.
Despite warnings of potential intervention, the dollar/yen pair continued its ascent to levels not seen in 24 years, nearing 154. Meanwhile, the Australian dollar struggled to breach the support zone around the $0.6490 mark.
European Markets
European markets saw gains on Monday despite heightened geopolitical tensions. The regional Stoxx 600 index rose by 0.24%.
Although the Euro and Sterling showed slight strength against the U.S. Dollar, this movement appears to be a mere consolidation phase at present.
American Markets
The release of the March U.S. retail sales report dominates Monday's economic agenda, alongside earnings reports from major banks like Goldman Sachs. Additionally, the International Monetary Fund's Spring meeting commences in Washington, featuring the unveiling of its latest World Economic Outlook on Tuesday.
The Greenback continues its downward trajectory against the Canadian dollar, approaching a potential support zone around the 1.3690 level.