Global markets started the week with a stronger appetite for risk after signs of a possible agreement between the United States and Iran. Although the details remain uncertain and both sides appear to interpret the arrangement differently, investors reacted positively. Crude oil prices continued to decline, pushing Brent and WTI toward multi-month lows, while equities and bonds advanced. The US dollar weakened broadly, and China’s central bank set the yuan reference rate at its strongest level in three years. Meanwhile, debate continues over Washington’s restrictions on new artificial intelligence technologies and the inclusion of several major Chinese corporations on a US list linked to military activities. In Switzerland, voters rejected a proposal to limit the country’s population to 10 million, though concerns surrounding immigration remain unresolved.

Asia Pacific Markets

Trading across the Asia-Pacific region reflected improving market sentiment. Regional stock indices moved higher, with several major exchanges posting gains exceeding 2%. The offshore yuan strengthened further, reaching its best level in roughly three years as authorities continued to guide the currency higher through official reference settings. In Australia, investors focused on the upcoming Reserve Bank meeting, where policymakers are widely expected to keep interest rates unchanged after multiple hikes earlier this year. Japan reported stronger economic signals, including rebounds in industrial production and service-sector activity. Attention is now turning to the Bank of Japan’s policy decision, with financial markets largely anticipating another rate increase. Lower oil prices also supported the Indian rupee, helping it reach its strongest level in more than a month.

European Markets

European assets benefited from the improved global mood. The euro advanced after successfully holding key support levels during the previous week and moved to its highest levels in several sessions before entering a consolidation phase. The region’s equity markets also extended gains, with the Stoxx 600 building on last week’s strong performance. At the same time, government bond yields continued to decline, mirroring moves in other major markets. Recent economic data painted a mixed picture for the euro area. Industrial production recorded another modest monthly increase, yet overall output for the first four months of the year remained unchanged from the same period a year earlier. Trade figures also weakened significantly, with the region’s surplus shrinking compared with 2025 levels.

American Markets

North American markets were driven by falling energy prices and expectations surrounding upcoming economic releases. US equity indices recovered from recent lows and appeared set for a stronger opening, supported by lower Treasury yields and easing inflation concerns linked to cheaper oil. Investors awaited fresh data on industrial activity and manufacturing conditions after recent surveys showed the sector at its strongest level in several years. In currency markets, the Mexican peso extended its advance, benefiting from the broader risk-friendly environment and becoming one of the better-performing emerging-market currencies. The Canadian dollar also strengthened as the US currency retreated. Meanwhile, oil remained under pressure, with WTI dropping below $80 per barrel for the first time since April, reinforcing the market’s shift toward risk assets.