The escalation of war in the Middle East has become the dominant force shaping global markets. After ending last week on a softer note, the US dollar rebounded strongly, gaining at least 0.5% against most G10 currencies. Traditional safe havens such as the Swiss franc weakened, while the Canadian dollar slipped modestly despite typically performing better during dollar strength. Oil prices surged sharply before stabilizing, and equity markets broadly turned lower. The uncertainty surrounding Iran and warnings that the conflict could last weeks have deepened investor caution.

Asia Pacific Markets

Trading across Asia Pacific reflected heightened risk aversion. Most regional equity indices declined, though China’s CSI 300 managed a modest gain and Australia’s ASX 200 hovered near flat territory. Hong Kong’s Hang Seng suffered notable losses, while Thailand and Pakistan experienced sharper sell-offs. The dollar strengthened against the yen, reaching the mid-JPY157 area. It also advanced against the offshore yuan after policy signals from the PBOC encouraged short positions. In India, the rupee weakened sharply, pressured by foreign equity outflows.

European Markets

European markets followed the cautious global tone. The Stoxx 600 index retreated after five consecutive weeks of gains, while bond yields edged higher across the region. The euro slipped below $1.17 in Asian trade before recovering part of the loss in Europe, though upside momentum appeared limited. Sterling dropped to its lowest level since mid-December before bouncing modestly, yet it faces resistance near the mid-$1.34 area. Gold jumped sharply at the open, holding well above last week’s peak, while silver reversed part of its early surge.

American Markets

In North America, US index futures pointed to losses exceeding 1%, reflecting persistent geopolitical tension. Treasury yields climbed toward 3.97% on the 10-year note. The dollar remained firm against the Canadian dollar within a narrow range after retreating late last week. Oil markets stayed volatile, with April WTI spiking above $75 before consolidating in the low $70s. Attention now turns to US economic data, including the ISM manufacturing report and Friday’s employment figures, where a modest payroll increase is anticipated.