Shares mixed as Iran talks teeter; dollar gains
Brent crude jumped by up to 4.6% overnight, ending at $103 a barrel, with the US President rejecting Iran's proposal for peace talks. Stocks were flat on Monday amid concerns over stalled negotiations between the United States and Iran, which have left the vital Strait of Hormuz virtually closed. This has sent oil prices higher.
US stocks climbed to all-time highs, while in Europe, US stock futures remained steady. The correlation between oil prices and stocks is now positive, indicating they are more likely to move together rather than oppositely as seen during most of the war's duration.
Meanwhile, Iran’s FM spokesperson described the US proposal for peace talks as legitimate and generous. Investors have shifted their focus away from energy prices, given strong enthusiasm in tech-related sectors and macroeconomic data like last week's solid US payrolls report.
The dollar strengthened on Monday, gaining 0.2% against the Japanese yen to 156.9 yen. The euro dipped 0.1% to $1.1778, while sterling fell 0.16% to $1.3613. Iran has effectively shut the strait since February, choking off a fifth of global oil and gas shipments.
The Gulf will be on the agenda when US President Trump visits China from Wednesday for his first face-to-face talks with Chinese President Xi Jinping in over six months. In commodity markets, gold slipped 1.3% to $4,654 an ounce, losing support as a safe haven or hedge against inflation risks.
