Global markets traded unevenly on Tuesday, while bonds stabilised after a sharp sell‑off, as US President Donald Trump paused a planned strike on Iran and signalled a high likelihood of a nuclear deal, sending oil prices lower.
Trump said he had delayed the attack to allow time for negotiations, after Tehran submitted a new proposal to Washington aimed at ending the conflict. He later stated there was a “very high probability” of reaching an agreement to prevent Iran from acquiring nuclear weapons.
Oil prices decline
Brent crude futures fell nearly 2% to $109.94 per barrel, while US crude dropped 1.54% to $106.99 per barrel. Both remain more than 50% higher compared to pre‑war levels.
Cautious markets
Investors remained cautious following heightened tensions, including a drone attack in the United Arab Emirates over the weekend.
In equity markets, the MSCI Asia‑Pacific index (excluding Japan) fell by more than 1%. Japan’s Nikkei declined 0.3%, South Korea’s Kospi dropped over 3%, and China’s CSI300 index fell 0.8%.
US futures also weakened, with Nasdaq futures down 0.5% and S&P 500 futures slipping 0.3%.
Bonds stabilise
Falling oil prices helped ease pressure on global bond markets after a recent sell‑off.
US 10‑year Treasury yields dropped to 4.6034%, while two‑year yields edged lower to 4.0674%. Japanese government bond yields also declined after reaching record highs in the previous session.
Inflation concerns remain
Despite the stabilisation, concerns persist over a potential inflation shock linked to the Iran conflict, with markets increasingly pricing in interest rate hikes by major central banks this year.
G7 finance ministers, meeting in Paris, acknowledged rising concerns over public debt and bond market volatility.
Currency and gold
The US dollar strengthened as a safe‑haven asset, rising 0.1% to 158.99 yen. The euro slipped 0.17% to $1.1636, while sterling fell 0.2% to $1.3408.
Gold prices declined 0.5% to $4,543.26 per ounce, pressured by rising bond yields.
Source: CNA
