Further peace talks may be on the cards this week with U.S. envoys reportedly heading to Islamabad on Monday, although Tehran has said it will not participate. The existing two-week ceasefire between the sides is set to expire on Wednesday.
As for oil prices, the 9% drop on Friday was followed by a 5% rebound on Monday. However, crude prices remain below $100 per barrel, and some 20 ships managed to pass through the contested strait on Saturday – the most since March 1.
Stock markets in Asia were much less disturbed by the weekend tensions than they have been by similar news over the past few months. Perhaps they are riffing in part on Wall Street's gains of more than 1% on Friday and the 13th straight day of gains for the tech-heavy Nasdaq – the first time that’s happened since 1992. Unlucky 13?
Tech optimism is once again overwhelming geopolitical concerns – or is even being partly driven by them. Tesla on Wednesday will be the first of the so-called Magnificent Seven to report first-quarter earnings.
Meantime, European shares slipped early on Monday, Wall Street futures edged down, and the dollar rebounded.
More broadly, however, there’s a sense that despite the back and forth in the Gulf over the weekend, the beginning of the end of the conflict may now be in sight, even if it takes weeks or months to get physical oil supplies back to normal.
Elsewhere, China left its key interest rates unchanged on Monday, while British markets are watching as pressure grows again on Prime Minister Keir Starmer.
Starmer will speak to Parliament later today on what he did – or didn’t – know about the security vetting of former U.S. ambassador Peter Mandelson, who was sacked last September over links to the late sex offender Jeffrey Epstein.
Markets appear less concerned about a new election than by the prospect of Starmer being unseated by his own ruling Labour Party.
