Both Brent and WTI crude leapt back above $100 a barrel on Monday as the U.S. Navy prepared its Hormuz blockade, set to come into effect at 10 a.m. EDT, though the benchmarks remain below last week’s highs before the ceasefire announcement.
Wall Street futures were down almost 1% before the bell and European shares slipped, while major Asian indexes closed lower. The dollar advanced against major currencies in early trading but later pared some of those gains.
Brent crude is up some 40% since the conflict started. Perhaps just as worrying for American consumers was President Trump’s admission on Sunday that gas prices may stay elevated through the midterm elections in November - or rise even more. That acknowledgement suggests the pressure of domestic politics alone is unlikely to secure an early end to the Middle East conflict.
The war's inflation implications became clear last Friday as U.S. consumer prices increased by the most in nearly four years in March, leaving annual inflation at 3.3%, with gasoline prices accounting for most of the monthly rise.
Elsewhere, Hungary’s nationalist leader Viktor Orban was voted out of office after 16 years in power in a landslide weekend election that’s set to give winner Peter Magyar’s party a two-thirds majority in parliament. That will allow Magyar to seek warmer ties with the EU and enact constitutional reforms.
The Hungarian forint surged, as did the country’s bonds, with some 18 billion euros of frozen EU funds now potentially back on tap.
Finally, the first-quarter U.S. earnings season will kick off in earnest today with Goldman Sachs’ update, while the IMF and World Bank’s Spring Meetings are set to begin in Washington.
