Morning Note: A Round-up of Global Financial Market News

Market News

Brent Crude started the week about 4% higher, trading above $116, at its highest level since July 2022 when Russia’s invasion of Ukraine disrupted energy markets. As the war in Iran entered its fifth week, investors are growing increasingly doubtful about the prospects for a swift resolution, particularly after Iran-backed Houthi militants in Yemen joined the conflict and additional US troops were deployed to the region. 

In an interview with the FT on Sunday, President Trump said he wants to “take the oil in Iran” and could seize the export hub of Kharg Island (which handles 90% of Iranian exports), a move that could trigger significant retaliation from Tehran. Earlier this month, the US struck military sites on the island. Separately, Pakistan, Egypt, Saudi Arabia, and Turkey met to find a path out.

The yield on the US 10-year Treasury note eased to around 4.38% but remained near its highest levels since July 2025, as investors weighed the impact of the conflict on inflation, growth, and interest rates. Gold moved up to $4,520 an ounce. Aluminium climbed as much as 6% after Iran attacked two production sites in UAE and Bahrain.

US equities ended last week on a low – S&P 500 (-1.7%); Nasdaq (-2.2%) – although the futures market is currently predicting a small bounce at the open this afternoon. Investors will now look ahead to key jobs reports this holiday-shortened week, alongside earnings from Nike tomorrow.

In Asia, equities fell on concern higher oil prices will weigh on economic growth: Nikkei 225 (-2.8%); Hang Seng (-0.9%). However, the main indices closed well above their session lows. The yen weakened to 160 for the first time since 2024, although it reversed some of the losses as the country’s top currency chief stepped up verbal warnings to arrest the currency’s slide.

The FTSE 100 is currently little changed at 9,976, while Sterling trades at $1.3243 and €1.1520.

Source: Bloomberg