Markets Briefing: Oil Tumbles and Bonds Rally as a US-Iran Pause Opens a Fed, BoE and BoJ Week
A weekend pause in US strikes on Iran triggered a relief rally across Asian and European trading, pulling oil sharply lower and lifting bonds, stocks and gold as the haven premium built up over a fortnight of conflict began to unwind (BBG) (BBG). President Trump held off on further attacks to allow room for diplomacy, and Iran said it had suspended its own military response, though traders remain wary that the lull holds (Reuters) (CNN). The move set a risk-on tone into what is the pivotal week of the summer, with the Federal Reserve, Bank of England and Bank of Japan all deciding policy and the mega-cap technology earnings that have unnerved equity investors.
The unwind was led by energy. Brent had briefly topped 100 dollars a barrel last week as the conflict throttled Strait of Hormuz and Red Sea flows; it slipped back toward the low 90s in Asian hours, even as fewer than ten vessels a day transited Hormuz and Houthi attacks on Saudi installations kept a floor under prices (Reuters) (BBG).
Equity futures firmed in response, with the S&P 500 up 0.8 per cent and the Nasdaq up 1.3 per cent, a rebound after last week's chip-led sell-off, while Europe's DAX added 1.0 per cent and the Euro Stoxx 50 0.8 per cent (BBG) (BBG). In Asia, Australia's ASX led the region up 1.5 per cent, Hong Kong's Hang Seng added 0.8 per cent and the MSCI emerging-market index rose 1.3 per cent; the Nikkei held a 0.4 per cent gain even with the yen firmer, while mainland China's CSI 300 and Korea's Kospi lagged with more modest advances.
Treasuries advanced as the pullback in oil eased the inflation anxiety that had gripped rates markets, with the US 10-year future up 0.3 per cent and the cash yield around 4.63 per cent; European and Asia-Pacific government bonds rose in sympathy, with Japanese and Australian 10-year futures both firming (BBG) (WSJ). The dollar, the currency of choice during the conflict, weakened against every G10 peer: the DXY eased 0.3 per cent, the euro firmed 0.3 per cent to 1.14, sterling rose to 1.34, and the yen strengthened to about 163.6 (BBG). Among emerging currencies, the rand and the forint led the advance, each up around 0.8 and 0.7 per cent, while the Korean won lagged, off about 0.6 per cent (BBG). The Singapore dollar strengthened after the Monetary Authority of Singapore unexpectedly tightened policy, while the rupiah fell after Bank Indonesia's governor abruptly resigned (WSJ) (BBG).
The central-bank calendar dominates the week. The Fed meets Wednesday under growing pressure to raise rates as the oil-driven rebound in prices risks colliding with an artificial-intelligence demand boom and fresh tariffs, raising the prospect of dissents whichever way the committee lands (BBG) (BBG). A tamer-than-expected June inflation print gives officials cover to hold, and markets price only around a one-in-three chance of a move (BBG). The Bank of England is expected on Thursday to hold despite the jump in oil prices (FT), and the Bank of Japan on Friday is likewise seen standing pat, even as the weak yen fuels bets on an earlier hike (Nikkei) (Reuters). Christine Lagarde has signalled the ECB is primed for a possible move in September (BBG).
Gold extended its haven bid, firming around 0.7 per cent, with fund managers still arguing the metal is undervalued after this year's run (Yahoo) (BBG). In corporate news, Nvidia is in talks to provide a guarantee running to a quarter of a trillion dollars to help OpenAI lease a roughly half-a-trillion-dollar data centre being built by SoftBank, a deal that has sharpened investor unease about the circular financing underpinning the AI boom just as Microsoft and Meta report Wednesday and Apple and Amazon Thursday (BBG) (BBG). China's memory-chip maker CXMT surged more than fivefold on its Shanghai debut, briefly becoming the country's largest onshore-listed company (BBG).
On the data front, China's industrial profit growth slowed sharply to 15.1 per cent in the year to June, from 21.1 per cent, its weakest pace this year, while Japan's services producer prices eased to 3.2 per cent and the May leading index dipped (BBG).
The day ahead brings Germany's Ifo business climate, US durable-goods orders, euro-area money supply and the Dallas Fed manufacturing survey, alongside the Swiss National Bank's weekly sight-deposit figures, as positioning firms up ahead of Wednesday's Fed decision. You can find the full preview here.
Time Stamp: 27 July 2026, 07:12 CET
A weekend pause in US strikes on Iran triggered a relief rally across Asian and European trading, pulling oil sharply lower and lifting bonds, stocks and gold as the haven premium built up over a fortnight of conflict began to unwind (BBG) (BBG). President Trump held off on further attacks to allow room for diplomacy, and Iran said it had suspended its own military response, though traders remain wary that the lull holds (Reuters) (CNN). The move set a risk-on tone into what is the pivotal week of the summer, with the Federal Reserve, Bank of England and Bank of Japan all deciding policy and the mega-cap technology earnings that have unnerved equity investors.
The unwind was led by energy. Brent had briefly topped 100 dollars a barrel last week as the conflict throttled Strait of Hormuz and Red Sea flows; it slipped back toward the low 90s in Asian hours, even as fewer than ten vessels a day transited Hormuz and Houthi attacks on Saudi installations kept a floor under prices (Reuters) (BBG).
Equity futures firmed in response, with the S&P 500 up 0.8 per cent and the Nasdaq up 1.3 per cent, a rebound after last week's chip-led sell-off, while Europe's DAX added 1.0 per cent and the Euro Stoxx 50 0.8 per cent (BBG) (BBG). In Asia, Australia's ASX led the region up 1.5 per cent, Hong Kong's Hang Seng added 0.8 per cent and the MSCI emerging-market index rose 1.3 per cent; the Nikkei held a 0.4 per cent gain even with the yen firmer, while mainland China's CSI 300 and Korea's Kospi lagged with more modest advances.
Treasuries advanced as the pullback in oil eased the inflation anxiety that had gripped rates markets, with the US 10-year future up 0.3 per cent and the cash yield around 4.63 per cent; European and Asia-Pacific government bonds rose in sympathy, with Japanese and Australian 10-year futures both firming (BBG) (WSJ). The dollar, the currency of choice during the conflict, weakened against every G10 peer: the DXY eased 0.3 per cent, the euro firmed 0.3 per cent to 1.14, sterling rose to 1.34, and the yen strengthened to about 163.6 (BBG). Among emerging currencies, the rand and the forint led the advance, each up around 0.8 and 0.7 per cent, while the Korean won lagged, off about 0.6 per cent (BBG). The Singapore dollar strengthened after the Monetary Authority of Singapore unexpectedly tightened policy, while the rupiah fell after Bank Indonesia's governor abruptly resigned (WSJ) (BBG).
The central-bank calendar dominates the week. The Fed meets Wednesday under growing pressure to raise rates as the oil-driven rebound in prices risks colliding with an artificial-intelligence demand boom and fresh tariffs, raising the prospect of dissents whichever way the committee lands (BBG) (BBG). A tamer-than-expected June inflation print gives officials cover to hold, and markets price only around a one-in-three chance of a move (BBG). The Bank of England is expected on Thursday to hold despite the jump in oil prices (FT), and the Bank of Japan on Friday is likewise seen standing pat, even as the weak yen fuels bets on an earlier hike (Nikkei) (Reuters). Christine Lagarde has signalled the ECB is primed for a possible move in September (BBG).
Gold extended its haven bid, firming around 0.7 per cent, with fund managers still arguing the metal is undervalued after this year's run (Yahoo) (BBG). In corporate news, Nvidia is in talks to provide a guarantee running to a quarter of a trillion dollars to help OpenAI lease a roughly half-a-trillion-dollar data centre being built by SoftBank, a deal that has sharpened investor unease about the circular financing underpinning the AI boom just as Microsoft and Meta report Wednesday and Apple and Amazon Thursday (BBG) (BBG). China's memory-chip maker CXMT surged more than fivefold on its Shanghai debut, briefly becoming the country's largest onshore-listed company (BBG).
On the data front, China's industrial profit growth slowed sharply to 15.1 per cent in the year to June, from 21.1 per cent, its weakest pace this year, while Japan's services producer prices eased to 3.2 per cent and the May leading index dipped (BBG).
The day ahead brings Germany's Ifo business climate, US durable-goods orders, euro-area money supply and the Dallas Fed manufacturing survey, alongside the Swiss National Bank's weekly sight-deposit figures, as positioning firms up ahead of Wednesday's Fed decision. You can find the full preview here.
Time Stamp: 27 July 2026, 07:12 CET