Oil Price Drop Fuels Global Market Rally Amid Inflation Concerns

Global stock markets and bond yields rebounded on Monday following a drop in oil prices due to a pause in fighting in the Gulf region. Brent crude fell by 5.2% to $91.73 per barrel, while US crude dropped 5.4% to $84.45.

The decline in oil prices provided relief from inflation concerns and led markets to reduce the likelihood of interest rate hikes from the Federal Reserve. The central bank meets on Wednesday, with analysts at Goldman Sachs noting that investors see the outcome as 'unusually uncertain' due to recent Fed divisions and Chair Kevin Warsh's unclear position.

Despite the uncertainty, most analysts doubt a rate hike this week following softer June inflation data. The Bank of England and Bank of Japan meetings on Thursday and Friday are also expected to result in no changes to interest rates.