Oil Prices Plummet as Iran Conflict Eases
The US-Iran conflict took a pause over the weekend, leading to a sharp drop in oil prices and resetting the risk mood. Brent crude fell as much as 7.4% at Monday's open, briefly dipping below $90 a barrel. The global benchmark is still up more than 50% this year, but the recent surge was reversed by the de-escalation of tensions.
The pause in US strikes on Iran has lifted sentiment in equities, with Asian markets opening higher on Monday. MSCI's Asia Pacific gauge rose 0.5%, led by South Korea and Japan. However, chipmakers were volatile, with Nvidia reportedly in talks to provide a guarantee of around $250 billion to help OpenAI lease computing from a SoftBank-developed data centre.
The US Federal Reserve is set to make its decision on interest rates on Wednesday, with bond markets pricing in a higher chance of a rate hike than previously expected. A hold remains the base case, but the tone of the statement and press conference will carry more weight than the decision itself.