Oil softens, base metals jump on geopolitical tensions [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Risk appetite is better this Monday morning than it was last Friday when the world was bracing for the Iranian retaliation on Israel. Iran fired more than 300 drones and missiles on Israel on Saturday night, but only a small number reached Israel, limiting damages. Oil is lower but base metals including copper, iron and aluminum surged after the US and the UK decided to impose sanctions on Russian supplies.

In the FX, the US dollar strengthens on the back of a severe deterioration in Federal Reserve (Fed) rate cut expectations following strong jobs and inflation data, and the dollar outlook remains comfortably bullish. But rate cut expectations in Europe remain intact bringing parity back on the table for the EURUSD.

In equities, the S&P500 posted its worst weekly performance since late October 2023. Mixed bank earnings didn’t help improve mood on Friday. This week, earnings season gains momentum with the rest of the US big banks, Netflix and TSM due to announce their Q1 results. The expectation is a 3.8% annual growth in S&P500 companies’ earnings per share in the Q1, while profits for the Magnificent Seven are expected to have risen around 38%.

In cryptocurrencies, Bitcoin halving is expected to happen this week.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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