Oil gapped above $90 then retreated after US-Iran strikes, signaling the escalation was priced in. Silver bounced from $55. New Zealand CPI due Tuesday.
Alpha Score of 53 reflects moderate overall profile with weak momentum, strong value, weak quality, weak sentiment.
Financial markets opened the week with a muted reaction to the latest US-Iran escalation. Brent crude gapped above $90 in early Asian trade, then slipped back below that level during the European session. The inability of oil to sustain the advance helped stabilize broader sentiment. European equities traded mixed rather than broadly lower. US index futures pointed to a firmer open.
Iranian Foreign Ministry spokesman Esmail Baghaei said negotiations with the US could still proceed if they align with Iran's national interests. Intermediaries have continued exchanging messages despite the latest military exchanges, he said. The comments reinforced the market's prevailing view that the conflict is still more likely to be contained than to develop into a prolonged regional war.
UK politics also drew attention. Andy Burnham became the country's seventh prime minister in a decade after King Charles invited him to form a government. Markets showed little reaction. Investors appeared relieved by expectations that Home Secretary Shabana Mahmood will become chancellor instead of the more left-leaning Ed Miliband, traders said. UK bond markets remained broadly stable, suggesting fiscal concerns are viewed as a longer-term issue rather than an immediate risk.
In currency markets, the Australian dollar led gains, followed by the New Zealand dollar. The US dollar also firmed. The Swiss franc underperformed, highlighting the absence of a classic flight to safety despite the geopolitical backdrop. The Canadian dollar and euro lagged. Sterling and the yen traded near the middle of the performance table.
New Zealand's second-quarter CPI report is due Tuesday. Headline inflation is expected to accelerate to 4.1% year-on-year from 3.1%, above the RBNZ's own 3.9% projection. With oil prices remaining elevated, policymakers will focus on whether higher fuel costs are spilling into broader inflation measures, traders said. The various core inflation gauges will be just as important as the headline reading.
Silver briefly fell below $55, then recovered quickly as fresh geopolitical tensions failed to trigger another wave of selling. The metal remains vulnerable if the Strait of Hormuz crisis deepens and Brent advances toward $100, traders said. Downside risks persist below 59.66, fading bearish momentum suggests a short-term bottom may be forming.
Brent oil opened above $90 after the weekend escalation. Restrained buying suggests much of the move was already priced following last week's 17% surge, traders said. The market's focus is shifting from geopolitical headlines to the duration of the Strait of Hormuz blockade. Every additional day of disruption increases the risk of genuine physical supply shortages. A sustained move above $95 could open the way toward $100 and eventually a retest of this year's highs.
Canada's annual inflation rate slowed more than expected to 2.8% in June, driven by the largest monthly decline in CPI since December 2024. Core inflation also eased. Both CPI Median and CPI Trimmed undershot expectations, suggesting underlying price pressures continued to moderate.
The ECB's latest SAFE survey showed eurozone firms continued to face tighter financing conditions in the second quarter. Bank loan interest rates increased sharply even as overall credit availability remained broadly stable. Businesses reported slower expected growth in selling prices, input costs and wages. Inflation expectations stayed well anchored across one-, three- and five-year horizons.
New Zealand's June trade surplus came in at NZD 23 million, well below expectations. Exports expanded strongly across major trading partners. Imports increased even faster, pointing to firm domestic demand.
China's central bank left its one-year and five-year Loan Prime Rates unchanged at 3.0% and 3.5%, respectively, extending its policy pause to a 14th consecutive month. The decision reflects a cautious balance between slowing economic growth and rising external risks from the Middle East, traders said. Modest rate cuts later this year remain possible if domestic demand weakens further and inflation stays subdued.
Intraday bias in AUD/USD remains neutral. As long as the 38.2% retracement of 0.7277 to 0.6864 at 0.7022 holds, the fall from 0.7277 is mildly in favor to continue. A break below 0.6912 would bring a retest of the 0.6864 low. On the upside, a sustained break of 0.7022 would target 0.7119 next.
New Zealand's CPI report is due at 10:45 a.m. local time Tuesday.
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