- US stocks clawed back losses in which markets initially returned from the weekend in escalation mode after the US and Iran failed to reach an agreement, with equity futures lower, oil surging, and Treasuries under pressure. However, sentiment improved throughout the session on reports that talks remain ongoing and progress is being made, with the possibility of another in-person meeting before the ceasefire expires. As such, equities pared initial losses, with the Russell outperforming, while the Dow lagged amid weakness in Goldman Sachs (GS) following softer FICC trading revenues, while oil prices settled higher but well off overnight peaks, and Treasuries reversed earlier losses to close firmer.
- USD is broadly weaker as US-Iran talks have seemingly continued despite the initial failure over the weekend. DXY initially started the week firmer as flight to quality arose from failed diplomacy efforts and Trump’s plan to blockade the Strait of Hormuz; however, weakness gradually followed on numerous positive headlines. Axios reported that a senior American official said talks between the US and Iran are continuing even now, and there is progress in trying to reach an agreement. Regarding the main sticking point, nuclear, disagreement reportedly remains with the US wanting a longer moratorium on uranium enrichment than the Iranians. Additionally, the US seeks for Iran to remove all highly enriched uranium, while the Iranians instead want a "monitored process of down-blending".
- Looking ahead, highlights include New Zealand Net Migration, Singapore GDP, Australian Westpac Consumer Sentiment & NAB Business Confidence, Chinese Trade Data, MAS Policy Decision, Supply from Japan, Indian Holiday Closure.
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