Global Economy
European Markets Poised for Gains as Rate‑Cut Optimism Dampens Middle East Oil Risk
European equities are expected to open higher on Monday, buoyed by weaker US inflation data that eases expectations of a September Fed rate hike. At the same time, oil prices remain steadied as the stalemate between Iran and the United States keeps supply concerns in check, although regional tensions in the Gulf persist. Analysts from AMP predict oil to stay within a $70‑$100 range, while the market watches for any breakthrough in Middle‑East talks.
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European equities set for a lift
All major European bourses are projected to open in the green on Monday. Early futures show the French CAC 40 up about 0.15%, Germany's DAX up 0.25%, the UK FTSE gaining 0.21%, and the pan‑European Stoxx 600 edging 0.23%.
Oil stays put while Middle‑East talks stall
With no concrete progress between Iran and the United States, oil supplies remain constrained, keeping Brent near $88.47 per barrel (+0.06%) and WTI at $82.01 (-0.47%). Israeli strikes in southern Lebanon have added to regional volatility, killing at least 11 people.
Analyst view: oil range and risk factors
AMP economist Shane Oliver writes that oil is likely to hover between $70 and $100. Iran is expected to prevent prices from falling below the lower bound, while the United States would step in if prices breach $100.
He warns that a durable peace settlement is still uncertain, and a 10‑15% cut in Middle‑East crude flows could push prices higher as reserves dwindle.
US data eases rate‑hike worries
Last week’s US retail‑sales, consumer‑confidence and inflation reports have softened the market’s view on a September Fed rate hike. CME Group’s FedWatch tool now shows a 30% probability of a hike next month, down from 50% a week earlier.
Wall Street recap
- Dow Jones: –0.20% (‑107.58 points) to 53,732.41
- S&P 500: –0.17% (‑13.23 points) to 7,785.76
- Nasdaq Composite: –0.28% (‑73.86 points) to 26,729.16
Asian market snapshot
Tokyo’s Nikkei climbs 0.67% after a prior dip, while Chinese and Hong‑Kong shares rally on strong earnings from chip makers. Shanghai Composite +1.02%, CSI 300 +1.22%.
Bond and currency moves
U.S. 10‑year Treasury yields fall 1.2 bps to 4.6842%; the 2‑year drops 1.5 bps to 4.1563%.
The dollar slips 0.19% against a basket of peers, the euro gains 0.16% to $1.1587, and the pound rises 0.18% versus the dollar while holding steady against the euro.