Crude oil benchmarks are set for weekly gains of over 5%, as ongoing military exchanges between the U.S. and Iran stoke supply fears, offsetting concerns that rising inflation could dampen global demand.
A series of military strikes between the United States and Iran in the critical Strait of Hormuz has injected fresh volatility into energy markets. The escalation adds another layer of geopolitical risk for investors already navigating inflation concerns and a turbulent tech sector.
Russia is using inexpensive, fiber-optic-guided drones to circumvent Ukraine's electronic warfare systems and destroy critical components in heavily defended electrical substations, according to open-source analysis.
The International Energy Agency projects global oil demand will fall by 1 million barrels per day this year, the first annual drop since the pandemic, citing severe supply disruptions from the conflict in the Middle East.
Iran's Islamic Revolutionary Guard Corps (IRGC) navy has closed the critical Strait of Hormuz shipping lane until further notice, according to state media, a move poised to disrupt global oil supplies.
Yields on benchmark U.S. government debt fell as investors assessed a much weaker-than-expected June payrolls report, shifting focus to Wednesday's release of the Federal Reserve's latest policy meeting minutes.
The British pound traded flat against a resilient U.S. dollar on Monday, as currency markets looked past last week's soft jobs report and focused on the upcoming release of potentially hawkish Federal Reserve meeting minutes.
The South African rand held steady against the dollar as currency traders awaited the release of U.S. Federal Reserve meeting minutes for guidance on future interest rate policy. The currency is trading in a narrow range amid a light domestic economic calendar.
According to Deutsche Bank, yield is the primary driver of foreign exchange markets this year, with carry trades expected to continue performing well amid a stable global economy.
