Global markets are currently grappling with the dual challenge of energy supply risk and policy uncertainty. Oil prices have recently surged, raising inflation concerns and prompting some tanker operators to reroute shipments.
Geopolitical volatility in the Middle East has sharply escalated in the past week, raising concerns over the security of the Strait of Hormuz, a chokepoint for 20–30 percent of global oil shipments. While a full closure remains unlikely for now, the conflict already pushed oil prices up more than 10 percent last week and led to higher shipping insurance costs
This comes as investors prepare for interest rate and policy decisions from the BoJ, U.S. Fed, Swiss National Bank, BoE, and People’s Bank of China. Market participants will pay close attention to central bank commentary this week for signals on rates, alongside economic data from China, the U.S., and the Eurozone.
GCC markets fall on regional tensions
The most recent report by Iridium reveals that Qatar led the GCC markets last week with a 0.6 percent increase, buoyed by strength in its banking sector.
In line with global market trends, Kuwait remained flat, while Bahrain gave back gains from the prior week. Oman broke its three-week winning streak, losing 0.8 percent, while Saudi Arabia was partially weighed down by losses in large-cap names, notably Al Rajhi Bank and Ma’aden.
In Abu Dhabi, markets dipped 1.8 percent, while Dubai posted the sharpest retraction in the region despite briefly reaching its highest levels since 2008 early in the week.
U.S. equities end multi-week winning streak
Internationally, U.S. equities ended their multi-week winning streaks. The Dow Jones saw the largest decline of 1.3 percent, followed by the Nasdaq Composite, which fell 0.6 percent, and the S&P 500, which lost 0.4 percent, as investor sentiment turned risk-averse following Israeli airstrikes on Iranian nuclear and weapons infrastructure.
In Europe, only the FTSE100 gained, while the DAX (-3.2 percent), STOXX600 (-1.5 percent), and CAC40 (-1.5 percent) all fell.
In the Asian stock market, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.36 percent today, while Japan’s Nikkei rose 1.12 percent. In addition, Hong Kong’s Hang Seng rose 0.29 percent and South Korea’s KOSPI Index gained 1.58 percent.
However, the Taiwan Weighted Index dipped 0.10 percent.
Read: Crude oil prices surpass $74.85 as Middle East tensions intensify
This week’s macro calendar
Global markets will await the release of key data and decisions this week, including:
- June 16: China Industrial Production (YoY) (May) and Italy Consumer Price Index (EU Norm) (YoY) (May).
- June 17: Japan BoJ Interest Rate Decision and U.S. Retail Sales (MoM) (May).
- June 18: U.K. Consumer Price Index (MoM) (May) and U.S. Fed Monetary Policy Statement.
- June 19:Â Switzerland SNB Interest Rate Decision and U.K. BoE MPC Vote Rate Hike.
- June 20:Â U.K. Retail Sales (MoM) (May) and Eurozone Consumer Confidence (Jun).
