OIL
The price of Brent oil dipped in early Monday trading, signalling a market reassessment of the perceived threats to oil supply arising from tensions between Israel and Iran. Over the past fortnight, the barrel's price had climbed as oil traders braced for anticipated retaliatory actions from Tehran, apprehensive that any Israeli countermeasure could escalate into a fully-fledged regional conflict, severely disrupting global oil flows. However, with Iran apparently content with its military response to the alleged Israeli strike on April 1, and Tel Aviv able to assert success in defending its territory, a window of opportunity emerges to mitigate the escalation of this conflict. Consequently, oil prices have receded as the markets collectively exhale, with the spectre of a significant supply crisis appearing less imminent.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European markets opened slightly higher on Monday as geopolitical tensions eased, while investors look forward to another batch of macro and corporate news this week.
Stability found its way through the markets after investors' hopes of a de-escalation regarding the conflicts in the Middle East were fueled by US President Joe Biden, who said he would not support any Israeli retaliation measure following the attack led by Iran this weekend.
Nonetheless, the situation in the Middle East remains one of the markets' uncertainty drivers while fears of a broadening conflict remain.
However, investors will likely switch their focus back to macro and corporate developments as the earnings season continues, with big names such as Bank of America, Morgan Stanley, Netflix, L'Oréal and LVMH publishing their Q1 results this week.
With the "higher for longer" interest rate narrative fully priced in, it will be interesting to see how company results affect market sentiment if they maintain resiliency to the current tight monetary environment.
The STOXX-50 trades just below the 5,000pts level, following a sharp rebound over 4,937pts, led higher by producer manufacturing and consumer durables shares.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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