Oil prices hit a two-week high on Monday. U.S. stock futures slid, but those in Asia charged higher as investors weighed the contrasting fortunes of the U.S. and the rest of the world.
The week is busy with central bank policy meetings, including the U.S. Federal Reserve. The market widely expects the Fed to keep rates on hold when its meeting concludes on Wednesday.
Over the weekend, the U.S. defense secretary stated that the country would continue attacking Yemen’s Houthis until they ended attacks on shipping. This news sent oil prices sharply higher in early Asia trade on Monday as investors worried about supply disruptions.
Brent and U.S. crude futures surged more than 1% in morning trade. Later, they pared some gains on the prospect of an imminent end to the Ukraine war, which could bring more Russian energy supplies back to Western markets.
U.S. President Donald Trump said he plans to speak to Russian President Vladimir Putin on Tuesday and discuss ending the war in Ukraine, after positive talks between U.S. and Russian officials in Moscow.
Brent futures were last up 0.61% at $71.01 per barrel. U.S. crude futures rose 0.63% to $67.60 a barrel.
Futures pointed to a positive open in Europe.
EUROSTOXX 50 futures gained 0.04%, DAX futures advanced 0.22%, and FTSE futures rose 0.15%.
European stocks and the euro have recently drawn support from Germany’s fiscal reset plan, spanning a 500 billion euro ($540 billion) fund for infrastructure and changes to borrowing rules.
The country’s parliamentary budget committee approved the bill on Sunday. The lower house of Germany’s parliament will vote on it on Tuesday, and the upper house will vote on Friday.
The euro was perched near a five-month high on Monday and last bought $1.0883.
Paul Mackel, global head of FX research at HSBC, said, “The idea of Germany’s fiscal loosening being more in the (euro)’s price will be assessed on Tuesday when the Bundestag votes on the package. It would be very (euro) negative if it fails to pass.”
Data from China on Monday showed retail sales growth quickened in January-February, a welcome sign for policymakers. However, joblessness rose and factory output eased.
Shares hardly reacted to the mixed data, as investors awaited a press conference later in the day from Beijing’s top planning agency and elsewhere for more details on measures to boost consumption.
The CSI 300 blue-chip index last traded 0.26% lower, while the Shanghai Composite Index gained 0.2%.
Hong Kong’s Hang Seng Index jumped 0.9%.
China’s State Council unveiled a slew of measures on Sunday, including increasing residents’ income and establishing a childcare subsidy scheme, aimed at boosting domestic consumption.
That came just days after the country’s financial regulator promised to properly relax consumer credit quotas and loan terms as it offers long-term backing to make available large sums.
Lynn Song, ING’s chief economist for Greater China, stated, “We think this year’s attention to boosting consumption, combined with last year’s relatively low base, will help consumption growth recover to mid-single-digit growth in 2025. Further upside would likely hinge on a sustainable recovery of consumption.”
The yuan was last firm at 7.2384 per dollar in the onshore market.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.9%, while Japan’s Nikkei advanced 0.93%.
While Asia stocks started the week on a strong note, futures pointed to a dour opening on Wall Street.
Nasdaq futures were down 0.71%, while S&P 500 futures fell 0.63%.
U.S. Treasury Secretary Scott Bessent said in an interview that aired on Sunday that there are “no guarantees” there will not be a recession in the United States. This added to investor worries of an impending economic downturn.
A week earlier, Trump had declined to predict whether the U.S. could face a recession amid concerns about his tariff salvo.
IG’s Sycamore said, “When you’ve got the top two – President Trump and his right-hand man in terms of economic affairs – refuse to rule out a recession, it does warn us that there’s more rocky times ahead.”
He added, “And it suggests to me that they’re willing to take this short-term pain for a longer-term win.”
Against a basket of currencies, the dollar languished near a five-month low at 103.72.
Investor nerves and angst over the unpredictability of Trump’s policies and their potential impact on U.S. growth have hampered the greenback, which has fallen more than 4% for the year so far.
The yen eased slightly to 148.85 per dollar. This occurred ahead of the Bank of Japan’s (BOJ) policy meeting this week, where it is expected to keep rates on hold, though most economists expect further policy tightening later this year.
Elsewhere, gold hovered near a record high and was last at $2,990.36 an ounce, having broken through the key $3,000 barrier for the first time on Friday as investors piled on to an historic rally in the safe-haven asset.
Click here to read more on Finance and Investing.