As fears of war in the Middle East subside, stock prices rise and oil falls. By Reuters

mark jones

LONDON (Reuters) – Europe’s main stock and currency markets started the week slightly higher while crude oil and bond prices fell as investors curbed concerns about the Middle East after Iran’s weekend attack on Israel.

Tehran’s attack included more than 300 missiles and drones and was the first attack on Israel from another country in more than 30 years, but Monday’s market moves had an element of relief after Friday’s sharp selling and major powers calling for restraint. I showed it.

Oil prices, which rose 10% last month as tensions rose, fell 1% despite being led by defense stocks, while prices in Israel rose 1% and pan-European rose 0.3%.

Gold, which has been hitting record highs for several weeks, rose 0.3%, but the dollar and ultra-safe government bonds (GVD/EUR), which money managers often turn to when geopolitical tensions rise, both fell.

Robert Alster, chief investment officer at Close Brothers Asset Management, said he was hopeful diplomatic efforts by the U.S. and the Gulf could now prevent a serious escalation in Middle East troubles.

“There is a general belief (among investors) that the uptick will not extend,” Alster said, noting that oil prices have not surpassed the September high of $96 a barrel. “There was an argument and now hopefully we can move on.”

There’s also a busy week ahead of us with economic data and corporate earnings, as well as the International Monetary Fund’s (IMF) spring meeting, which could drive the global narrative.

One of these data points is later US retail sales. The , which measures the currency against a basket of six other currencies, held steady at 105.92, just below Friday’s 5-1/2-month high of 106.11.

However, it hit a 34-year high against the Japanese yen amid growing expectations that U.S. interest rates will remain high for longer due to sticky inflation and that Japan is not yet rushing into the FX market.

wait and see

U.S. stock futures rose after heavy selling on Wall Street on Friday, helped by lower expectations of interest rate cuts and disappointing bank results. (.N)

MSCI’s largest index of Asia-Pacific shares outside Japan fell as much as 0.7% overnight despite uncertainty gripping the region. Australia was down 1%;

Open war between Middle East adversaries Iran and Israel and threats to involve the United States have left the region in trouble. US President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu that the US would not participate in a counteroffensive against Iran.

“The campaign is not over yet,” Israel said.

Oil prices showed traders had largely priced in Iran’s retaliatory attacks, which could lead to stricter sanctions on Iranian oil. Last week, futures prices hit a high of $92.18 per barrel, the highest since October.

Monday’s 1% decline took Brent crude below $90 a barrel, U.S. West Texas Intermediate crude futures remained just below $85 a barrel, and gold was slightly higher at $2,351 an ounce. (or)

“It’s now for the markets to watch to see how Israel reacts and how Iran’s proxies react,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.