In Asian Equity Markets indices fell on Monday following heightened geopolitical tensions in the Middle East. Japanese shares returned for their first day of trade with the benchmark Nikkei 225 declining 2.1% while the Topix index was down 1.77%. In South Korea, the Kospi index fell 1%. Hong Kong’s Hang Seng index was down 0.94%. In Australia, the ASX 200 was down 0.45%, with the heavily weighted financials subindex falling 1.23% as shares of major banks in the country declined. But, the energy sector rose 1.15%.
In Currency Markets the safe-haven Japanese yen hit a three-month high on Monday, while gold soared as increasing tensions between Iran and the United States sent investors scurrying to less risky assets. The United States detected a heightened state of alert by Iran’s missile forces, while President Donald Trump warned of a “major retaliation” if Iran hit back. The yen, regarded as a haven in times of market turmoil by virtue of Japan’s status as the world’s biggest creditor, rose 0.3% to 107.82 per dollar early in Asian trade, its strongest since October 2019.
In Commodities Markets oil prices jumped more than 2% higher on Monday, with Brent rising above $70 a barrel, after U.S. President Donald Trump issued a threat to impose sanctions on Iraq amid escalating tensions with Iran in the Middle East. Brent crude futures jumped to a high of $70.27 a barrel, up $1.67, or 2.4%, from Friday’s settlement. U.S. West Texas Intermediate crude was at $64.39 a barrel, up $1.34, or 2.1%, after touching $64.44 earlier, the highest since April.
In US Equity Markets indices fell from a record high on Friday after a U.S. air strike in Iraq ratcheted up tensions in the Middle East, while a bigger-than-expected contraction in the U.S. manufacturing sector again fanned fears of slowing economic growth. The S&P 500 was down 14.10 points, or 0.43%, at 3,243.75. The Nasdaq Composite was down 33.40 points, or 0.37%, at 9,058.79. Meanwhile, oil prices jumped about 2%, denting shares of American Airlines Group Inc and Southwest Airlines Co . Meanwhile, Tesla Inc shares hit a fresh record high after beating estimates for vehicle deliveries in the fourth quarter.
In Bond Markets U.S. Treasury yields fell sharply on Friday on safety buying after a U.S. air strike killed Iran Quds Force chief Qassem Soleimani, increasing tensions between the two countries. The Pentagon said on Thursday that Soleimani was actively developing plans to attack Americans in Iraq and the Middle East. Benchmark 10-year note yields were last at 1.799%, after falling as low as 1.788%, which was the lowest since Dec. 12. They closed at 1.882% on Thursday.