Last week, global markets were dominated by geopolitical tensions in the Middle East, as the U.S.–Israel conflict with Iran escalated. Investors fled to safe-haven assets, and oil prices surged sharply, with WTI crude rising 20 to 25 per cent, ending the week around $90 per barrel, one of the biggest weekly rallies in years.
The US dollar was the clear beneficiary, gaining broadly against most currencies. The US Dollar Index rose about 1.4 per cent, marking its strongest weekly performance in over a year. By contrast, EUR and GBP weakened, with EUR/USD briefly approaching 1.16 and GBP/USD falling to a 2.5-month low amid risk-off sentiment and dovish expectations from the Bank of England. JPY showed mixed performance, pressured by higher US yields, while among commodity currencies, the Canadian dollar outperformed, supported by the oil rally and strong domestic data. AUD and NZD were volatile, moving with shifts in global risk appetite.
In commodities, gold experienced its first weekly decline in five weeks, falling about 2.3 per cent to around $5,150 per ounce, while silver sold off more sharply, down roughly 9 per cent, correcting after earlier gains this year.
Equities were broadly lower. In the US, the S&P 500 fell roughly 2 per cent, the Dow Jones dropped 3 per cent, and the Nasdaq declined 1.2 per cent. European stocks were hit hardest, with the STOXX Europe 600 down 5.5 per cent, marking the steepest weekly drop in nearly a year.
Bond markets also sold off, with the US 10-year Treasury yield rising about 17 basis points to 4.15 per cent, reflecting inflation concerns triggered by higher energy prices.
In crypto, markets were mostly sideways to slightly lower. Bitcoin traded between $66,000 and $73,000, ending near $70,000, while Ethereum held around $1,900 to $2,000, with risk sentiment driving short-term volatility.
Looking ahead to this week, the key event is the US CPI report on Wednesday, alongside the Eurozone and German CPI. Later, traders will watch US jobless claims, Core PCE inflation, and University of Michigan consumer sentiment on Friday. Markets remain highly sensitive to oil price volatility and ongoing Middle East tensions, which could continue driving risk-off moves, dollar strength, and volatility across equities, commodities, and crypto.
In short, expect high volatility, sharp reactions to economic data, and continued focus on geopolitics as key drivers of the market.
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