Markets tread cautiously as central bank meetings and geopolitical risks loom

Crude oil fell roughly 2% to around US$114.6 following news that Qatari mediators were in Tehran to help ease regional tensions alongside the United States. Brent futures had jumped 6.2% the week before, reaching their highest weekly close since mid-2022 after Houthi strikes on Saudi oil infrastructure and an airport, though Riyadh has not confirmed the attacks. Global equity markets were mixed: MSCI’s All-World index ticked higher after a near-1% drop last week, and Europe’s STOXX 600 rose 0.4% driven by energy-sensitive sectors.

Market participants face a “formidable” mix of mega-cap earnings, AI funding worries, semiconductor results, five major central-bank meetings and potentially market-moving inflation and growth data, according to research heads. The New Zealand Reserve Bank is expected to raise rates, while markets price in a high probability of a Fed rate hike in December and similar moves by the Bank of Japan and European Central Bank. Key US data on core inflation and GDP growth are also due, with analysts noting that higher oil futures could heighten inflation concerns for policymakers.