The week's agenda discourages hasty decision-making, as policy meetings from the world's major central banks and a deluge of earnings from Wall Street's tech giants could define market momentum in the coming days.
In any case, attention remains focused on the Strait of Hormuz, which is virtually paralyzed for hydrocarbon traffic, amid conflicting reports regarding peace talks between the United States and Iran.
Although a ceasefire between Washington and Tehran has frozen the hostilities sparked by U.S. and Israeli strikes on Iran two months ago, markets are keeping a close watch on the strait, where oil and gas tankers have almost ceased to circulate.
Peace negotiations suffered a setback over the weekend when U.S. President Donald Trump canceled his envoys' trip to Islamabad. Nevertheless, investors found some relief in an Axios report suggesting that Iran is seeking to reach an initial agreement on reopening the strait while postponing nuclear negotiations.
Against this backdrop, Brent crude rose more than 2% to nearly 107.97 dollars per barrel, its highest level in three weeks. This move revived inflationary fears and led traders to virtually rule out any rate cuts in developed markets this year.
'The reaction in oil (Brent today +2% to 107 usd/b) points to the low credibility the market assigns to an agreement between the parties. If the U.S. agrees to unblock Hormuz now, Iran will have little incentive to later yield on the nuclear issue. Today Trump will convene his national security team to formulate a response,' Renta 4 analysts noted in their morning report.
Major central banks are widely expected to hold rates steady at this week's meetings. However, the tone of their statements could stir the markets: in both the eurozone and the UK (Thursday), investors are currently pricing in two 25-basis-point hikes before the end of the year.
Particular attention will be paid to the Fed meeting (with the announcement and press conference on Wednesday), which could be the last with Jerome Powell at the helm, while the Bank of Japan will be the first to deliver its verdict on Tuesday.
Meanwhile, semiconductor stocks rose in Asia, buoyed by optimism surrounding artificial intelligence, which will also take center stage during the Wall Street earnings season. Microsoft, Alphabet, Amazon, and Meta are set to report on Wednesday, followed by Apple on Thursday, in a week where the companies reporting represent 44% of the S&P 500's market capitalization. This enthusiasm follows Intel's surprise on Thursday with better-than-expected revenue guidance.
After losing 4.3% last week -- its worst performance since the first week of March -- the Spanish benchmark IBEX 35 was up 7.10 points, or 0.04%, at 17,698.40 points by 0702 GMT on Monday, while the FTSE Eurofirst 300 index of leading European shares edged down 0.01%.
In the banking sector, Santander lost 0.08%, BBVA gained 0.16%, Caixabank was NOT AVAILABLE, Sabadell rose 0.32%, Bankinter appreciated by 0.22%, and Unicaja Banco climbed 0.23%.
Among large-cap non-financial stocks, Telefónica fell 0.41%, Inditex advanced 0.38%, Iberdrola dropped 0.53%, Cellnex slipped 0.14%, and the oil major Repsol rose 0.48%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
