European markets and US futures are trading mostly flat on Monday morning, while Brent crude remains above $100 and Asian markets bounce, as talks between Iran and the US stall.
Oil markets rose at the opening on Monday, as renewed uncertainty surrounding US–Iran diplomacy continued to fuel concerns, despite an extended ceasefire.
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At the time of writing, the price of Brent crude oil, the international benchmark, was up by 2.8% at $108 a barrel, making it 10% more expensive in a week.
The the same time, US benchmark WTI rose 2.5% to roughly $96.7 per barrel.
The uptick comes after a second round of US–Iran talks failed to make progress over the weekend.
On Saturday, the White House called off plans to send envoys to Pakistan for more negotiations. The US President argued that Tehran had failed to meet US demands and that uncertainty remained over the country’s leadership.
“If they want, we can talk, but we’re not sending people,” Trump stated on Sunday. He also said earlier on social media: “All they have to do is call!!!”
Meanwhile, continued Iranian missile activity has forced oil tankers to avoid the Strait of Hormuz, a key shipping route through which around a fifth of the world’s crude oil supply typically passes.
European stock markets were little changed on Monday morning, with both the Euro Stoxx 50 and the broader Stoxx 600 hovering close to the flatline as investors assessed the latest developments in US–Iran negotiations.
The UK’s FTSE 100 and France’s CAC 40 were both slightly down, but Germany’s DAX was nearly 0.2% up at the same time, and Italy’s FTSE MIB was gaining more than 0.2%.
US futures are all slightly in the red, with the tech-heavy Nasdaq faring the best by remaining nearly flat.
As investors continue to monitor developments in the Middle East, attention is turning to central banks this week, with key interest rate decisions due from the European Central Bank, the US Federal Reserve and the Bank of England.
All three central banks are expected to hold rates steady, but analysts will be scrutinising every word for clues on how long this restrictive stance will last, as the global economy remains tethered to the unpredictability of the Iran war.
Ultimately, the path of monetary policy for the remainder of 2026 continues to be dictated by a geopolitical situation that is unfolding far beyond the control of central bank governors.
Asia-Pacific markets mixed
Meanwhile, markets were mixed overnight in the Asia-Pacific region.
Tokyo's Nikkei 225 index hit a fresh record, surging 1.4% to 60,564, but has since pared most of the gains.
The Kospi in South Korea also jumped 2.1% to 6,617. Hong Kong's Hang Seng index edged 0.2% lower to 25,922, and the Shanghai Composite index was up 0.2% at 4,089.
Australia's S&P/ASX 200 slipped 0.3% to 8,759, but Taiwan's Taiex rallied over 3%, helped by a revival of tech share buyers driven by the boom in artificial intelligence.
As for currencies, the US dollar fell to 159.34 Japanese yen from 159.59, while the euro climbed to $1.1723 from $1.1701.
