GLOBAL MARKETS: Stocks edge up in Asia, oil flat amid Middle East uncertainty

SYDNEY – Asian markets edged higher on Monday, while oil prices were largely unchanged, as investors took cautious comfort from signs of uneven progress in easing Middle East tensions. The trading week opened with a heavy slate of corporate earnings and key economic data ahead.

President Donald Trump said the United States would begin efforts on Monday morning to help free ships stranded in the Strait of Hormuz, though he did not provide details of the plan.

A statement from U.S. Central Command said the support would include guided-missile destroyers, more than 100 land- and sea-based aircraft, and around 15,000 service members.

Iran earlier said the United States had responded to its 14-point proposal via Pakistan and that it was reviewing the reply. However, Trump said the proposal was unlikely to be acceptable.

Oil prices held steady after early volatility. Brent crude futures were flat at $108.30 per barrel after earlier falling more than 2%. U.S. crude futures were also unchanged at $102.01.

Traders noted that a bulk carrier had reported being attacked by multiple small craft while transiting near Iran’s Sirik area on Sunday. It remained unclear how many vessels would attempt to pass through the Strait of Hormuz even with naval protection in place.

In equity markets, a public holiday in Japan kept trading thin. Nikkei futures rose modestly to 59,630 compared with a cash close of 59,513. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6%, while South Korea’s benchmark index surged 2.6% after returning from holiday.

European futures were slightly higher, with EUROSTOXX 50 and DAX futures both up 0.1%, while FTSE futures slipped 0.4%.

U.S. stock futures were mostly unchanged as investors prepared for a packed week of earnings, with more than 100 S&P 500 companies scheduled to report. Among the major firms due to release results are Advanced Micro Devices, Super Micro Computer, Palantir Technologies, Walt Disney, and McDonald’s.

Analysts noted that S&P 500 earnings per share growth is currently running at 25%, or about 16% when adjusted for one-off gains. However, they said the market reaction to earnings beats has been unusually muted.

Despite strong corporate performance, analysts at Goldman Sachs said elevated energy prices and geopolitical uncertainty had not yet significantly weakened corporate guidance. Still, they noted that the reward for earnings beats has been relatively small this quarter.

CENTRAL BANKS SIGNAL INFLATION CONCERNS

Market attention also remained focused on inflation risks, with rising energy costs contributing to higher bond yields and renewed pressure on equity valuations. Several major central banks have also shifted toward a more hawkish policy stance.

Market pricing now reflects only around 2 basis points of Federal Reserve easing by year-end, down from 11 basis points a week earlier. Expectations for the European Central Bank have risen to 76 basis points of tightening, while the Bank of England is priced at around 63 basis points.

Australia’s central bank is expected to meet on Tuesday, with markets widely anticipating a third consecutive interest rate hike as it continues to battle persistent inflation.

Looking ahead, the U.S. payrolls report for April, due on Friday, will be a key focus for investors. Economists expect an increase of around 60,000 jobs, following March’s stronger-than-expected gain of 178,000, although seasonal adjustment challenges have added uncertainty to forecasts. Citi analysts, however, are projecting a possible decline of 15,000 jobs and a rise in unemployment to 4.3%.

CURRENCIES AND COMMODITIES

In currency markets, the U.S. dollar weakened slightly as investors monitored developments in the Middle East and the potential reopening of the Strait of Hormuz.

The dollar fell 0.1% to 156.94 yen, still reflecting the impact of suspected intervention by Japanese authorities last week, which analysts estimate may have totaled around $35 billion.

The euro was steady at $1.1723, while the British pound held at $1.3575 ahead of upcoming local elections in the United Kingdom, where the ruling Labour Party is expected to face losses.

In commodities, gold eased 0.2% to $4,603 per ounce, remaining within recent trading ranges as investors balanced geopolitical risk against broader market sentiment. -Reporting by Wayne Cole;/Reuters -