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The world shares are nearing record highs due to simmering geopolitics

On?Friday global stocks were near record highs as tensions between the United States and other countries simmered. The dollar also held at a six-week peak as traders reduced their bets about Federal Reserve interest rate cuts. Gold, a safe-haven, fell in price, and oil prices recovered from a previous decline after U.S. president?Donald??Trump took 'wait-and-see' attitude toward Iran. He had earlier threatened to intervene. Since the beginning of the year, the markets have been dominated by international politics following Trump's actions in Venezuela and his threats to seize Greenland.

Michael Brown, Senior Research Strategist at Pepperstone said: "Although we seem to have dialled down the likelihood of U.S. Intervention in the Middle East, I don't believe we can completely rule it out."

US PUBLIC HOLIDAY MARKET ACTIVITY Brown stated that market participants might lack 'conviction' ahead of Monday's Martin Luther King Jr. Day U.S. Holiday.

He said: "I would not be confident if I were running a long-risk book or a short-crude one into a weekend of three days with the Middle East tensions going on."

The pan-European Stoxx 600 Index was flat after a record high on Thursday.

The CAC 40 in France was down 0.4%, lagging behind regional peers due to political uncertainty. French lawmakers were unable to reach an agreement on Friday, so the government postponed discussions about its budget for 2026.

U.S. Stock Futures point to a strong start on Wall Street. A week of earnings will be capped off by State Street's results. Tech-heavy indices in Taiwan.TWII, South?Korea.KS11 and Asia.KS11 reached all-time highs as stellar results.from Taiwanese semiconductor maker TSMC 2330.TW revived AI trade. U.S.-Taiwan trade agreement signed on Thursday reduces tariffs for many semiconductor exports and directs investment towards U.S. tech industry. It could also anger China. Tony Sycamore is a market analyst for IG. He said, "I think with the TSMC's report yesterday sounding so positive, it provided a much needed shot in the arms for those AI stocks that have been struggling in recent months on Wall Street."

TRADERS WATCH YEN INTERVENTION. The yen has grabbed the attention of currency traders after Japanese Finance minister Satsuki Katayama stated on Friday that Tokyo would not exclude any options for countering excessive volatility in foreign exchange, including coordinated interventions with the United States. Her comments slightly lifted the yen JPY=. After a report stating that Bank of Japan policymakers are considering raising interest rates earlier than expected, April is a possibility. The currency gained further.

Last, the dollar was down 0.3% to 158 yen. Investors are betting that a snap Japanese election could be held as soon as next month. This would lead to a greater fiscal stimulus by Prime Minister Takaichi. Dollar hovered around a six-week peak after U.S. Economic releases this week, including data showing that the number of Americans who filed new unemployment benefits applications unexpectedly dropped last week. The dollar =USD was at 99.28 against a basket currencies. This is close to the peak of 99.493 on Thursday, its highest level since early December. FRX/

The markets have priced in 20% of a Fed rate reduction in March. This is down from 50% about a month earlier. Prices on the oil market rose as supply concerns remained prominent despite the decreasing likelihood of an American military strike against Iran. Brent crude and U.S. West Texas Intermediate traded at just over 1% more. Gold XAU= spot was down by 0.12% to $4,609 per ounce. GOL/ (Reporting from Sophie Kiderlin and Rae Wee, in London; editing by Dhara Ranesinghe)

(source: Reuters)