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The wrong kind of 'boom to start the week'

What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets

After a long holiday weekend in the United States, and other countries, markets were ready to celebrate signs that a peace plan with Iran was close to agreement. World crude prices fell nearly 7% on Monday, to below $100 a barrel. According to reports, the peace plan being discussed would include a 60-day extension of ceasefire and an eventual reopening of Strait of Hormuz. The news of the latest U.S. strikes against Iranian targets overnight exacerbated doubts about how quickly a final document could be agreed.

Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.

Wrong kind of 'boom' to start the week news? Fresh U.S. strike on Tuesday described as defensive by Washington saw oil reverse some losses from the previous day, with Brent crude increasing about?3%, but remaining below $100 a barrel. Stocks were mixed with European shares wobbly, and Wall Street futures showing a positive trend. This came after Monday's rally, which saw European?shares soar and Japan's Nikkei reach a new record high. Markets seem to believe that a deal will be reached soon, despite the fact that U.S. president Donald Trump added a condition that regional countries normalize their relations with Israel. Marco Rubio, the Secretary of State, also warned that negotiations with Iran might "take a couple days". Tuesday may not be as booming a start to the week that many expected. The day's economic data will be dominated by the U.S. Consumer Confidence readings for the month of May. The report will be closely monitored, given that the University of Michigan equivalent survey has reached a new low.

The rest of the week will be dominated by inflation updates. As long as gas prices are high, the news won't be calming for the rates markets. Christopher Waller, a former dovish Federal Reserve Board member, said on Friday that he would join other policymakers in voting to remove language in the Fed's most recent policy statement which indicated an apparent "easing" bias. At the swearing-in of Fed Chair Kevin Warsh on Friday, Trump took a more ambiguous stance on Fed policy. He said Warsh was free to make whatever decision he thought best. Fed futures price in 'at least one rate increase over the next 12 months, and central banks from the euro zone and Japan will likely raise rates as early as next month.

Chart of the Day The chipmaker stock frenzy has been boosted in China after tech giant Huawei Technologies announced that it will produce industry-leading semiconductors with a new technology within five years. This news highlights Beijing's efforts in neutralizing U.S. restrictions that made it difficult for China to manufacture cutting-edge semiconductors.

As HK markets reopened on Tuesday after a long holiday, an?index tracking Hong Kong listed chipmakers surged 6%. This was led by Hua Hong Semiconductor & Semiconductor Manufacturing International Corp.

Watch today's events

* U.S. consumer confidence in May (10 a.m.?EDT).

* U.S. 2-year note auction (1 p.m. EDT)

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(source: Reuters)