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Markets Celebrate MOU on SoH with MORNING BID EUROPE
Wayne Cole gives us a look at what the day will bring for European and global markets. The markets had suspected that President Trump would want to 'end the war on his birthday. And so it was. U.S. and Iranian officials announced on Sunday that they had reached an agreement on a framework for ending their 'war, halting the U.S. Blockade of Iran, and reopening the Strait of Hormuz. However, the fate of Iran’s nuclear program is still up for further negotiation. When the initial agreement is signed on Friday, the strait should be fully open. Its status is not clear. Trump said the strait will be toll free, but Tehran claimed it would control this vital waterway with Oman. A toll would undermine international law's freedom of the seas principle, which is fundamental?to global trade and supply chains. If Iran controls the strait then who is to say that the Strait of Gibraltar, the Strait of Malacca, Bab el-Mandeb or the Taiwan Strait could not be tolled in the future? It is also unclear whether shipowners would risk their vessels without protection in the strait, or what insurance costs might be. It is not clear when or if transits will return to their?daily 138 average seen before the war. The state of the oil and liquefied gas facilities which have been damaged is also an open question. The progress is enough for now to ignite a risk-on rally, with U.S. share futures and European stock futures both up at least 1%. Japanese and South Korean stocks jumped over 5%, as a Brent drop of 5% offered relief to net energy importers. The drop in oil, if sustained, would reduce the inflation risk and the need for interest rate hikes. The yield on ten-year Treasury bonds fell six basis points, to a new low for a month. Fed fund futures rose as 8 basis points were removed from the tightening of interest rates next year. Oil prices could also help the doves, including the Fed's chair Kevin?Warsh who wants to maintain the easing bias, gain more influence on the board. According to comments made by many FOMC members, dropping the bias and moving to neutral remains a risk at their meeting this coming week. This week, central banks will also meet in the UK and Japan as well as Australia, Switzerland Sweden, Norway, Russia, and Switzerland. The FOMC members have all commented that dropping the bias to neutral is a real risk. The Russian meeting on Friday is going to be closely monitored as Elvira Nabiullina, the Governor of Russia hasn't been seen publicly in a few weeks. This has sparked speculation about her future. Analysts credit Nabiullina for keeping the Russian economy afloat during the Ukraine War and her absence will 'test the market faith in the System. Market developments on Monday that may have a significant impact G7 Summit begins in Evian les Bains, France ECB President Christine Lagarde's keynote speech, pre-recorded. Piero Cipollone, ECB member and board member, will be appearing. - EU Trade, Industrial Output for April Empire Manufacturing survey June - US industrial production for May
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Indian stocks join global rally for Gulf Peace Deal
Indian shares rose on Monday, following a global rally. Oil prices fell after the U.S. announced that an initial agreement had been reached between the U.S., Iran, and the United Nations to end the war, and resume 'traffic' through the Strait of Hormuz. Shehbaz Sherif, the Pakistani Prime Minister, who served as a facilitator in these negotiations, announced that the countries would sign a Memorandum of Understanding in Switzerland this Friday. As of 9:43 a.m. IST, the benchmark Nifty 50 index was up 1.39% to 23,954, while the BSE Sensex gained 1.43%, reaching 76,605.4. Brent crude fell 4.7%, to $83 per barrel, its lowest price since March. The lower oil prices are good news for India. It is the third largest oil importer in the world. They help to ease the pressure on the rupee, inflation and India's trade deficit. Bajaj Broking stated in a report that "the sudden removal of supply threats across?major oil pipeline has firmly shifted global sentiment back into aggressive risk-on mode." It added, "We expect the Nifty 50 index to continue its positive trend and move towards levels of 24,050." Two analysts believe that a complete resolution to the Middle East conflict would help boost foreign inflows, after sales records of $30.7 billion were achieved in 2026. Monday, 14 of 16 major sectors showed gains. Small-caps and midcaps both rose by 1.5%. HDFC Bank, which is the most heavily-weighted stock on the benchmarks, rose 2%, leading gains. Nomura also said that Reserve Bank of India’s new NRI Deposit?scheme may be a positive development for the lender, as it could help to attract more long-term deposits in foreign currency, improve liquidity and ease the pressure on margins. Infrastructure giant?Larsen & Toubro gained 3.2%. Oil marketing companies, tyre manufacturers, paint makers, and airlines all reacted to the drop in crude oil prices.
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Mongolia, a coal-rich country, aims to increase trade with China despite the risk of dependence
Mongolia hopes to increase trade with China by more than 10% this year, as it is the largest destination for its coal and mineral exports. This will help further strengthen its economic dependence on China. The two-way trade is expected to reach $20 billion this year, Ukhnaa Khuraelsukh, the President of Mongolia, told Wang Yi, Chinese Foreign Minister, during his first visit to Ulaanbaatar over the weekend. This is a rise of over 10% from 2025 despite the Iran War limiting the economic outlook of?the second largest economy in the world at a time when domestic demand has been stagnant. Chinese customs data show that two-way trade dropped to $17.7 billion last year, from $18.3 in 2024. In a statement issued on Monday, the neighbours committed to boosting economic and trading ties but did not specify a specific goal for trade. According to estimates from international organizations, every 1% increase in the?China economy can lead to a 4% increase in Mongolian exports, and a 0.6% boost in its economic growth, Wang said at a Saturday press conference after meeting with his Mongolian counterpart. "The trade momentum has been quite positive," said Xu Tianchen senior analyst at Economist Intelligence Unit. "China is ready to accept the increasing copper production in Mongolia." He said that China's coal demand is likely to grow after the mining disaster in northern Shanxi killed 82 workers, placing pressure on domestic coal supply. Data from Chinese customs shows that Mongolia, a landlocked country sandwiched in between China and Russia, shipped more than 80 millions metric tons (tonnes) of coal last year. Wang stated that a second railway link will boost connectivity between the two countries. "All eyes are on the ?completion of the Gashuunsukhait-Gantsmot border crossing railway, which will facilitate trade even further," added Xu. Wang announced that China would supply 1,000,000?doses? of vaccines to Mongolia in order to combat a recent outbreak?of foot-and-mouth?disease?in its livestock. Khurelsukh said that as the relationship between China and Mongolia grows, Mongolia will refrain from taking any action that would harm China's interest, irrespective of its relations with other countries. (Reporting and editing by Clarence Fernandez; Xiuhao chen, Ryan Woo)
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Indian stocks join global rally over Gulf peace deal and oil slide
Indian shares rose a little higher at the opening of trading on Monday. They were following a global rally as oil prices fell after U.S. President Donald 'Trump'?and Iran’s deputy foreign minister announced an initial agreement to end the conflict and resume traffic in the Strait of Hormuz. Shehbaz Sherif, Pakistani Prime Minister, who served as the'mediator in these negotiations, announced that on Friday they will sign a Memorandum of Understanding in Switzerland. As of 9:15 a.m., the benchmark Nifty rose by 1.53% to 23984.85, and?the BSE Sensex increased by 1.59% to 76,725.27. IST. The Nifty and Sensex gained about 2% each and 2.3% respectively on Friday, as the optimism of a diplomatic victory in the U.S. Iran war that lasted four months boosted risk appetite. Brent crude fell 4.6%, to $83 per barrel, its lowest price since March. The lower oil prices have a positive impact on India, the world's third largest oil importer. They help to ease the pressure on the rupee, inflation and India's trade deficit. All 16 major sectors rose. Small-caps and midcaps both rose by?1.6%. The oil marketing companies, tyre and paint manufacturers, as well as airlines, have also taken advantage of the drop in crude price.
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Gold gains continue after US and Iran peace agreement
Gold prices rose by more than 2% after U.S. officials and Iranian officials announced that they had reached a preliminary agreement to end the war. This lowered oil prices and eased concerns about inflation and rising interest rates. Gold spot rose 2.5%, to $4,322.87 an ounce, by 0312 GMT. This was its highest level since the 9th of June and extended gains for a 3rd straight session. U.S. Gold Futures for August?delivery increased 2.5% to $4344.80. U.S. officials and Iranian officials announced on Sunday that they had reached an agreement on a framework for ending?their conflict, stopping the U.S.-led blockade of Iran, and reopening the Strait of Hormuz. Shehbaz sharif, the Pakistani prime minister, said on X that a pact would be signed?on a Friday in Switzerland. The U.S. Dollar fell to its lowest level in 10 days, making greenback-priced gold cheaper for holders of other currencies, while oil prices dropped more than 4%. Tim Waterer is the chief market analyst for KCM Trade. He said that lower oil prices and a softening dollar due to reduced geopolitical risks and the reopening of Strait of Hormuz are helping to reduce inflation expectations. The combination of the two has provided the precious metals with the best tailwind over the past few weeks. However, the sustainability will depend on the durability of the peace agreement. Since the start of the U.S./Israeli war on Iran, in late February, gold prices have dropped by about 20%. Global oil prices have risen sharply since the Strait of Hormuz was effectively closed. This has stoked inflation fears and raised expectations that interest rates will remain high for longer. Bullion is a non-yielding investment and therefore loses its appeal in a high interest rate environment. According to CME FedWatch, the markets have reduced their expectations of a U.S. interest rate increase in December from 69% to 48% following?the peace agreement, down significantly from last week's 69%. Investors are now awaiting the Federal Reserve's policy announcement and remarks on Wednesday. Rates are expected to remain the same. "Currency debasement fears, fiscal risks and the ongoing geopolitical fracture continue to support?long-term (demand for gold). OCBC stated in a report that a moderated energy-driven inflation could help these themes gain traction. Spot silver increased 3.6%, to $70.39 an ounce. Platinum gained 3.3%, to $1773.70, and palladium rose 3.3%, to $1324.75.
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Indian shares to rally in support of Gulf peace agreement and oil slide
Indian shares will open higher on Monday as they track a global rally. Oil prices, however, have fallen after U.S. president Donald Trump?and Iran’s deputy foreign minister announced an initial agreement to end the war and resume traffic through Strait of?Hormuz. Shehbaz Sherif, the Pakistani Prime Minister, who served as a facilitator in these negotiations, announced that the countries would sign a Memorandum of Understanding in Switzerland this Friday. As of 7:38 am IST, the GIFT Nifty Futures were trading at 23983.5. This means that Nifty 50 will open 1.5% above Friday's closing price of 23,622.90. The Nifty and BSE Sensex rose by about 2% and 2.3% respectively on Friday, as the optimism of a diplomatic break in the U.S./Iran four-month war boosted risk appetite. Other?Asian stocks jumped 2.4% while Brent crude fell 4.1% to $84. A barrel, which is the lowest price since March. The lower oil prices have a positive impact on India, which is the third largest oil importer in the world. They help to ease the pressure on the rupee, inflation and India's trade deficit. The diplomatic resolution of the Middle East has reduced geopolitical risks, and this is particularly beneficial for India as it reduces inflationary pressures, improving the macroeconomic outlook, said Pravesh Gour, senior technical analyst with Swastika Investmentmart. According to NSE data, foreign portfolio investors sold Indian stocks worth 10,82 billion rupees (113.77 millions) on Friday, while domestic institutions bought shares worth 53.41 trillion rupees. FPIs sold a record amount of $30.7 billion in the past year. This was due to pressure from the Iran War and the limited exposure they had to the AI rally. Analysts said a resolution of the Middle East conflict would help boost foreign outflows. Since the beginning of the Iran War in late February, both the Nifty and Sensex are down 6.2% and 7.1% respectively. Watch Stocks to? The oil marketing companies, tyre and paint manufacturers, and airlines may benefit from the drop in crude price ** Dr. Reddy announces the first-to-market release of Bosulif in the U.S. Aurobindo Pharma reports that the U.S. Drug regulator has classified its Telangana manufacturing plant, Eugia Pharma as "official actions indicated" with 11 observations following its inspection. ($1 = 95.1000 Indian Rupees). (Reporting and editing by Bharathrajeswaran, Bengaluru.
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Gold prices rise 2% following US-Iran peace agreement
Gold prices rose by 2% on Monday, after U.S. officials and Iranian officials announced they had reached an?understanding to end their conflict. This lowered oil prices and eased concerns over inflation and interest rates. As of 0122 GMT spot gold rose 2% to $4,304.11 an ounce, its highest level since the 9th of June. U.S. Gold Futures for August Delivery rose 2% to $4325.20. U.S. officials and Iranian officials announced?on Sunday that they had reached an agreement on a framework for ending their war, stopping the U.S.-led blockade of Iran and reopening the Strait of Hormuz. In a recent post on X, Pakistani PM?Shehbaz sharif stated that the pact would be signed in Switzerland on Friday. The U.S. Dollar fell to its lowest level in 10 days, making bullion priced in greenbacks cheaper for holders of other currencies, while oil prices dropped more than 4%. Tim Waterer is the chief market analyst for KCM Trade. He said that lower oil prices, a softer dollar and reduced geopolitical risk, as well as the anticipated reopening of Strait of Hormuz are all helping to reduce inflation expectations. The combination of the two has provided the precious metals with the best tailwind in the last few weeks. However, the sustainability will depend on the durability of the peace agreement. Since the U.S. and Israel war against Iran began in late February, gold prices have dropped by about 20%. Global oil prices have risen sharply since the Strait of Hormuz was effectively closed. This has stoked inflation fears and raised expectations that interest rates will remain higher for longer. Gold, though traditionally viewed as an inflation hedge in high-interest-rate environments, loses its appeal as the opportunity costs of holding this?non yielding asset increase. According to CME FedWatch, the markets have reduced their expectations of a U.S. rate increase in December from 69% to 47% following the peace agreement. This is down from 69% the week before. "Currency debasement fears, fiscal risks, and geopolitical fragmentation are still driving long-term demand for?gold". OCBC stated in a report that a moderated energy-driven inflation could help these themes gain traction. Spot silver increased 3.1%, to $70.07 an ounce. Platinum rose 3.1%, to $1.771.27, and palladium rose 3.3%, to $1.325.76.
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Singapore introduces central bank gold vaulting services and an OTC gold clearing system
Singapore is establishing an over-the counter gold clearing system and introducing central bank gold vaulting services. This comes as the city state looks to establish itself as a gold trading hub. Gan Kim Yong, the Deputy Prime Minister, told the Asia-Pacific Precious Metals conference on Monday that the Singapore Exchange will?establish a gold clearing system over-the-counter for Loco Singapore or physical gold in Singapore by the end this year. He said that six banks will be clearing members: DBS, Deutsche Bank ICBC Standard Bank J.P. Morgan OCBC, UOB. Gan stated that the Monetary Authority of Singapore (MAS) will offer central bank vaulting services in October to give foreign central banks and sovereign entities a safe option to store gold reserves. Gan stated that this strengthened Singapore's position as a jurisdiction in which reserve assets could be held securely, managed actively, and connected to wider market liquidity during Asian Trading Hours. He said that the SGX was also looking into a gold futures contract which would improve price discovery and risk-management in Loco Singapore. The MAS is removing a 5% limit on investment in precious metals as part of 'tax incentive schemes' for family offices and funds that qualify. Changes were made by a working group that was formed earlier this year. They are part of a series moves taken by local banks in order to "broaden" gold trading, as well as other financial centers looking to expand their gold services. Reports in May indicated that the Hong Kong Exchanges and Clearing was also planning to relaunch futures for gold, as the city strives to become a global hub for gold trading. DBS, Singapore’s largest?bank based on assets, announced last week that it would offer tokenised gold to retail customers. Meanwhile, OCBC, a competitor, has said they will allow institutional and private banking clients to buy, sell, and store gold in Singapore. (Reporting and editing by John Mair; Reporting by Jun Yuan Yong)
Indian stocks join global rally for Gulf Peace Deal
Indian shares rose on Monday as they tracked a?global rally. Oil prices fell after the U.S. announced that it had reached an initial agreement with Iran to end the?war? and resume?traffic through?the Strait?of Hormuz.
Shehbaz Sherif, the Pakistani Prime Minister, who served as a facilitator in these negotiations, announced that the countries would sign a Memorandum of Understanding in Switzerland this Friday.
As of 10:02 am IST, the benchmark Nifty 50 index was up 1.45% to 23,964 while the BSE Sensex?added a further 1.54% to reach 76,679.37.
Brent crude fell 4.7%, to $83 per barrel, its lowest price since March.
India is the third largest oil importer in the world. Lower oil prices help to ease the pressure on the rupee, inflation and the country's trade surplus.
The Indian economy and stock markets have improved prospects with the arrival of peace in West Asia, according to VK Vijayakumar. Chief investment strategist at Geojit Investments.
The 10-year bond yield in India fell to its lowest since March 25. Meanwhile, the rupee rose 0.52% at 94.6100 to the dollar.
Vijayakumar stated that foreign portfolio investors were unlikely to continue selling Indian stocks, despite the fact that the AI trade was still strong, especially in South Korea and Taiwan.
So far in this year, FPIs have sold a record amount of domestic equity worth $30.7 billion.
Fourteen out of the 16 major sectors grew. Small-caps and midcaps rose 1.6% and 1.4% respectively.
HDFC Bank, which is the most heavily-weighted on the benchmarks, rose 2%, leading gains.
Larsen & Toubro gained 3.3%. The company has a?significant revenue exposure in the Middle East.
Oil marketing companies, tyre manufacturers, paint manufacturers, and airlines all jumped at the drop in crude oil prices.
(source: Reuters)