Stocks Struggle for Direction as Energy Prices Rise – Europe Market Wrap
Oil extended its upward run to the longest streak in a month, while equities moved sideways amid limited progress on reopening the Strait of Hormuz. The yen edged higher after the Bank of Japan left its policy rate unchanged in a split decision.
Brent crude rose 1% to above $109 a barrel, marking a seventh consecutive day of gains and lifting prices to a three-week high. The White House said US officials were reviewing Iran’s latest proposal but reiterated that key “red lines” remain in place for any agreement to end the eight-week conflict.
The yen strengthened 0.3% to around 159 per dollar, while Japanese government bonds were mixed after policymakers voted 6-3 to keep rates unchanged. The outcome increased expectations of a potential rate hike in June to above 70%, with investors awaiting comments from Governor Kazuo Ueda later in Tokyo.
Rising oil prices and several major risk events later this week dampened appetite for equities. The MSCI Asia Pacific index was little changed, hovering near levels seen when the conflict began in late February. Technology stocks outperformed, with South Korean equities climbing 1% and overtaking the UK to become the world’s eighth-largest stock market.
This week also features policy decisions from major central banks, including the Bank of Japan, Federal Reserve, European Central Bank, and counterparts in the UK and Canada — collectively shaping monetary policy for roughly half the global economy.
While markets widely expect rates to remain unchanged, investors will be watching closely for signals from policymakers such as Jerome Powell and Christine Lagarde on whether rising energy costs linked to the conflict could fuel inflation pressures.
