Oil climbs on Iran tensions, stocks edge back from seven-week highs

By Lewis Krauskopf NEW YORK (Reuters) - Oil prices added to recent gains on Friday on fears any U.S. military attack on Iran would disrupt flows of crude from the Middle East, while a gauge of global stock markets edged back from seven-week highs following a run-up spurred by optimism over monetary policy. Gold prices rose to near six-year highs.

Reuters June 22, 2019 02:06:01 IST
Oil climbs on Iran tensions, stocks edge back from seven-week highs

Oil climbs on Iran tensions stocks edge back from sevenweek highs

By Lewis Krauskopf

NEW YORK (Reuters) - Oil prices added to recent gains on Friday on fears any U.S. military attack on Iran would disrupt flows of crude from the Middle East, while a gauge of global stock markets edged back from seven-week highs following a run-up spurred by optimism over monetary policy.

Gold prices rose to near six-year highs. The dollar fell to a three-month low against a basket of currencies.

Central banks have dominated economic news this week, with the Federal Reserve signaling the potential for a U.S. interest rate cut later this year and the European Central Bank hinting at stimulus measures.

MSCI's gauge of stocks across the globe shed 0.10%, after a day earlier reaching its highest since May 1.

U.S.-China trade tensions were also in focus ahead of an expected meeting between the countries' two leaders next week at a G20 meeting in Osaka, Japan.

U.S. stocks were supported by news that U.S. Vice President Mike Pence called off a planned China speech that had been initially cast as a sequel to a blistering broadside he delivered in October, a move aimed at averting increasing tensions with Beijing.

“Having an accommodative interest rate outlook is a positive for the markets, but now investors are looking for direction on trade,” said Christopher O’Keefe, portfolio manager at Logan Capital Management in Ardmore, Pennsylvania.

"For the market to meaningfully move forward from here you have to have some positive outcome on trade."

On Wall Street, the Dow Jones Industrial Average fell 33.84 points, or 0.13%, to 26,719.33, the S&P 500 lost 3.68 points, or 0.12%, to 2,950.5 and the Nasdaq Composite dropped 19.63 points, or 0.24%, to 8,031.71.

The pan-European STOXX 600 index lost 0.36%.

Trump said he had aborted a military strike on Iran because such a response to Tehran's downing of an unmanned U.S. surveillance drone would have caused a disproportionate loss of life.

Spot gold added 0.8% to $1,399.05 an ounce, surpassing the $1,400 level during the session.

"There is a perfect mix of ingredients for gold's rush to the top - a weak macroeconomic environment, low bond yields, soft dollar and rising geopolitical tensions," said Howie Lee, an economist at OCBC Bank.

Oil futures rallied on fears of disruption to flows in the Middle East, which provides more than a fifth of the world's oil output.

U.S. crude settled up 0.6% at $57.43 a barrel, and Brent settled at $65.20, up 1.2%.

Government bond yields in the United States and Europe rose but remained near record or multi-year lows after the dovish statements from the central banks.

Benchmark 10-year U.S. Treasury notes last fell 17/32 in price to yield 2.0591%, from 2.001% late on Thursday.

The dollar index, which measures the greenback against a basket of currencies, fell 0.44%, falling to a three-month low, with the euro up 0.66% to $1.1366.

(Additional reporting by Jessica Resnick-Ault in New York, Abhinav Ramnarayan in London and Eileen Soreng in Bengaluru, editing by Susan Thomas and James Dalgleish)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.