Global markets are starting the week under the shadow of the raging conflict in the Middle East, with ASX futures pointing to a soft day in the antipodes after oil prices spiked 7.8% and equity markets on Wall Street and in Europe sank on Friday.
Central banks will have a lot to say in the coming days, with the US Federal Reserve, Bank of England and Bank of Japan the highlights among a slew of monetary authorities reviewing their policies this week.
Meanwhile, investment bank Jarden is said to be on the hunt for an international partner and open to taking on a strategic investor.
And stricken property developer Du Val will be in the High Court in Auckland today seeking to overturn the receivership that ultimately led to its statutory management.
Black gold
Brent crude oil prices surged 7.8% on Friday with futures up 1.3% at US$75.18 a barrel after Israel launched a series of strikes on Iran to disrupt its nuclear programme, triggering retaliatory attacks as the conflict escalated through the weekend.
Israeli prime minister Benjamin Netanyahu warned strikes will intensify after Iran called off nuclear talks in the US.
Stocks on Wall Street slumped on Friday with the S&P 500 sliding 1.1%, while the UK’s FTSE 100 index declined 0.4% and Germany’s DAX 30 fell 1%.
Australian futures are pointing to a 0.2% decline for the S&P/ASX 200 index, while the kiwi dollar traded at 60.22 US cents at 7am in Auckland from 60.08 cents last week.
“Israel’s pre-emptive strike led to the biggest jump in oil prices since Russia launched its invasion of Ukraine,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “With no sign of a let-up in hostilities, risk sensitive assets face a challenging start to the trading week.”
Central bank meetings will be closely watched this week, with the big three being the Fed, Bank of England and Bank of Japan, none of which are expected to move their benchmark rates. Other monetary authorities reviewing their policies this week include Sweden’s Riksbank, Norway’s Norges Bank, the Swiss National Bank and central banks in the Philippines, Turkey, Indonesia and Taiwan.
An economic update
Chinese retail sales an industrial production will be in view today for another gauge on the health of the world’s second-biggest economy, which typically flows into the likes of infant formula maker a2 Milk Co and European luxury stocks.
New Zealand’s big economic data for the week is March quarter gross domestic product on Thursday, which is expected to show the economy grew 0.7%. That period doesn’t capture US President Donald Trump’s reordering of global trade.
Local data today include the BNZ-BusinessNZ performance of services index, following a sharp drop in its sister manufacturing survey.
Meanwhile, the Australian Financial Review reported that investment bank Jarden is seeking a strategic partner with a global advisory firm, including taking a potential stake, with its executive chair Aiden Allen and joint chief executive Sarah Rennie recently in New York to make the pitch.
And failed property developer Du Val will make its case in the High Court in Auckland today challenging the receivership that led to the appointment of statutory management of the firm. The hearing is set for three days.
Reporting by Paul McBeth. Image from Zbynek Burival on Unsplash.