Markets begin the week on a slightly upbeat note, but risks remain

Global equities, indices, precious metals, and cryptocurrencies began the week with modest gains as risk sentiment improved due to the prospects of a ceasefire in the Middle East. This optimism stemmed from a draft proposal advocating for a 45-day ceasefire and the reopening of the Strait of Hormuz, presented by both Iran and the United States, even as fresh strikes continued across the region.

Meanwhile, President Trump extended his ultimatum to Tehran for an extra 20 hours, creating a new hard deadline. Markets reacted quickly to hints that tensions in the Middle East were easing, reigniting risk-taking appetite. The proposal arises amid rising tensions and loud rhetoric from President Trump, who warned on Sunday that if Iran fails to reopen the Strait of Hormuz by his deadline, Tuesday will be "Power Plant Day" and "Bridge Day."

Dollar slides as a retreat in oil prices fuels a risk rally

The US dollar index and oil futures cooled off from recent surges, prompting investors to shift toward riskier assets across global markets. News of the ceasefire extended the dollar’s early European session decline. Although upward momentum has slowed, market breadth remains intact with no signs of profit-taking or reversal from recent highs.

WTI and Brent crude futures fell as reports of a potential Middle East ceasefire weighed on prices. As oil prices cooled, inflationary pressures eased slightly, encouraging money to rotate back into risk assets. The euro and British pound gained momentum, showing relative strength and healthy volume on the first trading day of the week, supported by a weaker dollar and improved risk appetite.

Geopolitical tensions continue to pose a significant risk to the market

Looking ahead, the market recovery could continue if more official ceasefire signals emerge from the involved parties. However, if ceasefire statements are denied or negotiations lose momentum, negative sentiment could quickly return. Therefore, investors and traders should closely monitor geopolitical developments, President Trump’s remarks, and ongoing U.S.-Iran talks.

Warning! This material is not intended as investment advice. Past performance data does not guarantee future returns. Investing in foreign currencies may affect your returns due to their fluctuations. Any transaction with securities may result in both profits and losses. The assumptions and expectations set forth in this material are only estimates that may not be accurate and may change depending on current economic conditions. These statements do not guarantee future returns.