Escalating tensions from the ongoing US-Iran standoff in the Strait of Hormuz have heightened market risk aversion, putting broad pressure on major Asian and European stock indices on Monday. The UK's FTSE 100 slipped 0.17%, while mainland Europe's Germany DAX and France CAC 40 also edged down 0.06% and 0.03%, respectively. In the foreign exchange market, the GBP/USD exchange rate remained largely steady around 1.3492.
The navigation deadlock in the Strait of Hormuz remains the core factor unsettling market nerves. US Central Command revealed that amid the ongoing blockade operations against Iran, the number of rerouted commercial vessels has risen to 55. During this period, two vessels were forced to halt and another two underwent compliance checks, although over 30 ships carrying humanitarian supplies were granted transit permits. On the diplomatic front, US President Trump stated that a low-profile approach is currently being adopted toward Iran, with both sides in an informal negotiation phase aimed at observing the domestic inflation and fiscal pressures facing Iran. However, Tehran's stance remains tough, insisting on the lifting of the naval blockade, withdrawal of US troops, cancellation of sanctions, and payment of war reparations. This has made it difficult to bridge the core differences between the two sides, causing negotiations to stall.
The peace process in the Gaza Strip is also facing setbacks. Although former US Secretary of State Hillary Clinton publicly endorsed Trump's 20-point plan, Israel rejected a separate 15-point plan proposed by Trump. Israeli Prime Minister Benjamin Netanyahu made it clear that the Israeli military will not initiate any withdrawal before Hamas is completely disarmed, making the prospects for diplomatic mediation in the Middle East even more uncertain.
Amid the gloom of geopolitical tensions, domestic macroeconomic data from the UK offered a glimmer of hope. The latest recruitment data indicates signs of stabilization in the UK labor market. The permanent placements index rebounded to 50 in July, not only ending a 45-month consecutive contraction but also marking the first stabilization since 2022. Although the temporary billings index dipped slightly to 51.9, it remains in a robust growth range. Industry insiders note that despite ongoing external uncertainties, the recovery in corporate investment willingness suggests the labor market is turning a corner.
Driven by the geopolitical landscape, the commodity market displayed mixed performance. Crude oil prices generally maintained narrow fluctuations, with Brent crude edging up to $83.66 per barrel, while WTI crude dipped slightly to $78.08 per barrel. In contrast, gold's safe-haven appeal was once again highlighted, with gold futures and spot gold prices climbing to $4,413 and $4,353.82, respectively, extending their recent upward momentum.
