US and European equity futures gained as investors dialed back hedges put on before the weekend against an escalation of the Middle-East conflict. Gold and crude oil dropped as haven demand waned.
Treasuries also declined as Israel held off on its ground offensive into Gaza amid efforts to secure the release of more hostages.
Oil slipped below $87 a barrel, while gold slipped from a five-month high. The yen briefly weakened past 150 to the dollar. Markets are starting to wind back some of last week’s haven bid after Hamas released two US hostages and aid started to trickle through Egypt’s border with Gaza at the weekend.
Still, Israel has stepped up air raids on Gaza in preparation for the “next phase” of its conflict with Hamas, while also warning that Hezbollah risks dragging Lebanon into a wider regional war.
It’s “a carbon copy of last Monday’s session as we see a partial unwind of the safe-haven flows put on ahead of the weekend,” said Tony Sycamore, an analyst at IG Australia in Sydney. Asian stocks dropped from the open, following Friday’s losses on Wall Street. China shares led declines amid property sector woes.
