Oil slipped with gold and government bonds as demand for haven assets eased after Israel’s military action in Gaza proceeded more cautiously than had been anticipated.
Brent crude dropped below $90 a barrel after rising by almost 3% on Friday, while WTI fell toward $84. S&P 500 futures contracts gained 0.3% after the gauge fell 0.5% on Friday, with risk appetite dented over worries including a persistently hawkish Federal Reserve and underwhelming corporate earnings.
The dollar was little changed against major peers, while the 10-year Treasury yield rose more than three basis points. Gold slipped but remained above $2,000 an ounce, and Australian bond yields edged higher.
“As the conflict in the Middle East continues, we are on watch for a collision course between tight financial conditions and geopolitically driven risk aversion,” Eric Robertsen, global head of research and chief strategist at Standard Chartered Plc, wrote in a note to clients.
“For the moment, it is rates volatility that is driving outflows from emerging market assets and developed market equities.” Australian, Japanese and Hong Kong equities fell.
Shares of China Evergrande Group slumped even as the world’s most indebted developer got more breathing room Monday when a Hong Kong court adjourned a winding-up hearing to Dec. 4.
