The U.S. dollar continues to strengthen due to factors such as higher interest rates, robust economic performance, and global demand for safe-haven assets, impacting international trade and currency markets.
The recent Houthi attacks on merchant vessels in the Red Sea, amid the ongoing Israeli-Hamas conflict, pose significant risks to global markets and could exacerbate inflation. Investors are advised to pay attention to the situation as it could lead to increased economic instability and impact world economic price stability.
The year started with cautious market sentiment as oil prices rose due to tensions in the Red Sea and weak Chinese manufacturing data affected Asian stocks. US equity futures remained stable, while European stocks saw a slight increase. The situation in the Red Sea escalated after Iran sent a warship following the US Navy's action against Houthi boats. Meanwhile, Bitcoin's value increased with the prospect of an ETF approval. In Asia, market sentiment was further impacted by the US pressuring the Netherlands to halt shipments of chip-making equipment to China. Upcoming economic data releases and central bank communications are anticipated to guide market directions in the short term.