Oil Drops to 7-Week Low Amid Demand Concerns

Oil prices fell to a seven-week low due to demand concerns, while Asian equities and European stock futures eased ahead of key central bank decisions. The yen steadied after recent gains, and US stocks finished mixed with investors awaiting Federal Reserve and major tech earnings, including Microsoft and AMD. Key European companies such as BP, Rio Tinto, and Airbus are set to report earnings.

Equities

Britain's FTSE 100 edged up 0.1% on Monday, reaching its highest level since early June, driven by optimism around potential interest rate cuts in the US and UK. Real estate shares led the gains with a 0.9% rise. The mid-cap FTSE 250 dropped 0.5% after reaching its highest level in over two years on Friday.

Reckitt Benckiser’s shares plummeted 8.8%, hitting their lowest in more than a decade. Meanwhile, pharmaceutical and biotech shares in the FTSE 100 rose nearly 1%, while precious and industrial metal miners fell 0.8% and 1.3%, respectively, tracking declines in gold and copper prices.

In the US, the S&P 500 closed slightly higher, up 0.08%. Tesla saw a notable rise, following Morgan Stanley's addition of the electric vehicle maker to its "top pick" list for US autos. McDonald's shares rose 3.7%, driven by the popularity of its $5-meal deal, although the fast-food giant reported its first sales drop in 13 quarters.

The Dow Jones Industrial Average fell 0.12%, while the Nasdaq Composite inched up 0.07%. Among the S&P 500 sectors, consumer discretionary was the biggest gainer, buoyed by Tesla’s strong performance. In contrast, the energy sector experienced the largest decline, down 0.9% as oil prices fell.

Abbott Laboratories faced a setback, with its shares closing down 0.4% after a jury ordered the company to pay $495 million in damages over its infant formula. Crypto stocks were particularly volatile, Coinbase Global fell over 3%, while Riot Platforms and Marathon Digital dropped more than 5% despite an early surge when bitcoin prices reached seven-week highs.

Forex & Commodities

The dollar traded sideways on Monday. The dollar index rose 0.18% to 104.56, while the euro slipped 0.33% to $1.0821. The yen showed little change, holding onto its recent gains driven by speculation of a Bank of Japan (BOJ) interest rate hike and potential intervention following several rounds of official yen buying. The dollar/yen pair was last up 0.13% at 153.995.

Gold prices held steady, with spot gold up 0.2% at $2,388.65 per ounce and US gold futures rising 0.3% to $2,385.30. Investors are awaiting the Federal Reserve's policy meeting, where it is expected to hold rates steady but may signal potential easing as early as September.

Oil prices hit seven-week lows, with Brent crude futures touching $79.36, weighed down by concerns over Chinese demand despite tensions in the Middle East and Venezuela. Copper and iron ore prices fell, with zinc and aluminium slipping to multi-month lows.

The Australian dollar was slightly firmer at $0.6548, attempting to recover from Friday's low of $0.65105. Meanwhile, the British pound edged down 0.01% to $1.28645, influenced by falling bond yields and the announcement of spending cuts by the new finance minister to address a £22 billion overspend.