Stock markets in Asia remained flat on Monday as investors awaited an announcement from the U.S. government regarding new sanctions on Iran. Oil prices decreased slightly during early trading, while the Canadian dollar fell following the breakdown of trade negotiations with the United States. Markets also prepared for quarterly earnings reports from chipmaker Nvidia and a scheduled speech by Federal Reserve Chairman Kevin Warsh later in the week.
U.S. Treasury Secretary Scott Bessent is scheduled to hold a news conference later on Monday to provide details on sanctions targeting Iran. The move follows Iran's continued control over the Strait of Hormuz. In anticipation of the announcement, Brent crude fell 1.0% to $93.43 a barrel, while U.S. crude dropped 1.1% to $86.14. These declines followed a week where oil prices had risen by 6.6%.
In currency markets, the Canadian dollar weakened to 1.3784 per U.S. dollar. This shift occurred after Canadian Prime Minister Mark Carney announced that Canada would impose retaliatory tariffs on U.S. goods including steel, dairy, agricultural equipment, and electronics. The decision followed the collapse of trade talks between the two nations. Meanwhile, the U.S. dollar index sat at 96.832, as investors expressed concerns regarding U.S. debt levels and policy uncertainty.
Investors are looking toward Wednesday for Nvidia's quarterly results, with analysts projecting revenue to nearly double to approximately $92 billion. Market participants are also monitoring Federal Reserve Chairman Kevin Warsh’s upcoming Friday speech at the Jackson Hole economic symposium. While some seek clarity on interest rates, analysts like JPMorgan's Bruce Kasman suggested Warsh may focus on his "regime change" agenda and reducing the Fed's balance sheet rather than providing specific guidance on future rate hikes.
The trade dispute between the U.S. and Canada will have a direct impact on cross-border commerce, specifically affecting manufacturers and consumers of steel, dairy, and electronics. Prime Minister Carney confirmed that Canadian tariffs will take effect on September 8. This policy shift may result in higher prices for imported appliances and paper products for households in both nations. Additionally, the ongoing tensions in the Strait of Hormuz contribute to volatility in global energy prices, which dictates what drivers pay at the pump and what businesses pay for shipping.
Looking ahead, several key benchmarks will determine market direction through the end of the year. The U.S. government is expected to release core inflation figures this week, with a median forecast of 3.3% for July. Following the Federal Reserve's September 16 meeting, markets are currently fully priced for an interest rate move by December. In the commodities market, gold has risen 14% so far in August to $4,623 an ounce, positioning it for its largest monthly increase on record if the trend holds through the end of the month.