Markets Watch Middle East Talks as Iran Nuclear Discussions Begin

Financial markets remained subdued during Asian holidays while investors focused on upcoming U.S.-Iran nuclear negotiations in Geneva. Oil prices climbed and gold dropped after President Trump indicated his indirect involvement in Tuesday's diplomatic talks.

Financial markets across the globe maintained a cautious stance Tuesday as diplomatic efforts between the United States and Iran took center stage, with nuclear program discussions scheduled to begin in Geneva.

Commodity markets responded to the diplomatic developments, with oil prices climbing while gold values declined following President Donald Trump’s announcement that he would participate “indirectly” in the nuclear program negotiations. Trump expressed optimism that Iran was interested in reaching an agreement.

Trading activity remained light due to widespread market closures across Asia for Lunar New Year celebrations, including exchanges in mainland China, Hong Kong, Singapore, Taiwan and South Korea. The subdued atmosphere continued following Monday’s Presidents’ Day holiday in the United States.

Without major market-moving events scheduled for Tuesday, investors turned their attention to several important economic releases coming later this week. The Federal Reserve will publish meeting minutes on Wednesday, while U.S. gross domestic product data is expected Friday.

Inflation reports from Britain, Canada and Japan are also on tap this week. These price measurements have gained increased significance following the Reserve Bank of Australia’s recent decision to become the first major central bank, aside from Japan’s unique circumstances, to increase interest rates after the pandemic-era period of monetary easing.

Australian central bank officials stated Tuesday that they determined inflation would remain persistently elevated without their rate increase intervention.

European market futures showed modest declines in early trading, with the Euro Stoxx 50 futures falling 0.35% to 5,975 points. German DAX futures dropped 0.39% to 24,774, while FTSE futures decreased 0.18% to 10,422. U.S. market indicators also pointed lower, with S&P 500 e-mini futures down 0.46% at 6,819.

Several important events could impact Tuesday’s trading session, including earnings announcements from Kerry Group, InterContinental Hotels, and Carrefour SA. Economic data releases include Germany’s final January consumer price index figures, ZEW economic surveys for both Germany and the eurozone, and United Kingdom employment statistics. Additionally, Germany will reopen its 2-year debt auction, while the UK will conduct reopenings of both 2-year and 6-year bond auctions.