Oil Hits Three-Month High as Global Markets Close Mixed

The rise in oil prices and the conflict in the Middle East keep investors on edge at the start of the week. This is compounded by uncertainty over key inflation data in the United States that will be released later this week, which could ultimately determine whether the Federal Reserve (Fed) raises interest rates next week.

Iran announced that it will establish a restricted zone outside the Strait of Hormuz in the coming days, after U.S. forces attacked three Iranian oil tankers and the Islamic Revolutionary Guard Corps launched ballistic missiles at two U.S. Navy vessels.

As a result, Brent crude futures rose by up to 1% to reach $97.31 per barrel, its highest level in three months. Oil prices surged nearly 8% last week and are now 35% above the level they were at the end of February, before the war began.

Market focus shifts to Europe and Asia.

In Europe, the Euro Stoxx rose 0.2%. Locally, the German DAX fell 0.2% and the French CAC gained 0.3%. Outside the eurozone, the UK FTSE trimmed 0.1%.

Politically, the Alternative for Germany (AfD) party came in first in the state elections held on Sunday in Saxony-Anhalt, putting a far-right party on the brink of gaining state power for the first time since World War II.

Although it did not achieve a majority and is far from gaining national power, the AfD has stated that one of its policies would be to abandon the euro, which has caused unease in the market.

Similarly, the latest polls in France indicate that far-right leader Marine Le Pen, who has also expressed support for leaving the euro, is likely to win the first round of next year's presidential elections.

Meanwhile, the yen surged on Monday to its highest level in seven months, driven by bets on a faster tightening of monetary policy by the Bank of Japan and expectations that Japanese investors may repatriate their funds.

This seems to have impacted the Japanese stock market, as the Nikkei 225 rose 2.02%, while the South Korean Kospi jumped 4.61%. In China, the Hong Kong Hang Seng fell 0.93%, while the Shanghai Stock Exchange increased by 0.07%.

Awaiting U.S. inflation.

Ahead of the Fed meeting next week, last Friday's employment report --- which far exceeded expectations with an increase of 162,000 jobs in August --- led markets to price in a 58% probability of an interest rate hike at their meeting on September 16, and a 70% chance of a hike in October.

On Friday, the Consumer Price Index (CPI) for the U.S. will be released, a figure that will ultimately define the direction members of the U.S. central bank will take. The market expects a year-on-year inflation rate of 3.4%, while a monthly variation of 0.4% is anticipated.

Meanwhile --- and with no trading this Monday due to a holiday --- Wall Street futures are mixed: the S&P 500 is down 0.19%, while the Nasdaq Composite, focused on the tech sector, is down 0.54%. The Dow Jones Industrial Average is moving down 0.07%.

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