MARKET WRAPS

Watch For:

Germany ZEW indicator of economic sentiment; U.K. unemployment; trading update from Klarna

Opening Call:

European stock futures were mostly lower early Tuesday. Asian stock benchmarks were broadly lower; the dollar was little changed; Treasury yields rose; oil futures gained; while gold fell.

Equities:

Stock futures were broadly lower early Tuesday amid signs of persistent tensions in the Middle East.

The White House for weeks promised that Iran was close to signing a nuclear deal and that Oman could be helpful in reopening the Strait of Hormuz.

This deal, however, has proved elusive. And President Trump's frustration with this standoff prompted him to threaten to bomb Oman, as he alleged the country might be standing in the way of an agreement.

"I don't think they behaved very well, but we'd handle them very easily just like we do others," Trump told reporters Monday in the Oval Office. He didn't go into specifics about what Omani officials did that drew his ire.

Forex:

The dollar continues to soften, largely due to markets paring back expectations of Fed rate hikes this year given lackluster U.S. economic data, said DBS's Chang Wei Liang.

Markets have repriced a rate hike by the Fed in September to a mere 35% chance, down from 75% late last month, he added.

Bonds:

The Treasury selloff has intensified, driving the 30-year Treasury yield to its highest level in over 19 years. Longer-term Treasurys have been very reactive to oil prices recently.

To Shriya Samarth, EMEA head of rates at StoneX, this indicates that "inflation in some way, shape, or form is here to stay because of oil. And we're just going to have to learn how to trade that."

Energy:

Oil maintained their upward ascent early Tuesday. "Crude prices are rising on renewed geopolitical tensions triggered by President Trump threatening Oman with military strikes and communicating that he is in no rush to end the Iran war," said José Torres, senior economist at Interactive Brokers.

"A fresh burst of violence in Lebanon is worrying market participants about the potential for an intense escalation of Middle East hostilities," Torres added.

Metals:

Strategists at J.P. Morgan Private Bank are bullish on gold as it is close to bottoming out and "a more durable rebound" should come once the bond market is confident that real yields have peaked. J.P. Morgan has a price target of $4,850 to $5,150 by the middle of next year.

"We remain bullish on gold over the medium term and expect its safe-haven characteristics to re-emerge as market narratives shift from inflation risks toward growth concerns," the strategists wrote. Weaker-than-expected economic data in China is likely weighing on sentiment across the base metals sector, ANZ said. Recent copper premiums on imports to China have fallen, suggesting that buyers are balking at higher prices, ANZ added. Iron ore was steady in Asian trading. Oversupply pressures are likely to intensify due to rising supplies from Australia and Brazil as well as new sources, ANZ said. That would keep a lid on iron-ore price gains, the bank added.

TODAY'S TOP HEADLINES

30-Year Yield Rises to Highest Level Since 2007 as Oil and Treasury Supply Bite Bonds

The Treasury selloff has intensified, driving the 30-Year U.S. Treasury yield to its highest level in over 19 years.

On Monday, the the 30-year yield settled at 5.310%, its highest settlement since 5.356% on June 12, 2007. The yield rise comes alongside a gain of 2.6% in oil prices on Monday, as measured by the U.S. benchmark West Texas Intermediate $(WTI)$ crude oil.

How Gold Beats Stocks This Year

Gold is having a moment again. And if it stays this hot, it could do better than the stock market this year.

The yellow metal traded at roughly $4,460 on Monday, nearly 13% higher than this year's settlement low of $3,992.10 on June 16. Before then, the price hadn't dipped below $4,000 since late last year. For the year, though, gold is up about 3%.

Why Trump Is Threatening Again to Bomb Oman

WASHINGTON-The White House for weeks promised that Iran was close to signing a nuclear deal and that Oman could be helpful in reopening the Strait of Hormuz. The tiny Gulf nation suddenly found itself at the center of the effort to end the war.

This deal, however, has proved elusive. And President Trump's frustration with this standoff prompted him to threaten to bomb Oman on Monday, as he alleged the country might be standing in the way of an agreement.

Iran-Backed Houthis Threaten Coast Along Red Sea Chokepoint

Yemen's Iranian-allied Houthi rebels are escalating attacks along the country's Red Sea coast, shutting down operations at a strategic seaport and pushing closer to the Bab al-Mandeb Strait, an important global shipping chokepoint.

The militant group's recent missile and drone attacks forced the closure of the port of Mokha, a key logistics hub for civilian shipping and for anti-Houthi forces operating along the coast, Yemeni authorities said.

BHP Annual Profit Rises on Record Copper Prices

BHP Group reported a 9% increase in annual net profit and an even bigger gain in underlying earnings as prices of copper, now its main profit engine, surged to record highs.

Australia-based BHP, the world's biggest miner by market value, on Tuesday reported a net profit of $9.83 billion for the 12 months through June, up from $9.02 billion the year prior. A previously announced $2.3 billion write-down of a potash project in Canada weighed on its bottom line.

Google Will Buy Spirit Airlines' Data for $10 Million to Help Fuel Its AI Ambitions

Spirit Airlines is dead, but its 34-year history will live on through Google.

The search giant will pay $10 million after winning an auction Friday to purchase a vast array of data from the now-defunct airline, according to filings from Spirit's bankruptcy proceedings.

Write to singaporeeditors@dowjones.com

Expected Major Events for Tuesday 06:00/UK: Jul UK monthly unemployment figures

07:00/SPN: Jun Trade Balance

08:30/UK: Jul Monthly Insolvency statistics

09:05/GER: Aug ZEW Indicator of Economic Sentiment

10:00/IRL: Jun Goods Exports and Imports

10:00/POR: Jul PPI

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