Oil markets remain focused on diplomatic efforts to contain the US-Iran conflict. Qatari mediators presented Tehran with a new draft agreement on Sunday, with Iran considering the proposal and a response expected by the end of the week. The draft reportedly sets a seven-day timeline to address both sides’ concerns, requiring daily confidence-building steps that could begin early next week. However, President Donald Trump said further strikes against Iran remain possible, adding that the war will end “when I want it to.” Reported costs have climbed to $47 billion, highlighting the growing economic burden of the conflict.

The Persian Gulf remains central to global energy stability. Egypt and Saudi Arabia have agreed to maintain close cooperation, while the proposed Iran deal could offer a path toward de-escalation. Progress will depend on whether both sides take meaningful steps to rebuild confidence and reduce threats to regional security.

Across Asia, Taiwan’s stock market climbed more than 2%, while South Korea fined Google and Apple 63.7 billion won over forced in-app payment practices. The South Korean won weakened to 1,339.2 per US dollar. Taiwan’s central bank chief expects inflation to remain around 2% next year but warned that a significant increase could prompt rate hikes.

In New Zealand, Reserve Bank Governor Anna Breman signalled that further rate increases are likely at upcoming meetings, potentially taking the Official Cash Rate above previous forecasts. A weaker New Zealand dollar could raise imported inflation, while upcoming inflation and labour-market data will help determine the scale of further tightening. The central bank also acknowledged risks linked to a potential decline in AI-related assets.

Meanwhile, China described the European Union as an important economic and trade partner, while Ukraine reiterated that it would not attack Russian ships carrying diesel for the United States. Trump also reported progress on Ukraine and expressed hope for meetings with Vladimir Putin and Volodymyr Zelenskiy, alongside plans to discuss nuclear disarmament during his Asia trip.

Markets face a delicate balance between diplomatic opportunities and geopolitical uncertainty. A credible agreement with Iran could ease pressure on energy prices and inflation expectations, while renewed military action could reignite volatility. At the same time, central banks remain alert to currency-driven inflation and the risks of excessive tightening, leaving upcoming economic data and developments in the Persian Gulf crucial for investor sentiment.

FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.

FISG — Interstellar Group