FX Daily: Risk assets catch a break while energy prices take their toll

Market Rebound on Monday Amid Energy Concerns

This Monday, global risk assets experienced a notable recovery from earlier declines as authorities took steps to mitigate the ongoing energy crisis. Oil prices, which had surged during Asian trading hours, retreated following news that the G7 nations might be planning a significant release from their emergency reserves. However, the most influential factor was President Trump's suggestion that the conflict could be resolved in the near future.

Although tapping into emergency oil reserves would provide some relief, it is seen as a temporary measure while oil production in the Middle East remains disrupted. Even a substantial release—such as 400 million barrels—would only offset about 20 days of lost output from the region and would deplete a significant portion of global reserves.