Oil prices rose on Monday, hitting a three-week high, as investors awaited further U.S. sanctions on Russia that could impact global supply. Strong Chinese crude imports also supported prices.

Brent crude futures climbed by 58 cents, or 0.8%, to $70.94 per barrel by 09:00 GMT, while U.S. West Texas Intermediate (WTI) crude gained 59 cents, or 0.9%, to $69.04 per barrel.

UBS analyst Giovanni Staunovo said: “Higher crude imports into China and market expectations surrounding an upcoming announcement from U.S. President Donald Trump on Russia are providing additional support to prices.”

Trump promises a “major announcement” on Russia

Trump said on Sunday that he would send Patriot missile systems to Ukraine and indicated that he would issue a “major statement” regarding Russia on Monday, expressing frustration with Russian President Vladimir Putin over the lack of progress in ending the war in Ukraine.

In an attempt to pressure Moscow into serious negotiations, a bipartisan U.S. bill to impose new sanctions on Russia gained momentum in Congress last week. At the same time, European Union representatives were close to reaching an agreement on the 18th package of sanctions against Russia, which is expected to include a reduction in the price cap on Russian oil, according to four European sources following a meeting on Sunday.

China drives the market with strong import support

Customs data released Monday showed that China’s crude oil imports rose by 7.4% year-on-year in June to reach 12.14 million barrels per day — the highest level since August 2023.

JPMorgan’s research team said in a client note: “China is likely to continue building its oil inventories, but with storage nearing 95% of the peak accumulation recorded in 2020, these stocks may begin to appear in visible Western market locations — critical zones in price formation — potentially putting downward pressure on prices.”

Weekly gains amid tightening market expectations

Brent crude posted a 3% weekly gain last week, while WTI rose by about 2.2%, following comments from the International Energy Agency that the global oil market may be tighter than it appears.

Investors are also closely watching developments in trade negotiations between the U.S. and its key partners, especially amid rising tensions from Washington’s recent protectionist policies and tariff announcements.

The euro briefly hit a three-week low on Monday morning before recovering some losses, while the U.S. dollar edged slightly higher after President Donald Trump threatened to impose 30% tariffs on imports from two of the United States’ largest trading partners, starting August 1.

Analysts pointed to what's known as the "TACO" trade (short for "Trump Always Chickens Out") as a factor in suppressing major moves in the foreign exchange markets, with investors now less responsive to his recurring threats.

Clearer Moves in the Crypto Market

In contrast, the cryptocurrency market saw sharper movements, with Bitcoin surging to a new record high above the $120,000 mark, driven by investor bets on long-awaited legislative breakthroughs in favor of the sector expected this week.

The world’s largest cryptocurrency jumped 2.9% to trade at $122,549.70, while Ether rose 1.5% to $3,039.48.

New Tariff Threats and European Accusations of Unfairness

Trump announced the new tariffs on Saturday in two separate letters addressed to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, both posted on his Truth Social platform.

The European Union and Mexico both described the tariffs as “unfair” and “destabilizing.” The EU said it would extend its suspension of retaliatory tariffs against the U.S. through early August and would continue pushing for a negotiated resolution.

Could Trump’s Success in Pressuring Trade Partners Support the Dollar?

Analysts at Commerzbank wrote in a morning note: “If Trump is actually able to extract major concessions from America’s trading partners through tariff threats, that could be seen as a positive for the dollar — especially if the concessions involve lower tariffs on American goods.”

However, they also warned that the high level of uncertainty facing American businesses, with constant tariff threats, is dampening investment appetite.

Markets Largely Ignore the New Threats

Despite the threats, the reaction in currency markets was relatively muted:

The euro fell 0.1% to $1.168175 after touching its lowest level in three weeks before partially recovering.

The British pound declined 0.1% to $1.3475.

The Japanese yen inched up to 147.33 per dollar.

The U.S. dollar climbed 0.3% against the Mexican peso to 18.683 pesos.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said: “Financial markets seem desensitized to Trump’s tariff threats after months of repetition... The muted reaction this time suggests the market views it as a negotiation tactic aimed at extracting further concessions.”

Moves in Other Currencies and Concerns Over Trump Interfering with the Fed

The Australian dollar fell 0.11% to $0.65665, while the New Zealand dollar dropped 0.36% to $0.5988.

Outside the tariff news, Trump said on Sunday that it would be “great” if Federal Reserve Chair Jerome Powell resigned — a fresh jab at the central bank’s independence, as he again called for interest rate cuts.

Markets Turn Toward Inflation Data

Markets now turn their attention to U.S. inflation data for June, due Tuesday, which may offer clearer signals on the interest rate path. Investors currently price in a bit more than 50 basis points of rate cuts by December.

Recovery in Chinese Exports

In Asia, data released Monday showed that Chinese exports regained momentum in June, while imports also rebounded, as exporters rushed to ship goods ahead of a potentially short-lived tariff truce between Beijing and Washington, with the Trump administration’s August deadline approaching.

Gold prices rose in European markets on Monday, extending gains for the fourth consecutive day and reaching a three-week high, as safe-haven buying intensified amid fears of an escalating global trade war following Trump’s threat to impose tariffs on the European Union and Mexico.

Gains in the precious metal were capped by the strength of the U.S. dollar in the foreign exchange market, as investors await key U.S. inflation data this week, which will offer strong clues about the likelihood of interest rate cuts in the second half of the year.

The Price

• Gold prices today: Gold rose by more than 0.55% to $3,375.01, up from the opening level of $3,355.72, after touching a session low of $3,353.84.

• On Friday, gold prices settled with a 0.95% increase, marking a third straight daily gain, driven by Trump’s tariff announcements.

• Over the past week, gold rose by 0.55%, its second consecutive weekly gain.

Trump’s Trade Threats

On Saturday, U.S. President Donald Trump announced new tariff measures in separate letters addressed to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, both published on his "Truth" social media platform.

Trump threatened to impose 30% tariffs on the EU and Mexico — two of the U.S.'s largest trading partners — starting August 1.

Both the EU and Mexico described the tariffs as unfair and disruptive. The EU said it would extend its suspension of retaliatory measures on U.S. tariffs until early August and would continue pressing for a negotiated settlement.

U.S. Dollar

The U.S. dollar index rose by 0.25% on Monday, extending gains for the third consecutive session and hitting a three-week high of 98.10 points, reflecting continued dollar strength against a basket of major and minor currencies.

Carol Kong, currency strategist at Commonwealth Bank of Australia, commented that financial markets appear increasingly indifferent to President Trump’s tariff threats, which have become a repeated theme in recent months.

Separately, Trump stated on Sunday that it would be “great” if Federal Reserve Chair Jerome Powell resigned, once again threatening central bank independence as he called for rate cuts.

U.S. Interest Rates

• According to the CME Group’s FedWatch tool, markets currently price in a 7% chance of a 25 basis-point rate cut at the July meeting, with a 93% chance of no change.

• For September, odds of a 25 basis-point cut are steady at 61%, with the probability of no change at 39%.

• Investors are closely watching this week’s release of U.S. consumer and producer price data for June to reassess these expectations.

Gold Outlook

• Kelvin Wong, market analyst for the Asia-Pacific region at OANDA, said: “We’re seeing a resurgence in safe-haven demand amid uncertainty over the implementation of U.S. global trade tariff policy.”

• Wong added that the short-term outlook for gold appears positive, and if gold closes above $3,360, it could rise toward the next resistance level at $3,435.

SPDR Fund

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by approximately 1.17 metric tons on Friday, bringing the total to 947.64 metric tons.

The euro fell in European markets on Monday against a basket of major global currencies, deepening its losses for the fourth consecutive day against the U.S. dollar and recording its lowest level in three weeks. The decline comes amid threats from Donald Trump to impose tariffs of around 30% on European products starting this August.

The European Union rejected Trump’s trade threats and decided to extend its suspension of retaliatory tariffs on U.S. products until August 1, while continuing to push for a negotiated resolution.

With growing uncertainty surrounding the possibility of a European interest rate cut at this month’s European Central Bank meeting — especially after June’s key inflation data — investors are awaiting further important economic indicators from the eurozone.

The Price

• Euro exchange rate today: The euro fell against the dollar by 0.3% to $1.1654 — its lowest level since June 26 — down from Friday’s closing price of $1.1688. The euro reached a session high of $1.1698.

• On Friday, the euro ended the session down 0.1% against the dollar, marking its third straight daily loss amid Trump’s trade pressure on the EU.

• Last week, the euro lost 0.7%, its first weekly loss in three weeks, as part of a correction and profit-taking move from a four-year high of $1.1830.

Trump's Trade Threats

On Saturday, U.S. President Donald Trump announced his latest tariff measures in two separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, both posted on his social media platform “Truth.”

Trump threatened to impose 30% tariffs on the European Union and Mexico — two of the U.S.'s largest trading partners — starting August 1.

In a swift response, the European Union said it would extend its suspension of countermeasures on U.S. tariffs until early August and continue pressing for a negotiated settlement.

U.S. Dollar

The dollar index rose on Monday by 0.25%, extending gains for the third straight session and hitting a three-week high of 98.10 points, reflecting continued strength in the U.S. currency against both major and minor currencies.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said: “Financial markets seem increasingly indifferent to President Trump’s tariff threats now, after these warnings have been repeated several times in recent months.”

Beyond tariff headlines, Trump stated on Sunday that it would be “great” if Federal Reserve Chair Jerome Powell resigned, once again threatening the central bank’s independence as he called for interest rate cuts.

European Interest Rates

• According to Reuters sources, a clear majority at the last European Central Bank meeting favored keeping interest rates unchanged in July, with some calling for a longer pause.

• Money markets currently price in a roughly 30% chance that the ECB will cut rates by 25 basis points in July.

• To reassess those expectations, investors are closely watching upcoming economic data from Europe as well as comments from ECB policymakers.