Markets Await Washington Summit and Middle East Developments

Despite Friday's market recovery, investors are maintaining elevated cash reserve levels and closely monitoring geopolitical developments.

In Washington, investors' attention is focused on the significant meeting between US President Donald Trump and Chinese President Xi Jinping. Market participants are hoping for concrete signs of progress on trade relations, rare earth metal supply chains, and technology export rules, in order to gain confidence that the existing trade truce between the two countries will hold.

"A major breakthrough in resolving long-standing disputes seems unlikely, though the meeting could turn out to be a symbolic step forward for future trade negotiations," said Lukman Otunuga, Head of Market Research at global trading broker FXTM.

At the same time, energy and currency markets remain particularly sensitive to diplomatic developments in the Middle East.

Although oil prices fell during the day, traders are maintaining a cautious stance. They are weighing the temporary price decline against the risk of renewed supply disruptions in the Persian Gulf and the existing deficit in European natural gas storage.