The dollar strengthened against the safe-haven yen and Swiss franc on Monday, but weakened against most major currencies, as investors monitored the fighting between Israel and Iran for signs it could escalate into a broader regional conflict and braced for a week packed with central bank meetings.

As Israel and Iran exchange attacks, the United States is moving military assets into the Middle East in case it should take an active role in the combat. On Monday, the aircraft carrier USS Nimitz left the South China Sea,

Despite stunning early successes in Israel’s unprecedented strikes on Iran, a weekend of intensive bombardment and retaliation is raising questions about Israel’s exit strategy – how it can end this conflict with its ambitious goals achieved.

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The conflict between Israel and Iran has the potential to considerably disrupt global energy markets, with each nation attacking the other’s oil and gas infrastructure.

Relative calm returned to global markets, with stocks climbing and oil sinking alongside gold as fears subsided that Israel’s war against Iran would escalate into a wider conflict. News reports that Tehran wants to restart talks over nuclear programs also fueled risk-on sentiment.

Services inflation is where the real curveball landed. It slowed sharply, driven by plunging airfares and softening housing costs. Supercore inflation—core services ex-housing—has collapsed from a 9.5% annualized pace in January to essentially flat over the past three months. That’s not disinflation—that’s demand destruction.