● Recent days have brought significant relief to markets. President Donald Trump announced that Israel and Lebanon have agreed to a 10-day ceasefire, which was confirmed by the Israeli prime minister. However, Middle East experts emphasize that the agreement remains very fragile, with key issues still unresolved.
● Donald Trump also warned that it would be “great for Hezbollah if they behave properly,” while adding that a new meeting with Iran could take place as soon as this weekend. He also stated that “the war in the Gulf should come to an end soon.”
● As a result of these geopolitical developments and a partial easing of tensions in the Middle East, US equities remain close to record highs after a strong rebound, supported by solid corporate earnings and growing investor optimism about a potential end to the conflict.
● Meanwhile, officials from Gulf countries and Europe expect that the US may need up to six months to reach an agreement with Iran. Additionally, G7 countries are warning about the economic risks stemming from the war, highlighting potential inflationary pressures and supply chain disruptions.
● In commodities, Brent crude oil has once again fallen below $100 per barrel.
● Yesterday, we also received US labor market data, which came in better than expected. Initial jobless claims stood at 207,000 versus the market forecast of 215,000, confirming the relatively strong condition of the US labor market. Additionally, the Philadelphia Fed business index for April surprised to the upside, rising to +26.7 compared to the expected +10.0, indicating a clear acceleration in industrial activity and improving business sentiment.
● In Asia, trading sessions are currently dominated by negative sentiment. Japan’s Nikkei 225 is down around 1%, South Korea’s Kospi is down 0.5%, and China’s Hang Seng is declining by 1.3%. Australia’s index is holding up slightly better, falling by just 0.2%.
● Bank of Japan Governor Kazuo Ueda declined to comment on falling expectations of an April rate hike.
● On the currency market, we are seeing continued weakening of the Japanese yen against major currencies, with USD/JPY once again testing the 160 level.
● The People’s Bank of China (PBoC) set today’s USD/CNY reference rate at 6.8622, while expectations stood at 6.8206. China continues to signal a loose monetary policy alongside increased fiscal spending to support economic growth amid global uncertainty. Authorities are focusing on boosting consumption and investing in new technologies and energy security to strengthen long-term development.
● In precious metals, we are seeing modest gains. Gold is up around 0.2%, surpassing $4,800, while silver is up about 0.5%, testing the $79 level.
● A contrasting trend is visible in the cryptocurrency market, where major assets remain under pressure. Bitcoin has fallen below $75,000, while Ethereum is down around 1.5%, trading near $2,320.
● Netflix shares dropped more than 9% despite solid first-quarter results that beat market expectations in terms of revenue and earnings. However, investors were disappointed mainly by weaker forward guidance, particularly lower expected profits, revenues, and margins for the second quarter. Additionally, part of the strong performance was driven by one-off factors, raising concerns about the sustainability of growth and weighing on sentiment.
