Morning Note: A Round-up of Global Financial Market News
Market News
Brent crude has risen back above $109 a barrel, reversing earlier losses amid scepticism that the US and Iran could reach a deal to end the war soon. Reports indicate the Pentagon is considering sending up to 10,000 additional ground troops to the Middle East, while Iran is said to be mobilising over 1m troops in response. Meanwhile, President Trump extended the deadline for a planned strike on Iranian energy infrastructure to 6 April to allow for negotiations, saying talks with Tehran were going “very well.” Trump also noted that Iran had allowed 10 oil tankers to pass through the Strait of Hormuz this week.
Three Fed officials voiced growing concerns over the war’s economic fallout. Lisa Cook warned of inflation risks, while Michael Barr and Philip Jefferson supported keeping rates steady as they assess the effects of the conflict. The 10-year Treasury yields 4.46%.
Gold has risen back above $4,550 an ounce after a sharp decline in the previous session. For the first time in a few weeks, the rally comes at a time of climbing real yields.
US equities were weak last night – S&P 500 (-1.7%); Nasdaq (-2.4%) – reaching their lowest level since September. In Asia this morning, markets were mixed: Nikkei 225 (-0.4%); Hang Seng (+0.3%); Shanghai Composite (+0.6%). The yen strengthened after Japan’s finance minister flagged the possibility of ‘bold actions’ to counter currency moves.
The FTSE 100 is currently little changed at 10,020. AstraZeneca is up 3% following the announcement of successful Phase III trial results for tozorakimab, their new biologic for Chronic Obstructive Pulmonary Disease (COPD).
Sterling trades at $1.3325 and €1.1560, while Gilt yields remain elevated – the 10-year is 4.91%. On the data front, British Retail Consortium’s consumer confidence plummeted in March, as the conflict raised fears of prolonged inflation. Markets now price in two to three Bank of England rate hikes, with a 70% chance of a move next month and a second fully expected by July.
Pernod Ricard and Jack Daniel’s maker Brown-Forman confirmed they are in merger talks. With little in the way of portfolio overlap, antitrust issues aren’t expected to be a problem. The bigger hurdle is the presence of family shareholders.
Source: Bloomberg
