Morning Note: A Round-up of Global Financial Market News.
A rout in global bonds intensified as the deadlock over the Iran war pushed Brent above $111 a barrel and deepened inflation fears. Donald Trump warned Tehran it was running out of time for a peace deal, with the two sides no closer to reopening the Strait of Hormuz.
Treasuries declined across the curve with the 30-year yield rising to the highest in almost three years. The yield on the US 10-year has risen to 4.62%. Japan’s 10-year yield jumped 10 basis points to levels last seen in 1996, while the nation’s 30-year yield surged 20 basis points to the highest since its 1999 debut. Bonds also dropped in emerging economies such as Indonesia and India.
Gold currently trades at $4,550 an ounce. Central banks’ gold purchases are expected to pick up to average 60 tons a month over 2026, Goldman said, while maintaining a bullish target for prices to climb to $5,400 an ounce by the end of the year.
China will buy at least $17bn of US agricultural products annually through to 2028, the White House announced, while Beijing said the two countries will also lower tariffs on some goods. China’s industrial production and retail sales rose less than expected in April, while investment resumed declines.
Equity markets are selling off this morning. In Asia, the main indices were in the red – Nikkei 225 (-1.0%); Hang Seng (-1.5%); Shanghai Composite (-0.5%) – while the futures market is currently predicting a 0.5% decline at the open this afternoon. A key test for investors this week will be Nvidia’s earnings due to be released after the market close on Wednesday.
Wes Streeting said he will stand in any UK leadership contest and called for the country to “one day” be back in the EU. Hedge funds have ramped up bearish sterling option bets after Andy Burnham secured a pathway to potentially challenge the prime minister. The UK’s Reeves will scrap a planned hike to fuel duty, the Sun reported. The tax rate on petrol and diesel had been due to rise from September. Sterling currently trades at $1.3345 and €1.1470, while the 10-year Gilt yield rose to 5.15%.
The FTSE 100 is currently bucking the trend, trading 0.2% higher at 10,195, driven by the oil majors and dollar earners. Anglo American has announced an agreement to sell its portfolio of steelmaking coal mines in Australia for up to $3.875bn. The proceeds will be used to reduce net debt.
AstraZeneca has announced the approval of two products in the US. Firstly, Enhertu for two new indications for patients with HER2-positive early breast cancer. Secondly, Baxfendy as the first and only aldosterone synthase inhibitor treatment for adults with hypertension, billed as a potential $5bn-a-year product.
Source: Bloomberg
