Morning Note: A Round-up of Global Financial Market News
Market News
Iranian missiles and drones targeted Middle East countries including Saudi Arabia, Kuwait and Bahrain, while Israel carried out a 12th wave of airstrikes on Tehran and the US suspended operations at its embassy in Kuwait. President Trump wants to replace Iran’s entire leadership structure and has some names in mind for a “good leader,” he told NBC, declining to elaborate.
Brent Crude trades at $85 a barrel after the US said it was studying options to arrest a jump in oil prices driven by the conflict. Ship traffic in the Strait of Hormuz has nearly stopped completely, according to the Joint Maritime Information Centre. The IMF says a 10% oil price rise for a year adds 40 basis points to inflation.
The dollar weakened and gold climbed to $5,115 an ounce, ahead of US payroll data for February. The market expects an increase of 60k versus 130k the previous month. The Federal Reserve’s Michelle Bowman said the labour market is showing more evidence of steadying, suggesting she may support another interest-rate hold. The 10-year Treasury currently yields 4.15%.
US equities moved off their lows to end last night’s session slightly down – S&P 500 (-0.6%); Nasdaq (-0.3%) – with the futures market currently forecasting a small increase at the open this afternoon. Software, AI, and energy outperformed, while cyclicals and small caps lagged. Universal Music Group sales growth came in above market expectations but the firm said it’s scrapping plans for a US share listing.
In Asia this morning, equity markets erased earlier losses to edge higher: Nikkei 225 (+0.6%); Hang Seng (+1.6%); Shanghai Composite (0.4%).
The FTSE 100 is currently 0.3% higher at 10,446, while Sterling trades at $1.3370 and €1.1520. Gilt yields continue to tick higher – the 10-year is currently 4.51%. Markets now assign only about a 20% probability of a rate cut this month and anticipate only a single 25-basis-point reduction in borrowing costs over the course of the year.
Source: Bloomberg
