Morning Note: A Round-up of Global Financial Market News.

Market News

Brent crude trades at $76 a barrel after dropping about 2% in the previous session, as reports indicated that the US and Iran will continue peace negotiations despite a recent escalation in hostilities that disrupted energy shipments through the Strait of Hormuz. China may seek to start rebuilding its oil inventories by the fourth quarter as stockpiles dwindle, potentially tightening global crude markets, Bernstein said.

The yield on the US 10-year Treasury slipped to 4.53%, while gold trades at $4,120 an ounce. Markets continue to expect the Federal Reserve to raise interest rates at least once this year, although the policy outlook remains highly uncertain. Meanwhile, New York Fed President John Williams said that, among the factors driving inflation in the US, he is most focused on demand fuelled by AI. The US sold $22bn in 30-year Treasury bonds at 5.058%, the highest yield since 2007.

US equities moved higher last night – S&P 500 (+0.8%); Nasdaq (+1.3%) – with the positive momentum continuing into Asia this morning: Nikkei 225 (+1.2%); Hang Seng (+1.2%); Kospi (+2.9%). SK Hynix was among the winners after its $26.5bn American depositary share offering. The yen and Japanese bonds rose after Satsuki Katayama called on pension funds to invest more in domestic assets.

The FTSE 100 is currently 0.3% higher at 10,501. easyJet and Apollo Management have reached an agreement in principle on the key financial terms of a possible cash offer for easyJet at 715p a share, valuing the airline at £5.7bn.

Andy Burnham’s path to becoming the next UK prime minister looks certain after a vast majority of Labour MPs formally nominated him to be party leader. The Bank of England’s Huw Pill said policymakers will need to raise interest rates this year to keep inflation in check. Sterling trades at $1.3425 and €1.1735, while the 10-year Gilt yields 4.88%.

Source: Bloomberg