A look at the day ahead in European and global markets from Ankur Banerjee
An indefinite ceasefire in the Middle East that may or may not be agreed by all parties but is mostly expected by markets is likely to leave April’s risk momentum intact, allowing investors to focus instead on corporate earnings and economic data.
U.S. President Donald Trump appeared to unilaterally announce a ceasefire extension just hours before the current one was due to expire, although it remains unclear whether Iran, or U.S. ally Israel, have agreed – or even would agree – to the new arrangement.
At the same time, Trump said he would continue blockading Iran’s ports and shores, meaning traffic through the Strait of Hormuz is effectively at a standstill. That has left Brent crude prices hovering near $100 a barrel.
Oil prices may have pulled back from March peaks on growing optimism of a peace deal but as long as the waterway remains closed, there is always the risk of elevated energy prices – still above pre-war levels – and inflationary shock.
That brings us to the main economic data of the European day with a British inflation report for March set to provide details of the local impact of the war in the Middle East. It will likely show inflation accelerated to 3.3% from 3% in February, showed a Reuters poll of economist.
Earnings from U.S. chipmaker Texas Instrument and Elon Musk’s Tesla later in the global day will also be crucial to understanding how companies are navigating the upheaval in energy and supply chains.
While they’ve been grappling that, Musk’s SpaceX has seen a slew of developments this week as it barrels toward what could be the largest initial public offering in history.
And so, with little in the way, share prices are likely to hum higher, having already recouped all loss suffered in March. U.S. stock futures were up 0.5% while European futures pointed to a subdued open.
In Asia, the AI theme is back on, leading South Korean and Taiwan stocks to record highs with South Korean chipmaker SK Hynix now among the top 20 most valuable companies in the world.
Key developments that could influence markets on Wednesday:
• UK CPI and PPI for March
• Euro zone consumer confidence flash for April
(By Ankur Banerjee in Singapore; Editing by Christopher Cushing)
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