Report by Renta 4
Flat opening on European markets (Eurostoxx futures down 0.1%, S&P futures up 0.2%, Nasdaq futures up 0.3%) and a strong rebound in Asia (Japan’s Nikkei 2%, South Korea’s Kospi 8%)
Yesterday, once again, and following the overnight escalation in the Middle East conflict, with crossfire between Israel and Iran and Hezbollah’s admission of having taken part in the attack on Israel (whilst banning Israeli shipping in the Red Sea), by midday a daytime de-escalation had set in with Trump’s intervention demanding an immediate end to the attacks (although the US president’s stance towards Israel is becoming increasingly tough, stating that “Netanyahu will have to accept any agreement the US reaches with Iran” and “I make all the decisions, all of them”). This intervention by Trump allowed Brent to fall by around 3% from the session’s highs, by keeping alive expectations of a US-Iran deal -Iran, which nevertheless continues to keep us waiting (maintaining its red lines: Hormuz, nuclear and frozen assets), opens new fronts such as the Houthis, and where Israel does not seem willing to yield to Trump’s demands (Netanyahu stated in the afternoon that he would continue the attacks on Iran, defending his right to self-defence).
The latest news on the war suggests that Iran and Israel have agreed to cease hostilities in order to resume talks on a deal, following Trump’s instructions. Just this evening, a US Apache helicopter reportedly crashed near the Strait of Hormuz, although it is unclear whether it was shot down or suffered a mechanical failure. Against this backdrop, Brent crude fell by 1% this morning to $93.50 per barrel, moving away from the highs since the war began, which exceeded $110 per barrel.
On the macro front, we learned today that China’s trade surplus widened in May year-on-year to $105.43 billion, a high not seen since January (against an estimated $92.3 billion and the previous $84.82 billion), driven by demand for AI hardware, with exports up 19.4% (against an estimated 15% and a previous 14.1%), hitting a three-month high, and imports up 27.4% (against an estimated 26% and a previous 25.3%).
The same data will be published in Germany (along with industrial production figures) and the US, where the NFIB small business optimism index for May will also be released (estimated at 96 against 95.9 previously).
On the corporate front, OpenAI is reported to have submitted its documentation to the SEC to apply for an IPO, although no specific date has yet been set. This move would fulfil the anticipated goal of three of the AI giants going public. We note that SpaceX will make its debut this Friday and that Anthropic’s IPO is scheduled for October.
