Reported by Jaime Sicilia Martínez
The main European indices have risen following the fall in oil prices and sovereign bond yields. The IBEX 35 closed up 2.2% and the Euro Stoxx 50 rose by 2.1%. The technology sector saw the biggest gains, driven by semiconductor firms, which have rebounded following the technical correction of recent sessions, buoyed by the positive outlook for Nvidia’s earnings release this evening.
In the Asia-Pacific region, indices were affected by the three-day slide in the US, with Hong Kong’s Hang Seng index falling by 0.6% today and Japan’s Topix by 1.5%. Chinese President Xi Jinping and Russian President Vladimir Putin praised the strength of their relationship during talks in Beijing, where they signed agreements on issues such as trade, technology and railway construction.
Donald Trump has commented that the US and Iran are in the final stages of negotiations, but Iran has warned that it would retaliate beyond the Middle East if the US or Israel resume attacks against the Islamic Republic.
Inflation in the UK fell to its lowest level in over a year. The CPI rose by 2.8% year-on-year in April, down from 3.3% the previous month, reflecting government support through bill subsidies. This has reduced expectations of interest rate rises by the Bank of England.
The Q1 26 earnings season in Europe has been the best in the last three years, with MSCI Europe EPS growing by 7.5%, well above the forecast 2.5%, driven by energy and technology companies. This sets a difficult benchmark for the short term, given the consequences of the wars and the economic downturn.
Fixed Income
A day of sharp falls in yields on major sovereign bonds, despite the fact that Federal Reserve futures price in a 75% probability of a rate hike this year, and if it is delayed until March, they price in a 100% probability, due to the inflationary and economic consequences of the war in Iran, even if it ends soon. Consequently, the 10-year Bond yield has fallen by 11 basis points to 3.09% and the Spanish benchmark by 12 basis points to 3.51%. The 10-year Treasury yield has fallen by 9 basis points to 4.58%.Commodities and currencies.
The US Energy Information Administration (EIA) has highlighted that commercial crude oil stocks in the country fell by 17.8 million barrels last week, the largest reduction since it began publishing these weekly figures.
Gold has risen by 1.2% to $4,537.
