Macro Update
Oil rebounds above $100 a barrel: Brent crude rose above $100 after renewed US-Iran clashes threatened the fragile ceasefire and raised concerns over shipping disruption in the Strait of Hormuz, although both Brent and WTI were still on track for weekly declines of around 6%.
AI optimism supports Asian equities: Asian markets eased from record highs but remained set for strong weekly gains as AI infrastructure demand continued to support chipmakers, with South Korea’s KOSPI heading for its biggest weekly rise since 2008 and Taiwan’s benchmark up 7% this week.
Japanese stocks retreat from record highs: The Nikkei fell 0.3% after surging above 63,000 in the previous session, pressured by a 4.6% drop in SoftBank Group amid weakness in Arm Holdings and concerns over AI chip supply constraints.
Currency markets remain focused on Japan intervention risks: The yen traded near 157 per dollar following suspected Japanese intervention estimated at almost $70 billion since last week, while China’s yuan strengthened towards its highest level since 2023 and sterling held steady despite concerns over Labour’s local election setbacks.
Markets await US payrolls data: Investors are focused on Friday’s US non-farm payrolls report, with economists forecasting 62,000 jobs added in April, as traders assess the interest rate outlook against a backdrop of elevated oil prices and geopolitical tensions.
Bond yields rise on inflation concerns: Treasury yields remained elevated as higher crude prices reinforced inflation worries, with the US 10-year yield around 4.39% and Australia’s 10-year yield climbing to 4.99%, while Bitcoin moved towards a sixth consecutive weekly gain.
