Asian-Pacific indices end mixed

US stock index futures were higher in early trade on Wednesday, making back a modest yet significant proportion of yesterday’s losses. This morning’s rally came after President Trump extended the ceasefire with Iran, providing some relief to investors concerned about this evening’s deadline for the agreement’s expiration. Yesterday, the Dow, S&P 500 and NASDAQ all fell 0.6%, while the Russell 2000 closed 1.0% lower.

Source: TN Trader

Earlier comments from Mr Trump suggested that the US was ready to resume military action, with threats to cause serious damage to Iran’s civilian infrastructure. Just to repeat the commentary from above:

On one hand, this <the extended ceasefire> could be viewed positively, giving another opportunity for talks to take place. But the delay also raises concerns that the conflict could drag on despite continued diplomatic efforts. The Trump administration should be worried that Tehran spurned the talks, even as the President spins it as a sign of Iran’s fractured leadership. Instead, it could indicate the regime’s hardened intent to carry on the war.

Mr Trump confirmed that the US would continue its blockade of Iranian ports while remaining prepared for further action if negotiations fail. But when, or if, further talks take place is far from certain.

Vice President JD Vance paused his trip to join peace talks following a lack of commitment from Tehran. Iranian state media reported negotiators had described further talks with the United States as a “waste of time.”

Despite these developments, the NASDAQ, S&P and Russell remain close to their all-time highs. The Dow is lagging a touch, but it does appear that investors are still keen to add to their exposure. Most seem convinced that the war will soon be over, or that it will have little effect on the US economy, even if energy prices remain relatively elevated. Supporting the latter take, the first quarter earnings season has got off to a strong start.

Analysis from FactSet shows that of the 10% of S&P 500 constituents that have reported so far, 88% have beaten expectations for earnings per share, while 84% have exceeded forecasts for revenues.

Meanwhile, investors have shrugged off any concerns they may have had over losses in private equity, as well as the return on investment in AI. Today’s key earnings updates come from Tesla, IBM, Texas Instruments, Boeing and AT&T.

European stock indices drifted lower this morning. As welcome as the extended ceasefire deadline may be, investors showed scant interest in adding to their exposure across UK and European equities. Having said that, there was no strong evidence of a rush to dump stocks either.

Source: TN Trader

The session so far could be best described as exhibiting signs of mild indifference. Hopefully, this doesn’t indicate that summer is coming early.

President Trump confirmed the ceasefire would remain in place until Iran submits a unified proposal to end the war with the US and Israel. The announcement followed reports that Vice President JD Vance’s expected trip to Pakistan for negotiations had been postponed after Tehran indicated it would not participate in talks. Reports from Iranian state news suggested that Iran’s negotiators remain reluctant to attend further meetings with the US administration.

Meanwhile, Dutch semiconductor equipment manufacturer ASML reported a strong set of quarterly results, which has helped to boost confidence in corporations heavily invested in AI.

It was another quiet start across FX this morning. The main feature was an uptick in sterling following the release of the UK’s latest inflation data. The UK’s headline CPI rose to 3.3% year-on-year in March, as expected, from 3% previously. This was its highest reading since December and was driven in part by higher fuel costs linked to the conflict.

The news raised concerns that the Bank of England (BoE) may have to raise interest rates to curb inflation more later this year. But this seems unlikely given recent comments from BoE Governor Andrew Bailey.

He, like many other central bankers, is reluctant to hike rates on the back of a jump in crude oil prices, which should prove to be temporary, and which will, in any case, have a dampening effect on economic activity. Meanwhile, the US dollar was little changed, and the cash Dollar Index was trading around 98.00, with no clear intention over where it would go next.

Source: TN Trader

Gold staged a sharp rebound last night, which carried on through the Asian Pacific session and into early European trade. Yesterday, gold lost around 2.2%, having opened the day at $4,830 and then breaking below $4,670.

It staged a last-minute rally into the close, which looked as if it could have been simple short covering. If so, does that mean that gold is vulnerable to another round of selling?  Time will tell.

But so far today, gold has failed to recoup all its losses from yesterday and hasn’t even got close to getting back above $4,800. By mid-morning, it seemed to be stuck around $4,750. The US dollar is playing a role here. Concerns about a prolonged disruption in the Strait of Hormuz continue to support the dollar’s safe-haven appeal, which has limited upside momentum for the precious metal.

Source: TN Trader

Comments from Federal Reserve Chair-designate Kevin Warsh were interpreted as slightly hawkish after he emphasised independence from the White House and indicated he had made no promises regarding rate cuts.

Silver has followed gold’s moves very closely. Yesterday evening, it dropped below $75.40, having begun the session above $80.00 per ounce. But it bounced back sharply into the close and continued to rally throughout the overnight session, topping out just shy of $78.70 as Europe opened for business.

Since then, it has drifted lower, with investors keeping a close eye on the cash Dollar Index, which appears to be holding around 98.00. If the dollar manages to rally from here, then this looks likely to weigh on both gold and silver in the near-term at least.

Source: TN Trader

Both WTI and Brent crude oil pushed higher this morning, despite President Trump announcing an extension to the ceasefire deadline with Iran. The news eased immediate fears of escalation.

But there are concerns that this will simply extend the duration of the conflict, and the Iranian regime seems in no mood to reopen peace negotiations. This could be a bluff, and much will now depend on the effectiveness, or otherwise, of the US blockade of Iranian ports around the Strait of Hormuz.

But as Tehran refuses to come to the table while the US blockade is in place, while continuing to fire on shipping attempting to transit the Strait, the probability increases that this war could last well beyond the end of this month.

Meanwhile, many Asian Pacific countries, as well as Europe, face shortages of energy products, fertilisers and other key goods. Yesterday evening, front-month WTI briefly broke above $92.00 per barrel before dropping back sharply below $88. Prices are now back above $90. Bear in mind, they were within a few cents of $79 on Friday afternoon.

Source: TN Trader

Earlier this morning, Bitcoin spiked to a fresh 10-week high when it topped $78,400. It has now added around 20% in a little over three weeks, having rallied off $65,000 at the end of March. Today’s push higher came as President Trump extended the ceasefire with Iran and gave no fresh deadline.

Investors interpreted the ceasefire extension as a near-term de-escalation. This is despite the uncertainty that Tehran would formally accept the extension. The US Navy continues to blockade Iranian ports around the Strait of Hormuz. This is denying Iran the opportunity to sell its crude oil production and thereby further damaging its already fragile economy.

Bitcoin is increasingly behaving as a hybrid asset, drawing inflows during periods of easing tensions and as a hedge during geopolitical uncertainty. Technically, $80,000 is the next significant resistance level, and the daily MACD suggests moderate upside momentum.

Volatility has eased slightly this morning, after a sharp increase in the previous session, as US stock index futures moved higher following confirmation of the ceasefire extension. The economic calendar remains relatively quiet, with weekly oil inventory data expected later in the session and PMI releases scheduled for Thursday.

Reports suggesting Tehran may be easing its stance on the blockade remained difficult to verify, although they added to speculation surrounding negotiations. President Trump reiterated that Iran’s government remains “seriously fractured,” while Federal Reserve chair nominee Kevin Warsh confirmed during testimony that the White House had not demanded rate cuts from him.

Geopolitical risks remained central to sentiment. Singapore’s president warned that if tensions between the United States and China escalate in the Pacific, the Strait of Hormuz situation could serve as a “dry run” for future disruptions. Corporate earnings were also expected to influence markets, with IBM and Tesla reporting later in the session.