'BRIDGE DAY' LOOMS
Equity markets logged gains last week as suggestions that the US may conclude military action against Iran without needing to strike a deal. A Strong US jobs report also helped to boost investor sentiment.
Over the weekend, President Trump announced that if the Strait of Hormuz wasn't opened by this evening, the US might move to take out all Iranian power plants and bridges. US equities brushed off the threats yesterday and closed higher. European markets were closed yesterday but opened in the green in early trading on Tuesday.
This week, markets will continue to watch developments in the Middle East as President Trump's deadline approaches. Elsewhere, US inflation data will be released on Friday and Hungary goes to the polls on Sunday with Prime Minister Viktor Orban trailing in the polls.
Developments in the Middle East continued to dominate markets last week. Markets rallied strongly at the start of a short trading week as Trump suggested that he may be willing to cease operations against Iran with or without a deal. After the initial strong rally early in the week, sentiment slowed but remained positive as a US employment report showed that the economy had added a healthy 178,000 jobs last month - well in excess of expectations. The weekend saw a social media post and a press conference from the US President which threatened action against all Iranian bridges and power plants if the Strait of Hormuz is not opened by this evening. US equity markets looked past the threats yesterday and logged another positive session. European markets were closed yesterday but opened in the green in early trading on Tuesday morning.
The S&P 500 finished the week up 3.4% (-3.8% YTD) whilst the STOXX 600 in Europe added 3.9% in the week (0.75% YTD). Optimism over a ceasefire in the Middle East was the main drivers while a jobs report showed that the US added 178,000 jobs in March- in excess of expectations.
Bond yields fell last week, (bond yields fall as bond prices rise) on both sides of the Atlantic. The 10-year US Treasury yield dropped 8bps last week to settle at 4.32% as investor sentiment was buoyed by the prospect of an end to the war with Iran . The German bund equivalent fell by ~10bps to 3.0%.
- Tue 7th - Global PMI's
- Wed 8th EU - PPI inflation data * US - FOMC meeting minutes
- Fri 9th US - March CPI inflation data
This is intended as a general review of investment market conditions. It does not constitute investment advice and has not been prepared based on the financial needs or objectives of any particular person.