S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
A relatively quiet week was concluded with the crucial publication of NFP data. These turned out to be surprisingly strong – so much so that in the event of rising inflationary concerns, FOMC policymakers will likely not have to worry excessively about a cooling labour market. Consequently, expectations for Fed rate hikes rose, as did (albeit slightly and temporarily) US Treasury yields. Precious metals, in turn, came under pressure (although the sell-off there ultimately proved shallow).
📈 Equities
We begin the week with gains across most Asian markets. Korea’s Kospi stands out – unsurprisingly – gaining 4.4%, driven by positive sentiment towards semiconductor companies. SK Hynix is currently up 7.1%, while Samsung has gained 4.8%. This is partly due to the launch of ChatGPT-6 Astra, which is designed to be not just a standard chatbot, but a kind of computer operator. The main emphasis has been placed on complex reasoning and executing multi-step tasks directly on a computer (such as working with spreadsheets or troubleshooting software issues). Optimism is visible across the broader semiconductor sector. On Friday, the iShares Semiconductor ETF (also known as SOXX) gained over 3.5%. Both the Hang Seng and the Shanghai SE Composite are in the red this morning. However, it is worth noting that the Chinese authorities have decided to inject over $50 billion into the eight largest state-owned banking and insurance companies. Most of the recapitalisation programme is to be funded through bond issuance. 🌍 Geopolitics The weekend brought no breakthrough. On Sunday, the US Secretary of Energy suggested that a nuclear deal with Iran is highly unlikely at this stage, and the objective of the operation will be the permanent destruction of Tehran’s combat and radar capabilities. This triggered an immediate reaction from the OPEC+ cartel, which withdrew any plans to increase oil production at its Sunday meeting. On the same day, Tehran announced the creation of a new ‘maritime exclusion zone’ beyond the Strait of Hormuz itself. Iranian officials declared that the strait remains under full Iranian control. The US categorically rejects reports of the shipping route’s closure, calling them propaganda. Washington reported that it has cleared mines from the main routes and is supporting the flow of commercial vessels. However, the shelling is causing a decision-making paralysis among some shipowners. Just a day earlier, the Islamic Revolutionary Guard Corps fired ballistic missiles and drones at US warships patrolling the Strait of Hormuz. In response, US forces carried out an immediate retaliatory strike, hitting three Iranian tankers, one of which sank in the Gulf of Oman.
🛢️ Energy commodities
A lack of optimistic headlines from the Middle East is driving further increases in key energy commodity prices.
- Currently, Brent is trading at nearly $98 per barrel and WTI at almost $93, representing increases of 10% and 8% respectively compared to levels recorded exactly a week ago.
- Natural gas on the Dutch TTF exchange is also rising, reaching $74 per MWh (+7% on a weekly basis).
