Middle East Truce Boosts Global Markets, Dollar Dips on Optimism

Global Markets Surge on Middle East Truce Talks and Economic Data

Market Overview and Key Developments

A look at the day ahead in European and global markets from Gregor Stuart Hunter

Global Equities and Currency Movements

Global equities are setting new records and the dollar is down for a ninth consecutive day to its weakest levels since the Iran war began as traders ramped up bets the conflict in the Middle East may end soon.

Adding to the optimism, U.S. President Donald Trump said in a post on Truth Social that direct talks between Israel and Lebanon “will happen tomorrow”.

Stock Market Performance

The MSCI All-Country World Index climbed 0.3% to an all-time high, as the benchmark compiler’s broadest gauge of Asia-Pacific shares outside Japan advanced 1.2% and the Nikkei 225 jumped 2.2% to a fresh record. S&P 500 e-mini futures were up 0.2%.

In early European trades, pan-region futures were up 0.3%, German DAX futures nudged up 0.2% and FTSE futures were 0.1% higher.

Asian Markets and Economic Data

Chinese shares advanced 0.9% and the yuan held steady in offshore trading in Hong Kong after data showed Asia’s largest economy grew 5.0% in the first quarter compared with a year earlier, beating analysts’ expectations as policymakers braced for the fallout from the Iran war.

Corporate Earnings Spotlight: TSMC

In Taiwan, emerging-market bellwether TSMC, a linchpin of the AI sector, is set to post quarterly earnings later on Thursday, with a 50% surge in net profit expected as demand for its advanced chips soars.

Currency and Central Bank Developments

In currency markets, the U.S. dollar index was down 0.1% as geopolitical worries eased and traders brought forward expectations of monetary policy easing from the Federal Reserve.

Federal Reserve Leadership Tensions

On Wednesday, Trump threatened to fire Fed Chair Jerome Powell from his separate seat on the U.S. central bank’s Board of Governors if Powell does not vacate that post as well when his term as Fed chief ends on May 15. The intensifying standoff has upended the Fed’s usually smooth transition of power and renewed concerns about its independence.

Notable Events and Market Influencers

Passing of Mark Mobius

And marking the end of an era for emerging markets, Mark Mobius died on Wednesday at the age of 89. The veteran investor was still touting new opportunities as recently as January, when he speculated that Nicolas Maduro’s ouster could lead to Venezuela reopening to investors.

Key Developments to Watch

Key developments that could influence markets on Thursday:

Corporate Earnings

TSMC, Netflix, PepsiCo, Tesco, Schroders

Economic Events

UK: GDP estimate, services, industrial output, manufacturing output, goods trade balance for February

Euro zone: Final HICP for March

Debt Auctions

France: 3-year, 5-year, 6-year, 7-year, 12-year, 13-year, 17-year and 27-year government debt

UK: 23-year government debt

(Reporting by Gregor Stuart Hunter; Editing by Jamie Freed)