Macro update
Global equities rally: Asian stocks climbed to record highs as optimism around a potential US-Iran peace deal and strong technology earnings boosted risk appetite, with MSCI’s Asia-Pacific index reaching an all-time high and Wall Street also closing at fresh records.
Nikkei surges past 62,000: Japan’s Nikkei jumped more than 4% to a record high after reopening from holidays, driven by AI-linked shares following strong earnings and guidance from AMD, Samsung, SK Hynix and TSMC.
Oil steadies after sharp drop: Brent crude traded around $102 per barrel after tumbling nearly 8% on Wednesday, as markets weighed the prospects of a Middle East peace agreement despite lingering uncertainty over Iran’s nuclear programme and the reopening of the Strait of Hormuz.
Dollar weakens as haven demand fades: The dollar index edged lower while the euro and sterling strengthened as investors rotated out of safe-haven assets, though the yen remained under close watch amid speculation of further Japanese currency intervention.
Bond markets reflect easing tensions: Japanese government bonds rallied and US Treasury yields eased slightly, although global yields and energy prices remain well above pre-conflict levels, underscoring persistent inflation concerns tied to higher oil prices.
Focus turns to US payrolls and Fed outlook: Investors are awaiting Friday’s US non-farm payrolls report for signals on the economic outlook, while Federal Reserve officials warned the Middle East conflict could create a sustained inflation shock through elevated energy costs and supply chain disruption.
DAX 40 remains bid
The DAX 40 gapped higher on Wednesday and so far remains bid on Thursday morning, targeting this week’s high at 25,152. Further up lie the 12 February high at 25,293 and the 18 February high at 25,315.
In case of a retracement being witnessed, the 2 March high at 24,898 or the mid-April high at 24,792 may offer support.
Short-term outlook: bullish while trading above the 5 May 24,382 high on a daily chart closing basis
Medium-term outlook: bullish while above the 30 April low at 23,716