Macro update
AI rally pauses: Asian equities weakened as the chip-led rally lost momentum, with South Korea’s KOSPI falling around 3.5% after nearing the 8,000 level, while MSCI’s Asia ex-Japan index slipped 0.6%.
Middle East ceasefire falters: President Trump said the US-Iran ceasefire was “on life support”, with Tehran and Washington still far apart on a peace proposal and the Strait of Hormuz remaining largely shut.
Oil stays elevated: Brent crude traded around $104 a barrel as fragile diplomacy kept supply concerns elevated, with analysts warning renewed escalation could drive prices higher.
US inflation in focus: Markets are awaiting April CPI data, with headline inflation expected to rise to 3.7% year-on-year, increasing the risk of the Federal Reserve keeping rates higher for longer.
Dollar strengthens: The dollar advanced broadly on safe-haven demand and higher rate expectations, pressuring emerging market currencies as the Indonesian rupiah and Indian rupee fell to record lows.
Bond yields climb: Global yields remained under pressure, with Japan’s 10-year yield hitting a 29-year high of 2.54% following a hawkish Bank of Japan readout, while gilts sold off amid UK political uncertainty.
FTSE 100 weighs on key support
The FTSE 100 is putting pressure on its 10,175-to-10,162 recent lows, a slip through which looks probable with the 25 March high at 10,118 being in focus. Further potential support sits between the late January-to-early March lows at 10,096-to-10,049.
Only a bullish reversal and rise above Monday’s 10,287 could lead to a bullish trend reversal taking place.
Short-term outlook: bearish while below 10,287
Medium-term outlook: neutral with a bearish bias while below the 6 May high at 10,488