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Asian stocks to have best week in 2022 as U.S. talks with Iran set the stage for a record-breaking week
As Israel began talks with Lebanon, hopes grew for an end to Middle East hostilities and the opening of the Strait of Hormuz. Iran cited Israel’s continued attacks on Lebanon in its ceasefire deal with the U.S. which required Iran to reopen Strait of Hormuz, through which typically a fifth global energy supply passes. On Saturday, delegates from Washington and Tehran will hold talks in Pakistan. MSCI's broadest Asia-Pacific share index outside Japan gained 0.9%, bringing it to 7.3% in the past week. This is the highest since November 2022. China's ChiNext was the leader with a jump of 3.8%. U.S.?S&P500 e-mini Futures reversed earlier loss to trade flat. Rupal Agarwal is Asia Quant Strategist at Bernstein Singapore. She said: "We believe that this could be beginning of the end of the war. This presents an opportunity for investors to focus on prewar trends and fundamentals." "We recommend adding some beaten-down titles." The S&P 500 gained 0.6% on Thursday. MSCI's equities benchmark for global equities also made modest gains. This was after Israeli Prime Minister Benjamin Netanyahu announced that he wants direct talks with Beirut a day following the worst bombardment in the war in Lebanon, which killed over 300 people. The oil markets remain jittery and are slowly rising from the one-month lows of this week. Brent crude climbed 1.5% to $97.33 per barrel. The Strait of Hormuz is still largely closed for shipping. Marine traffic was well below 10% normal levels on Thursday, as Tehran asserted control over the strategic waterway. The global market was shocked by the closure of the Strait during the six week Iran War. Oil prices soared and energy supply became tighter. U.S. president Donald Trump stated in a Truth Social post that Iran is doing a "very bad job" allowing oil through the strait. "That's not the agreement we had!" Regional Impact In an early indication that the Middle East conflict was feeding cost pressures in the world's largest economy, China's Factory-gate Prices rose for the first time in three-and-a-half years in March. Official data showed. Sanae Takaichi, the Japanese prime minister, said at a cabinet gathering on Friday that Tokyo will release 20 days worth of oil reserves in May to ensure a stable domestic supply. Japan's Nikkei 225 vaulted 1.8%, ?with shares in heavily weighted Fast Retailing climbing to a record high after the Uniqlo owner posted a stronger-than-expected jump in profits on ?Thursday. The yen weakened by 0.2% against the dollar. South Korea's KOSPI gained 1.4%, its best performance in a week in almost five years. The Bank of Korea warned that the conflict in the Middle East could?derail the growth and worsen the inflation. Analysts from ING wrote that the BOK sent a carefully calibrated signal to leave future policy options open. The U.S. Dollar Index, which measures greenback strength against a basket of six currencies, rose 0.1% to 98.93. Data released on?Thursday revealed that weekly unemployment claims rose by 16,000, to 219,000. Continuing?claims also fell by 38,000, to 1.794 millions. This is the lowest level seen since May 2024. Core PCE prices also increased 0.4% in the second consecutive month, reflecting an increase of 3.0% year-on-year. The yield of the 10-year Treasury Bond in the United States increased by 0.4 basis points to 4.295%. Bitcoin was down by 1.0% to $71,723.34, and ether was down by 1.3% at $2,185.33. (Reporting and editing by Shri Navaratnam, Kevin Buckland and Gregor Stuart Hunter)
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Australia and Singapore leaders pledge closer energy relations to tackle global supply shortage
The Australian Prime Minister Anthony Albanese met with his counterpart Lawrence Wong in Singapore on Friday. They vowed to work together more closely in order to maintain energy security in the face disruptions brought about by the Middle East conflict. Singapore, the oil trading hub in Asia, is the world's largest petrol supplier and also a major diesel and jet fuel supplier to Australia. In Australia, the shortage of diesel has impacted the mining and farming sectors. The leaders agreed to "maximize efforts" to increase their energy security, including ensuring the flow of diesel and LNG. In a joint press release, they said: "We reaffirmed that we will work together, especially during crises, to support an resilient, rules-based, multilateral trading system, which underpins global stability in times of disruption." SOME AUSTRALIAN PETROL STATIONS ARE DRY Australia's limited stocks and dispersed distribution networks have been unable to keep up with the demand for petrol due to panic buying. Albanese stated that Australia provides about a third of Singapore's liquefied gas imports, and about 26% its refined fuel. "It is vital that we coordinate and work together to respond to the global fuel crisis," he stated during a press conference held with Wong. This is a win-win situation. Wong said that Singapore has no plans to?cut back on exports in spite of the global energy shock. He said, "We did not have to do this even during the darkest days COVID and we won't do it in this energy crisis." "It won't happen." The leaders said that the commitments made on Friday would be reflected by a legally-binding protocol to the existing free trade agreement. They visited a LNG terminal in Singapore and the Singapore Refining Co. Close the Strait of Hormuz Australia is one of many Asian countries that are worried about fuel supply after Iran closed the "Strait of Hormuz", through which a fifth of world oil and gas passed before the Middle East conflict. The shipping traffic in the Strait is at a standstill, despite the fragile peace agreement between the U.S. The?U.S. Australia has only two refineries compared to eight in 2005. It uses about a million barrels a day, and imported 84% its petroleum product demand. Singapore is one of Asia's major refinery centres, with three refineries which have a combined capacity of 1.2 million barrels a day. However, refineries have reduced output following the disruption of crude supply caused by the closing of the Strait of Hormuz. Singapore accounted 54.7% or almost 6 billion litres of Australia's fuel imports according to NRMA statistics released in late March. South Korea was second, with 22.5% and India third with 11.5% or 1,25 billion litres. Since early March, Albanese and Foreign minister Penny Wong are in talks with their Asian counterparts about fuel supply. Australia says it has held discussions with Brunei as well as China, Indonesia, Japan and Malaysia. Helen Clark reported from Perth and Xinghui Kok in Singapore. Additional reporting was done by Renju Jose, Sydney. Writing and editing by Jamie Freed and Clarence Fernandez.
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Zelenskiy: Ukraine will face months of diplomatic and militaristic pressure
The President of Ukraine, Volodymyr Zelenskiy, said that the spring and summer would be a difficult time for Ukraine because it would face pressure both on the battlefield as well as diplomatically in order to end the war. Zelenskiy claimed that Ukraine's partners asked Kyiv, as global oil prices soared because of the 'Iran war' and escalating tensions across 'the Middle East', to reduce its attacks on Russia's sector. He did not identify the partners. He said that, if Russia wants to deescalate the situation, it must stop its own attacks on Ukrainian energy infrastructure and accept to resume trilateral talks, which are mediated by Washington. He did acknowledge, however, the fact that the U.S. is currently hesitant to devote much more time towards the peace process in Ukraine. This spring-summer will be difficult from a diplomatic and political standpoint. Zelenskiy said in comments released by his office Friday that there could be pressure on Ukraine. "There will be pressure also on the battlefield." I believe that it will be difficult for us to get through September. Zelenskiy reiterated calls for increased international pressure against Russia. Zelenskiy expressed his hope that the U.S. sanctions against Russian oil, which were temporarily lowered during the conflict, would be fully reinstated following the announcement of a two-week truce by the U.S. on Tuesday. In 'March, the U.S. granted a 30-day exemption to countries that wanted to purchase Russian oil or petroleum products sanctioned by the U.S. in an effort to stabilize the global energy market which was roiled by the Iran War. PARTNERS ASK THE UKRAINE TO REDUCE STRIKES AGAINST RUSSIAN OIL. In recent weeks Ukraine has intensified attacks against Russian energy facilities in an attempt to reduce its oil revenue, as Moscow was enjoying the soaring prices of oil and the easing U.S. sanctions. The Ukrainian military claimed responsibility for over a dozen strikes on Russian oil installations. The most notable attacks were against Russia's Baltic ports, Ust-Luga, and?Primorsk. These are the largest outlets of the country to export petroleum. "Russians are now having major problems with their facilities. We respond to any strikes on our energy sector - which is fair. If the Russians want to stop this, they need to stop their strikes. Then we will respond in kind. Zelenskiy said that Ukraine's partners asked Ukraine to reduce its strikes against Russian oil facilities during the 'blockade of the Strait of Hormuz by Iran'. He responded that Russian crude oil has 'no significant impact' on the global oil market. Zelenskiy stated that if Russia wants to de-escalate the war, then trilateral talks on diplomatic ways to end the conflict should be held within the next three months. Three trilateral rounds of talks in this year have not produced any significant progress. Ukraine has refused to 'acquiesce to Russia’s demands that it give up the last?areas? of eastern Donbas that Moscow was unable to conquer. The frontline is more than 1,200 kilometers long, and Russia and Ukraine have increased their drone attacks against targets that are far away from the front line. Reporting by Olena Hartmash, Editing by Daniel Flynn & Jan Harvey
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MORNING BID EUROPE - "That is not what we have agreed to!"
Gregor Stuart Hunter gives us a look at what the day will bring for the European and Global markets. The U.S.Iran 'ceasefire' agreed on this week appears to be strained, as Israeli attacks on Lebanon prompted Hezbollah retaliation. Meanwhile the lack of ships resuming a?passage? through the Strait of Hormuz prompted a new tirade by?the ___________. leader. Investors became nervous when Iran claimed that Israel's attacks on Lebanon violated its agreement with the United States. This halted the risk-on mood that followed the deal. S&P 500 futures were unchanged on Friday, while MSCI’s broadest Asia-Pacific share index ex-Japan rose 0.8%. Benjamin Netanyahu, the Israeli prime minister, said on Thursday that he wanted to talk with Beirut. This was a day following the most intense Israeli bombardment in the war which killed more than 300 people. Hezbollah launched a missile against Israel on Friday, which triggered air raid sirens in Tel Aviv and other cities. While on Truth Social, U.S. president Donald Trump criticized Iran for its "very poor" job of allowing ships to pass through the Strait. "That's not the agreement that we have!" He wrote. During the war, about one-fifth of all oil and gas shipments went through Strait of Hormuz. Traffic was below 10% on Thursday as ships navigated mines, bureaucracy and required Iranian approval for each vessel. Oil prices have soared, and energy supplies are tightening as a result of the strait being effectively closed during Israel and the U.S.'s six-week conflict with Iran. Official data revealed that factory gate prices in China increased for the first time since three and a quarter years in March. Brent crude rose by 0.7% to $96.57 per barrel, on fears about supply. The Japanese Prime Minister Sanae Takaichi said on Friday that Japan will release 20 days worth of oil reserves in May to ensure a stable domestic supply. Fast?Retailing shares set a new record in Japan as the owner of Uniqlo reported a higher-than-expected profit on Thursday. Early European?trade saw pan-regional futures up 0.6%. German?DAX Futures also rose 0.6%.?FTSE Futures increased 0.2%. The following are key developments that may influence the markets on Friday. * Germany CPI and HICP for the month of March The current account balance of Germany for February The U.K. government auctions 1-month, 3-month and 6-month debt
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Oil prices rise as attacks on Saudi oil facilities cause anxiety and bring Hormuz to a standstill
The price of oil rose on Friday due to renewed?anxiety about Saudi Arabian supplies and?as tanker travel through the Strait of?Hormuz?remained largely?frozen. Prices continued to fall as the nerves of Americans and Iranians relaxed after a two-week fragile ceasefire. Israel, however, signaled a possible diplomatic opening by saying that it was prepared to start direct talks with Lebanon in the shortest time possible. Brent crude futures rose 58 cents or 0.60% to $96.50 per barrel at 0338 GMT. West Texas Intermediate futures rose 49 cents or 0.50% to $98.36 per barrel as of 0338 GMT. Both contracts have lost 11% this week. This is the largest weekly loss since June 2025. Saudi state-run news agency SPA reported that attacks on Saudi energy plants have 'cut the kingdom’s oil production by approximately 600,000 barrels a day, and throughput of its East-West Pipeline has been reduced by around 700,000 bpd. ANZ analysts stated in a 'Friday note' that the report has increased their concern about further disruptions to oil supplies. Tony Sycamore, IG'market analyst, said in a note that the initial relief after President Trump announced a two-week truce has given way to underlying concerns. Sycamore stated that "all eyes are firmly focused on the tanker tracking flows through Strait of Hormuz, looking for any increased activity in advance of Friday's peace talks in Pakistan." The volume of ships passing through the strait was well below normal levels on Thursday, despite the ceasefire. Tehran maintained its control over the situation by admonishing the vessels to stay within its territorial waters. Iran and the U.S. reached an agreement on Tuesday for a ceasefire lasting two weeks, brokered by Pakistan. However, fighting continued after the announcement. Analysts believe Pakistan will push for a durable peace agreement, but it may not have the leverage to force the reopening the strategic waterway. A Tehran official said on April 7 that Iran wanted to charge ships for passing through the Strait as part of a peace agreement. Western leaders and the U.N. shipping agency have rejected the idea. Conflict began when Israel and the U.S. launched air attacks on Iran on February 28, effectively closing down the crucial oil and gas artery. John Paisie, President of energy consultants Stratas Advisors, stated that Brent prices could reach $190 a barrel if the Strait of Hormuz flows remain at their current levels. If Iran permits increasing?flows, the price of crude oil will be moderated but still far above pre-war levels. JPMorgan reports that drones and missiles have damaged 50 infrastructure assets in the Gulf over the past six weeks. Around 2.4 million barrels per day of oil refining have also been shut down.
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Gold gains for the third consecutive week as US dollar strength offsets US rate outlook
Gold prices fell on Friday due to a stronger dollar and uncertainty over the U.S. Iran ceasefire, but they remained on course for a third weekly 'climb' as investors priced in more aggressive and earlier U.S. interest rate cuts. This supported non-yielding gold. By 0316 GMT, spot gold had fallen 0.1% to $4,759.54 an ounce. Metal has, however, gained 1.8% this week. U.S. Gold Futures for June Delivery fell by 0.7% to $4.782.70. Dollar index increased, causing greenback bullion to be more expensive for holders other currencies. Kyle Rodda is a senior financial analyst at Capital.com. He said, "There's not much clarity on how the Middle East ceasefire will develop and what it means for the energy markets. So we're sort of in a holding pattern with?gold" going into the last session of the week. Spot gold is down?about 10% in the last few weeks since the U.S. - Israel conflict with Iran began on February 28. High energy prices are fueling inflation fears and higher interest rates. On Friday, the fragile ceasefire that had existed between the U.S.A. and Iran for two weeks showed signs of strain as Washington accused Tehran of breaking promises made on the Strait of Hormuz. Brent crude has fallen more than 11% in the past week, despite the optimism that a ceasefire would reopen Strait of Hormuz. This is where about 20% of world oil and natural gas passes. If things go wrong, gold could quickly drop to the mid-$4,000 range. If the ceasefire is maintained and a peace agreement looks more likely, we may be able to push the price of gold up to $5,000," Rodda said. The U.S. Personal Consumption Expenditures Index,?the Federal Reserve preferred inflation gauge?, rose 2.8% over the past 12 months, as expected, and is likely to rise further in March. Investors will be watching for the U.S. Consumer Price Index data for March, which is due later today, to get more clues about Fed's monetary policies. According to CME's FedWatch Tool the markets are now pricing in a 31% probability of a U.S. interest rate cut at the Fed's meeting in December. This is up from 20% the previous session. Silver spot rose 0.9% per ounce to $75.74, while platinum fell 2% at $2,061.06 and palladium dropped 1.2% to $1539.43.
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Australia PM in Singapore to secure fuel supply from regional allies
The Australian Prime Minister Anthony Albanese is scheduled to meet with his Singaporean counterpart Lawrence Wong on Friday. Canberra will be looking to secure fuel from regional allies due to disruptions caused by the Middle East conflict. Singapore, Asia's oil-trading hub, is Australia’s largest petrol supplier and major supplier of diesel and jet fuel. Albanese, after arriving in Singapore late Thursday night, told reporters that the relationship was important at a time where fuel security is a global concern due to the conflict in Middle East. The main consumers of diesel fuel in Australia, farming and mining, are being affected by the shortages caused by limited stocks and dispersed distribution networks. A panic buying spree also dried up several petrol stations across Australia. Albanese stated that Australia supplies around one-third Singapore's imports of liquefied gas, while the city-state gets about 26% its refined fuel. "Australia and Singapore have a strategic alignment. We have a mutual respect for each other's values, and we are in a trusting relationship. Albanese stated that it is important to be able to rely on each other in difficult times. Australia is among a number of Asian nations that are concerned about fuel supply after Iran closed down the Strait of Hormuz. This was the route through which a fifth of world oil transited prior to its war with Israel and the U.S. Ship traffic in the Strait is at a standstill, despite an fragile peace agreement between?the U.S.A. and Iran. Australia imports 84% of the petroleum products it needs. Two refineries are now in operation, down from eight in 2005. Singapore is one of Asia's major refinery centres. It has three refineries, with a combined capacity of about 1.2m barrels of crude oil per day. However, refineries cut production after the Iranian closure of Strait of Hormuz disrupted their crude supply. According to statistics released by the road insurer NRMA late in March, Singapore accounted for close to 6 billion litres of Australia's fuel imports. South Korea was second with 22.5%, and India third with 11.5% or 1,25 billion litres. Since early March, Albanese and Foreign minister Penny Wong have been in contact with their Asian counterparts to discuss?fuel supply. The Australian government said that it had held talks with Japan and South Korea. It also claimed to have met with Indonesia, Malaysia, Brunei as well as China. Reporting by Renju José in Sydney and Helen Clark, Perth; Additional reporting from Xinghui Kok in Singapore; Writings by Praveen Mnon; Editing Jamie Freed
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Japan has ruled out the major risks of private credit to domestic consumers for now
Satsuki Katayama, Japanese Finance Minister, said that private credit is not a major problem in Japan at the moment. However, he noted that risks related to this $2 trillion industry may be discussed next week at the G7 finance summit. "Japan’s exposure to private credit is not very large." "It's not like there are no investments, but at this stage we don't view this as an important issue in Japan," she said at a press conference. Her comments coincide with the 'Financial Services Agency of Japan' checking private credit exposure in major financial institutions amid growing concerns about emerging strains within the $2 trillion private?credit market. Katayama stated that she keeps herself updated with the latest developments by receiving briefings from financial watchdogs. She added that the Group of Seven finance ministers meeting in Washington next week could raise questions regarding the risks and whether they are being monitored adequately. She added, "I do not think that the current situation has developed to the same extent as past crises." Retail investors in the United States are fleeing the private credit funds due to concerns about transparency, valuations, and disruptions related to artificial intelligence. In recent years, Japanese banks have increased their financing of global private credit funds to increase returns. (Reporting and editing by Christian Schmollinger; Makiko Yamazaki)
MORNING BID AMERICAS - Big relief rally for now
April 8th -
Alun John gives us a look at what the U.S. markets and global markets will be like today.
The markets exhaled Wednesday following the announcement of a two week?ceasefire? between the U.S.A. and Iran. This was first announced by U.S.President Donald Trump on Tuesday night, just before his deadline for Tehran to open the Strait of Hormuz. Stocks and bond prices soared on the news, and the dollar lost some of its recent appeal as a safe-haven currency. Analysts and traders will be 'wary' about the durability of the ceasefire, and whether it can lead to a lasting resolution to the conflict and energy crisis.
Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
BIG RELIEF FOR NOW Since the beginning of the Iran War, the price of oil has dominated the global markets. It's no surprise that the news of a ceasefire, which sent both Brent and WTI back below $100 per barrel, has caused some major movements around the globe. S&P 500 Futures are up by 2.5%. Major indexes in Europe and Asia posted or will post their largest daily gains since last April. Japan's Nikkei rose over 5%, South Korea's KOSPI by more than 6% and Europe's broader?STOXX600 was up around 3.5%. Travel, banks, technology, and industrials are the main beneficiaries of lower energy prices and falling yields. A South Korean standout is chipmaker SK Hynix, which rose 15%, helped by expectations high for its own quarterly results following Samsung's monster profit forecast on February 2. The energy stocks have been the worst performers?on Tuesday, but are still up a lot for the year. Meanwhile, the safe-haven dollar slid. Dollar index falls from recent 11-month-highs. The U.S. currency is retreating on all developed markets - including the Japanese yen which has been under fire. It has retreated below 160 per dollar after almost crossing this threshold on Tuesday. The announcement has boosted bond prices, and U.S. Treasury rates have fallen as traders bring the prospect of Fed rate reductions back into the discussion. The yields of euro zone government bonds also dropped as traders reduced their bets on rate hikes by the ECB. The biggest move has been in Britain where yields have fallen over 20 basis points. The traders will be hoping that the ceasefire of two weeks is effective and lasting as intended. The ceasefire is conditional on Tehran reopening Strait of Hormuz. It has said that it would do so if the attacks against Iran stopped.
The markets aren't saying we're in the clear yet. Brent above $90 was a bad sign for the world's economy and stock markets just a few months ago. We are nowhere near the amount of central banks easing that was priced before the war. To keep the optimism going, U.S. - Iran negotiations, which are set to start on Friday, will have to be more positive than they were before. A number of contentious issues?will likely prove to be a problem. The news of a ceasefire is a huge improvement over President Trump's bellicose threats and rhetoric earlier in the week.
Chart of the Day A temporary ceasefire and reopening the Hormuz will allow Middle Eastern oil exporters to move significant volumes of crude trapped in the Gulf since hostilities started, providing global energy markets with some 'immediate relief.' writes Ron Bousso, ROI Energy Columnist.
Watch today's events
* U.S. ?10-year note auction (1 p.m. EDT)
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(source: Reuters)