US-Iran Deal Progress and Inflation Data Shape Global Financial Markets
Market Overview and Key Financial Developments
A look at the day ahead in European and global markets from Tom Westbrook
US-Iran Ceasefire Extension and Its Market Impact
A weekend wait looms over markets as sources have told Reuters that the U.S. and Iran have reached an agreement to extend their ceasefire and reopen the Strait of Hormuz, with the crucial final step now resting with U.S. President Donald Trump's approval.
For now, market moves have been modest in Asia. The dollar was steady and bonds held on to gains made earlier in the week, as investors hope higher fuel price pressure will leave Trump little room to walk away.
Middle East Peace Deal and Global Interest Rates
Rising global interest rates are also adding urgency for a Middle East peace deal, as markets worry that higher borrowing costs could compound economic strain and weigh on risk assets.
Inflation Data and Central Bank Policy Expectations
Inflation figures are due across Europe on Friday and although rises are expected to be fairly small, it will probably reinforce market expectations for a rate hike in June.
Japan's Inflation and Currency Dynamics
Tokyo inflation held below Japan's 2% target for a fourth straight month, figures released on Friday showed, yet a rebound in factory output is keeping the case for a rate hike in Japan next month very much alive.
The yen was trading just on the strong side of 160 per dollar, a level that has traders wary and unwilling for now to test the resolve of authorities to defend the currency.
Equity Markets and AI-Driven Stock Surges
Meanwhile, AI euphoria carried stocks higher.
AI Server Revenue and Tech Stock Performances
Dell raised its AI server revenue forecast and the stock price soared 39% in after-hours trade. Over in Hong Kong, computer-maker Lenovo has been on a tear, jumping 18% for a weekly gain of nearly 50%, the largest weekly rise since 1997.
Key Market Events to Watch
Key developments that could influence markets on Friday:
- Inflation data in Germany, France, Italy
- Canadian GDP
- US-Iran deal progress
(Reporting by Tom WestbrookEditing by Shri Navaratnam)
