Seeking Signals From the Noise

Wall Street, Asian Markets Climb Despite Oil Rises and Iran Tensions

Market Overview and Key Developments

By Jamie McGeever

ORLANDO, Florida, April 6 (Reuters) - Wall Street and the Asian stock markets that were open ticked higher on Easter Monday, as investors shrugged off another rise in oil prices and more belligerent rhetoric from U.S. President Donald Trump on Iran, and awaited more concrete ceasefire news.

Recommended Reading

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.

• Iran rejects ceasefire as Trump says entire country can be 'taken out'
• U.S. service sector cools in March; price paid measure highest in 3-1/2 years
• U.S. crude premiums climb to record levels as Asia, Europe compete for supply
• Goldman Sachs private credit fund defies redemption surge across industry
• BOJ warns of economic hit from Middle East conflict

Today's Key Market Moves

• STOCKS: South Korea up nearly 2%, India +1%, Japan's Nikkei +0.5%. Europe closed. Main U.S. indices up 0.4% or 0.5%.
• SECTORS/SHARES: Eight of 11 S&P 500 sectors rise, led by consumer discretionary and staples, and energy. Starbucks +5%, Boeing +2%. Invesco, Super Micro Computer -5%.
• FX: Dollar dips. Biggest G10 gainers are AUD and GBP. Biggest EM FX gainer is HUF ahead of April 12 election. Bitcoin +4% back above $70,000.
• BONDS: U.S. Treasury yields drift 1-2 bps lower across the curve. Investors eye 3-year auction Tuesday.
• COMMODITIES/METALS: Oil +1%, WTI posts highest close since June 2022. Gold -1%.

Today's Talking Points

Bellicose Rhetoric Loses Punch

After his expletive-laden threats to Iran on Sunday, Trump on Monday said every bridge and power plant in Iran will be blown up by midnight on Tuesday unless a deal is agreed and the Strait of Hormuz is reopened.

But markets didn't flinch - Wall Street rose, the dollar slipped, and U.S. Treasury prices edged lower. Oil rose, but only 1%. Markets are on edge. But they may also now be ignoring Trump's bluster, much of which they have heard before, and looking to trade on more concrete developments.

U.S. Economic Resilience

The Iran war is in its sixth week, U.S. gasoline is above $4/gallon, and WTI oil is 65% more expensive than it was a year ago. Yet the initial March data suggest the U.S. economy is weathering the storm (let's ignore price pressures for now).

Nonfarm payrolls smashed expectations, the manufacturing ISM rose to its highest since 2022, and the U.S. economic surprises index on Monday hit its highest in nearly four weeks. Some of these surveys only cover the early part of March so the positive surprises may not last. But the early signs are encouraging.

Asia FX Intervention Risks

Some countries in Asia, like India and the Philippines, have already intervened in the FX market since the Iran war started to support their currencies. With the global price of oil elevated, and the premium in Asia for physical loads and refined products at record levels, they are unlikely to be the last.

Countries boasting current account deficits, like Indonesia, are particularly vulnerable, but surplus countries also face the threat of an energy/FX/inflation doom loop emerging. Indeed, in worst case scenarios, some countries may need to consider selling foreign bonds or gold to pay for fuel.

What Could Move Markets Tomorrow?

• Developments in the Middle East
• Energy market moves
• Australia, euro zone, UK services PMIs (March, final)
• Japan household spending (February)
• Canada PMI (March)
• U.S. durable goods (February)
• U.S. Treasury sells $58 billion of three-year notes at auction
• U.S. Federal Reserve officials scheduled to speak include Chicago Fed President Austan Goolsbee, Vice Chair Philip Jefferson, San Francisco Fed President Mary Daly

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Disclaimer

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(Reporting by Jamie McGeever; Editing by Nia Williams)