Equity momentum continues to come out of Asia. Alibaba surged almost 14% after positive earnings and capital expenditure plans surprised markets, dragging much of the region’s technology stocks with it. After the DeepSeek momentum, positive surprises like this are grabbing investors' attention, with some speculating that China could even lead in the AI race.
Elsewhere, U.S. indices dropped slightly, with no relief from geopolitical tensions and a disappointing forecast from Walmart. XAU continues to trade near all-time highs set yesterday.
In FX, after yesterday’s rally in JPY, CPI prints overnight justified recent sentiment that rate hikes could come sooner. However, Ueda attempted to calm markets by reiterating the long-standing commitment to supporting stable conditions.
Heading into the weekend, Germany's election on Sunday brings widespread pressure to increase borrowing, given the country’s relatively low debt-to-GDP ratio. Trump is also weighing in, pushing for this extra borrowing to be spent on defence to reduce the burden on the U.S.
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