Whilst the risks of one war subsides, another picks up! Over the weekend the risks of all-out war between Israel and Iran seem to have dissipated. Israel on Friday delivered its promised response to the Iranian strike of the weekend before by hitting targets in Syria and the Iranian city of Isfahan, while the Israeli Minister of the Interior Ben Gvir tweeted “weak!” in Hebrew at the time of the attacks. However, in the US, the House of Representatives came to agreement over the weekend on a $61bn aid bill for Ukraine, Israel and Taiwan. The bill will be debated in the Senate this week but will upset the opposition.
Marketwise, Gold is back below $2,400/oz while Brent crude is well under the $90/bbl psychological level. Cable opens with a 1.23 handle, USDJPY pushes the 155 resistance. The NASDAQ fell by 2%, the S&P500 was down by 0.88% and the star of 2024 NVDA fell by 10% following rumours that Stanley Druckenmiller has sold down his position.
Data wise, the Rightmove house price data for the UK showed a deceleration in price growth in April to a 1.1% m-o-m. As expected, the PBOC left the 1 and 5-year loan prime rates unchanged at 3.95% and 3.45% respectively. Later today we have Spanish home sales, French retail sales, industrial product prices for Canada and the Chicago Fed’s national activity index. On the speaking front we hear from the ECB’s Villeroy and Lagarde and the BOE’s Benjamin. As for highlights over the rest of the week, Tuesday is April PMI day - figures for Australia, Japan, France, Germany, the UK and the United States are all released and Friday is the BOJ meeting. No change is expected - 0.10% is the current policy rate, but any hints of intervention levels or 'lines in the sand' will be eagerly awaited.
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