• Market Round Up: Global equity markets sold off yesterday as tensions between the US and Iran increased again, with President Trump telling Iran to “Get serious, before it's too late”. The S&P500 fell 1.7%, the Nasdaq dropped 2.4% whilst the EuroStoxx600 declined 1.1%. Eight of eleven sectors in the US were lower yesterday with Information Technology (-2.7%) leading the way. Nvidia contributed most to the index decline, falling 4.2%. At present the S&P500 is on route for its 5th straight losing week, for the first time in over 4 years. In Europe the Stoxx 600 basic resource index dropped 3.6%, as mining stocks strongly underperformed. ASML was the biggest drag on the overall index, falling 3.8%. Macro announcements were weighted to the downside with German Gfk Consumer Confidence for April hitting -28 (Est. -27.3). German officials also added that 2026 growth is at risk of halving if energy costs remain elevated from the Iran conflict. GDP growth of 0.5% is deemed a worst-case scenario.   Meanwhile in the US the OECD warned that US headline inflation could hit 4.2% in 2026 (Current 2.4%) which would be a significant blow for Republicans heading into the November Mid-terms.
• Day Ahead and Market Drivers: Asian equities have started positive this morning after it was announced last night that Trump would suspend attacks on energy infrastructure in Iran for another 10 days. Japan is up 0.2%, Hong Kong is up 0.7% whilst China is up 0.6%. On the macro side, any positive or negative updates relating to the Iran conflict will continue to drive global markets. However, in the US we also have the release of the University of Michigan Sentiment index for March (Est. 54). In Europe we will have the release of both Irish retail sales. UK retail sales for February were just published, slightly stronger than expected at 2.5% (Est. 2.1%). Carnival Plc, the cruise ship operator will release its 1Q26 results before the market opens in the US today. The stock is down 15.8% YTD.
• Bonds: US Treasury yields rose sharply yesterday with the 10-year climbing 10bps to 4.41% as concerns around stagflation and the Iran war push investors to safe-haven assets. The German 10-year climbed 12bps to 3.07% whilst the 10-year Gilt jumped 14bps to 4.97%.  From an auction perspective the UK will issue £6.5bn worth of short-dated bills, while Italy will issue €8.5bn worth of medium-dated bonds.   Central bank speakers today include the Fed’s Barkin, Paulson and Daly.
• Commodities: Brent oil prices rose by 5.4% yesterday to $108 p/b. The price had dropped to $105 p/b after Trump’s comments on energy infrastructure but has since stabilised around $108 again. The gold sell-off continues with the precious metal falling 3.0% yesterday to $4,376. Gold has pared back some of those losses this morning and is up 1.8%.

Opportunities this week:

• Last week was a busy week for PayPal with multiple announcements regarding its stablecoin (PYUSD), Venmo, and new strategic partnerships, which we believe continue to position PayPal to capture growth in the ever-evolving FinTech space, hence we reiterate our Overweight rating and a revised PT $97 from $96.   
• Following a multi-year period of de-rating and under-performance we are upgrading our rating on Diageo to Overweight and revising our price target from 2260p to 2370p, which provides c. 29% potential upside before the c.4% dividend yield. 
• After a period of share price weakness for Rio Tinto related to weaker iron ore prices, we are reiterating our Overweight rating with a PT of 5590p (c. 30% upside plus 7% dividend yield).