- Market Round Up: Global equity markets traded mixed yesterday as concerns around additional Gulf nations such as Qatar and the UAE entering the Iran conflict grew. However, by the end of the day President Trump indicated that a potential 15-point plan could be drawn up, with a guarantee needed that Iran will never obtain or develop a nuclear weapon. The S&P500 fell 0.4%, the Nasdaq declined 0.8% whilst European indices traded in the green, up 0.4%. Puig Brands, a Spanish beauty and cosmetics business saw its shares rise 17% as it was announced that Estee Lauder is set to acquire the business. US software stocks continued to trade weaker, with the sector down 3.4% on the day, as fears around AI disruption continues to grow. Global Manufacturing and Services PMI data was mixed yesterday, France beat on manufacturing (50.2) but missed on Service (48.3). US Manufacturing PMI for March was solid, hitting 52.4 (Est. 51.5), as was the wider Eurozone at 51.4 (Est. 49.6).
- Day Ahead and Market Drivers:
- Asian markets have started on the front foot this morning, as have European and US Futures as renewed confidence on a potential de-escalation in Iran is growing. Japan is up 2.6%, Hong Kong is 0.4% whilst China is up 1.3%. On the macro side today, Germany will be in focus with the release of the IFO Business Climate survey for March, which is projected to be 86.3, down from 88.6 in February. In the UK we have just had the release of UK CPI for February, with the annualised rate hitting 3.0%, in line with estimates (3.0%). There are no major corporate announcements today as earnings season has all but finished.
- Stocks in focus: Diageo – (Overweight PT £21.90 +60% Upside) – Sale of non-core brand Bengaluru Royal ChallengersCRH – (Overweight PT 142 33% upside) – Investor relations meeting summary.
- Bonds: There was huge volatility in bond markets yesterday as yields rose to new highs in the morning, before an afternoon fade after Trump’s announcement. Overall, the day ended with yields down 4bps in both the US and Germany. In private credit markets, Apollo became the next major player to cap withdrawals from one of its funds. There are auctions in longer dated bonds from Netherlands (2056s), UK (2035s) and Germany (2031s) today. Finally, given the implied expectations for nearly three rate rises in 2026 from the ECB, speakers Kocher, Sleijpen, Cipollone, and Lane will be worth a close listen to today.
- Commodities: This morning energy markets are up again with Brent crude up 2.8%, WTI up 3.7%, and European gas prices are up 1.2%. This follows a -4.3% move for European gas, and -11% for Brent crude yesterday. There are fears that despite Trump’s deescalation talk, other Gulf states may become more actively involved in the conflict. Gold is little changed this morning.
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