US-Iran Negotiations Remain Unresolved, Volatility Intensifies Across Global Market Segments
With the progress of US-Iran negotiations remaining unresolved, coupled with geopolitical and central bank policy uncertainties, the global financial market has shown a differentiated and volatile trend across multiple segments: semiconductor stocks declined collectively in pre-market US trading, international oil prices rose for seven consecutive days, the yen strengthened slightly, and gold fell more than 1% intraday, with market risk aversion and inflation expectations intertwined.
The continued blockade of the Strait of Hormuz has led to a seventh consecutive trading day of gains in international oil prices, which has pushed up inflation expectations and further exerted obvious pressure on the global bond market and gold market. This week, major global central banks including the Federal Reserve and the European Central Bank will successively hold monetary policy meetings, while tech giants will release their financial reports intensively. With the superposition of multiple key events, the global market is facing a severe test.
According to comprehensive public reports, Iranian Foreign Minister Hossein Amir-Abdollahian, who is visiting Russia, stated on Monday, April 27 (local time) that the US has officially requested negotiations, and Iran is currently carefully considering this option. On Tuesday, April 28, international oil prices showed a trend of rising and then pulling back. Brent crude oil rose 2.9% intraday to $111.32 per barrel, then pulled back to around $103.73 per barrel, with an intraday gain of about 2%; WTI crude oil was quoted at $98.52 per barrel, with a similar gain. Gold prices came under pressure due to the strengthening of the US dollar, with spot gold falling 1.12% intraday to $4,630 per ounce; the US 10-year Treasury yield rose 1 basis point to 4.35%.
The rise in international oil prices, combined with multiple risk events such as geopolitics and central bank policies, has significantly suppressed global investor sentiment. In pre-market US stock trading, the semiconductor sector performed weakly, with most individual stocks falling, including ARM down more than 6%, AMD down nearly 3%, Qualcomm and ASML down nearly 2%. European stock markets also weakened synchronously after the opening, with the Euro Stoxx 50 Index, German DAX Index, UK FTSE 100 Index, and French CAC 40 Index all opening down 0.1%, showing an overall sluggish performance.
At the same time, the Bank of Japan announced its latest interest rate decision, deciding to keep the existing policy rate unchanged with a 6-3 vote. After the decision was announced, the yen strengthened slightly by 0.2%, with the exchange rate touching about 159 yen per US dollar. This divisive voting result has significantly raised market expectations for a Bank of Japan interest rate hike in June, with the implied probability of related contracts rising to more than 70%. Currently, investors are waiting for Bank of Japan Governor Kazuo Ueda's press conference to be held at 3:30 pm Tokyo time to seek more clues about the future policy path.
In pre-market US trading, semiconductor stocks continued their weak performance, with most individual stocks falling, including ARM down more than 6%, AMD down nearly 3%, Qualcomm and ASML down nearly 2%.
Major European stock indexes generally came under pressure at the opening. The Euro Stoxx 50 Index opened down 0.1%, the German DAX Index down 0.1%, the UK FTSE 100 Index down 0.1%, and the French CAC 40 Index down 0.1%.
Asian-Pacific stock markets showed a differentiated trend. The Nikkei 225 Index closed down 1% at 59,917.46 points; the Tokyo Stock Price Index closed up 1% at 3,772.19 points; the South Korean Seoul Composite Index closed up 0.4% at 6,641.02 points.
The US 10-year Treasury yield rose 1 basis point to 4.35%.
The yen strengthened slightly by 0.2% to about 159 yen per US dollar.
Brent crude oil rose 2.9% intraday to $111.32 per barrel, then pulled back to around $103.73 per barrel, with an intraday gain of about 2%; WTI crude oil was quoted at $98.52 per barrel, with a similar gain.
Gold came under pressure due to the strengthening of the US dollar, with spot gold falling 1.12% to $4,630 per ounce.
Outlook for Iran's Peace Proposal Unclear, Blockade Situation Continues to Affect Oil Market
According to comprehensive reports from Axios, Associated Press and other media, the core content of Iran's peace proposal is: if the US lifts the maritime blockade on Iran and ends the war, Iran will reopen the Strait of Hormuz, and nuclear negotiations will be postponed to a later date. White House Spokesperson Karoline Leavitt confirmed on Monday that Trump has discussed the proposal with senior aides. However, Trump has previously made it clear that he will not lift the blockade on Iran until the relevant agreement with Iran is "100% completed", and there is still great uncertainty about whether he will accept the proposal.
The US-Israel war against Iran, which broke out in late February and has lasted for about eight weeks, has had a continuous impact on the global commodity market. Although the war initially dragged down global stock markets, global stock markets have since stabilized and rebounded, basically recovering their previous losses, and some markets have even hit record highs, while international oil prices have remained hovering at high levels, fluctuating significantly under the influence of geopolitical situations.
In pre-market US trading, semiconductor stocks mostly fell, with ARM down more than 6%, AMD down nearly 3%, Qualcomm and ASML down nearly 2%; Brent crude oil rose 2.9% intraday to $111.32 per barrel, then pulled back to around $103.73 per barrel, with an intraday gain of about 2%; WTI crude oil was quoted at $98.52 per barrel, with a similar gain.
Super Central Bank Week: Inflation Pressure Tests Forward Guidance of Major Banks
This week, the global central bank ushered in a "super interest rate decision week". The Federal Reserve, the European Central Bank, the Bank of England and the Bank of Canada will successively announce interest rate decisions. The economies covered by these central banks account for about half of the global economic aggregate. The market generally expects that major central banks will keep their existing interest rates unchanged, but investors are highly concerned about how central bank officials assess the potential threat of continuously rising international oil prices to the inflation outlook and the direction of subsequent policy adjustments.
Ian Lyngen of BMO Capital Markets said that the tone of this central bank press conference will emphasize the prudence of the current "wait-and-see" stance, but "investors are approaching a point where they may expect the Federal Reserve to express a clearer stance on the impact of the energy shock, even if this is unlikely to be fully presented at the press conference".
Notably, according to CNBC reports, the Federal Reserve's policy decision this Wednesday may be Jerome Powell's last interest rate meeting in office, and Kevin Warsh is expected to officially take over as Federal Reserve Chairman in May. The US Department of Justice decided last Friday to drop the criminal investigation against Powell, which directly prompted Senator Thom Tillis to withdraw his opposition to Warsh's nomination, clearing the way for his smooth succession. The European Central Bank and the Bank of England are expected to keep interest rates unchanged this Thursday, but economists generally expect that both central banks will retain policy space for possible interest rate hikes within the year.
Tech Giants' Earnings Reports Released Intensively, Can AI Trading Sustain the Uptrend?
An important support for this round of global market recovery comes from the rekindling of the AI-related trading boom. This week, tech giants entered an intensive earnings reporting period. Alphabet, Microsoft, Amazon and Meta will release their financial reports collectively on Wednesday, followed by Apple on Thursday; at the same time, Asian companies also entered the busiest week of this earnings season, and their performance will provide the market with early clues about the impact of the geopolitical war on corporate operations.
Lori Calvasina, head of US equity strategy at RBC, believes that the Middle East geopolitical conflict will not have a substantial impact on the profits of the US AI and technology sectors, and positions US stocks as the preferred safe-haven asset in the global market.
Gary Tan, fund manager at Allspring Global Investments, pointed out that Asian tech stocks have recently recorded gains despite continued supply chain disruptions, a phenomenon that shows investors are increasingly "looking forward" to recent geopolitical risks. "However, to achieve sustained revaluation relative to US stocks, the key still depends on the capital expenditure signals released by the largest cloud vendors in this week's earnings reports."
Walter Todd, president and chief investment officer of Greenwood Capital Associates, said that in the process of the market rebounding to a record high, it seems to have set aside the persistent geopolitical risks. This round of gains is mainly supported by positive earnings revisions and optimistic market expectations. He also warned that "once the earnings reports of the largest companies show cracks in the coming weeks, it will pose a major risk to market momentum".
Bank of Japan Maintains Interest Rate with Divisive Vote, Expectations for June Rate Hike Rise
The Bank of Japan decided to keep the existing policy rate unchanged with a divisive 6-3 vote. This voting result has significantly raised market expectations for a Bank of Japan interest rate hike in June, with the implied probability of related contracts rising to more than 70%. Japanese government bond prices fluctuated slightly after the decision was announced. Affected by this, the yen strengthened slightly, and investors are waiting for Ueda's press conference to obtain more clues about the future monetary policy path.
In terms of Asian-Pacific stock markets, South Korean stocks performed brightly, rising 0.6% on the day, with their total market value surpassing that of the UK, successfully ranking as the world's eighth-largest stock market.
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