Macro update
Asia-Pacific index Asian equities rally on growing ceasefire optimism: Japan’s Nikkei advanced 3.6%, South Korea’s KOSPI surged 7.8%, and MSCI’s Asia-Pacific index excluding Japan gained 3.7% as hopes for a ceasefire agreement in the Gulf sparked a broad-based improvement in risk sentiment.
Wall Street posts strongest gains since April ceasefire: The Dow climbed 1.9%, the S&P 500 rose 1.8% and the Nasdaq gained 2.5% on Thursday, marking their largest daily advances since the April 8 ceasefire after President Trump called off planned military strikes against Iran.
Oil falls to a two-month low on peace prospects: Brent crude dropped around 2% to $88 a barrel after President Trump suggested an agreement to reopen the Straits of Hormuz could be reached this weekend, although Iran stated it had yet to approve any formal deal.
Treasuries hold firm as expectations of Fed tightening ease: Two-year Treasury yields remained around 4.07% and 10-year yields held at 4.47%, while the implied probability of an October Federal Reserve rate hike fell to 36% from 51% as easing geopolitical tensions reduced inflation concerns.
Dollar steadies while yen remains under scrutiny: The dollar index stabilised at 99.74 following the previous session’s decline, with the dollar edging up 0.2% against the yen to 160.24 as traders continued to monitor the risk of official intervention around the ¥160 level.
OPEC revises oil demand forecasts: The producer group lowered its 2026 global oil demand growth forecast to 970,000 barrels per day from 1.17 million, while increasing its 2027 projection by 190,000 barrels per day to 1.73 million, reflecting a more optimistic longer-term outlook.
