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Investors weigh US-Iran deal progress

While Wall Street remained closed on Friday due to a holiday, stock markets in the Asian-Pacific region kicked off the new week on a positive note with Japanese and South Korean equities leading regional gains. Latest geopolitical developments signalled easing tensions in the Iran conflict, as the US and Iran agreed on a roadmap aimed at reaching a final deal within 60 days. Meanwhile, the People’s Bank of China left its Loan Prime Rates unchanged. Besides geopolitics, this week’s focus will be on Inflation, corporate and consumer sentiment.

  • Date
  • Author Alessandro Fezzi, Content & Publications
  • Reading time 5 minutes

Middle East financial markets
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Most Asian equity markets rose on Monday as easing concern over US-Iran tensions improved risk appetite, while expectations that US interest rates could stay elevated limited broader enthusiasm. Japan’s Nikkei 225 climbed temporarily more than 2%, trading about 1.7% higher to the end of the session. South Korea’s KOSPI is up about 0.5%, supported by strong demand for technology shares and continued optimism around artificial intelligence-related chipmakers, with SK Hynix jumping nearly 6%. Chinese markets also advanced, with the CSI 300 up and the Shanghai Composite 0.8% higher, while Hong Kong’s Hang Seng fell 0.8% and Australia’s ASX 200 was flat. Investors were also looking ahead to inflation and trade data from across the region, as well as US core PCE figures later this week, for further signals on the interest-rate outlook.

US stock and bond markets were closed on Friday in observance of the Juneteenth federal holiday.

European stock markets ease after strong week

Eurozone equities ended slightly lower on Friday, with the Euro Stoxx 50 falling 0.5% to 6293.13 points after touching another record high earlier in the session, though the index still gained 1.7% over the week. Trading was subdued as US markets were closed for a holiday, while investors balanced optimism over a lasting US-Iran peace deal and the reopening of the Strait of Hormuz against doubts about whether the agreement would endure. Stoxx 600 oil and gas sector outperformed with a 1.3% gain as basic resources fell 2.1%.

The Swiss SMI rose slightly to 13,774.02 points on Friday, supported by the shares of the pharmaceutical heavyweight Novartis and Roche. The shares of the third SMI heavyweight Nestlé turned slightly negative over the day. On the other hand, the shares of pharmaceutical supplier Lonza (+1.4%) and ophthalmic specialist Alcon (+1.8%) closed with price gains. Shares of flavor and fragrance specialist Givaudan (+1.9%) benefited from positive analyst comments.

Inflation, corporate and consumer sentiment in this week’s focus

This week, markets will track whether inflation pressures are easing and how business activity is holding up across the major economies after a string of central bank decisions. China sets the tone on Monday with its Loan Prime Rate decision, while Canada releases Consumer Price Index data and European Central Bank President Christine Lagarde speaks the same day. Purchasing Managers’ Indices from Japan, France, Germany, the euro area, the UK and the US on Tuesday will offer an early read on global growth momentum, while Germany’s ifo Business Climate Index and Switzerland’s ZEW survey on Wednesday provide further signals on European sentiment. On Thursday, US first-quarter gross domestic product and May Personal Consumption Expenditures data - the Federal Reserve’s preferred gauge of inflation - headline the week, alongside durable goods orders and jobless claims. Japan’s Tokyo Consumer Price Index on Friday will add to the inflation picture, while the University of Michigan Consumer Sentiment Index will round off the week with an update on US household confidence and inflation expectations.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: People’s Bank of China interest rate decision (03:15), Canadian Consumer Price Index (14:30), European Central Bank President Christine Lagarde speaks (14:30), euro-area consumer confidence (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.