MARKET WRAPS
Watch For:
UK retail sales; trading update from Sodexo
Opening Call:
Shares could open on shaky ground in Europe on Friday on reports of Israel strikes on Iran. In Asia, stock benchmarks dropped; Treasury yields were flat; the dollar ticked higher; while oil and gold advanced.
Equities:
European shares are headed for a rough start on Friday, following reports that Israel had launched retaliatory strikes against Iran.
Asian stock benchmarks fell, while oil and gold jumped amid the Middle East tensions.
Iran activated air-defense systems and canceled flights, state media reported, amid reports of explosions at a time when the country and world are bracing for a possible Israeli strike.
The stock market had already been under pressure from both heightened geopolitical risks and signs that interest rates would have to remain higher for longer.
Forex:
The dollar strengthened in Asia, as prospects of a widening Middle East conflict spurred safe-haven demand for the greenback.
Markets are focused on the Middle East and could be swung by the current episode of risk aversion, Maybank said.
Bonds:
Treasury yields were flat after previous gains, as investors questioned how far in the future an interest rate cut may be.
"Traders continue to be troubled by the decidedly more hawkish tone emerging from members of the Federal Reserve in recent days as we march toward their next policy meeting on May 1st," StoneX said.
Energy:
Oil jumped in Asia on the reports of attacks in the Middle East.
"If these reports turn out to be true, fears over further escalation will only grow," ING said.
Concerns may also grow that markets are possibly shifting closer toward a situation where oil-supply risks lead to actual supply disruptions, it added.
Metals:
Gold could retest its April record high, IG said.
Geopolitical risks in the Middle East appear to have heightened, with further reported escalations between Israel and Iran suggesting that the "tit-for-tat retaliation between both sides will drag for longer," it said.
A counterattack from Iran is more likely than not, and this uncertainty has resulted in a broad risk-off tone with safe-haven demand for gold, driving prices higher and toward April's record high, it added.
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Copper rose amid positive sentiment.
Copper has extended gains to a two-year high, reflecting the improving health of the global economy, said Saxo Markets. The focus is also back on copper, thanks to the high demand for the red metal in green transition, it added.
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Iron ore prices were lower.
Sentiment was weighed by pressure from potential U.S. tariffs on Chinese steel, ANZ Research said.
However, the proposed tariffs shouldn't have long-term impact on the steel market as the U.S. accounts for a small part of Chinese exports, ANZ added.
TODAY'S TOP HEADLINES
Iran Activates Air Defenses Amid Reports of Explosions as World Braces for Israel Strike
Iran activated air-defense systems and canceled flights, state media reported, amid reports of explosions at a time when the country and world are bracing for a possible Israeli strike.
Israel has signaled it would retaliate against Iran's massive drone and missile attack on its territory, a move that would threaten to push the countries deeper into an escalatory spiral that could lead to a regional war.
S&P Cuts Israel's Credit Ratings on Geopolitical Concerns
S&P Global Ratings said it lowered its long-term foreign and local currency sovereign credit ratings on Israel to A-plus from AA-minus, citing geopolitical risks.
S&P also said it has a negative outlook on the country, reflecting risks that military conflict could escalate and "affect Israel's economic, fiscal, and balance-of-payments parameters more significantly than we currently expect."
Google's Ad-Privacy Changes Fall Short, U.K. Regulator Says in Internal Documents
Google's yearslong effort to make online advertising less invasive has hit another snag.
The U.K. privacy regulator says Google's proposed replacements for cookies need to do more to protect consumer privacy, according to internal documents reviewed by The Wall Street Journal.
Schneider Electric in Talks to Take Control of Bentley Systems
Schneider Electric is in talks to take control of the engineering-software company Bentley Systems in a deal that could be worth more than $15 billion.
The companies are holding early-stage talks for a deal in which Schneider would merge its software business with Bentley, according to people familiar with the matter. Bentley would remain a public company, albeit much larger.
Iran Targeted With Sanctions, Export Controls After Attack on Israel
The U.S. has hit Iran with a new wave of sanctions and export controls in response to the country's recent air attack on Israel, a move aimed at grounding Iran's drone program and pinching its national revenue.
The U.S. Treasury and Commerce Departments on Thursday announced a package of financial sanctions that targets a number of companies and individuals, both inside and outside Iran, alongside controls on low-level technology that could be employed in drone manufacture.
China Orders Apple to Remove WhatsApp From App Store
SINGAPORE-Apple removed WhatsApp and Threads from its app store in China on Friday, saying it was ordered to do so by the government, the latest example of censorship demands as China tightens internet controls.
The iPhone maker said the company was told by China's top internet regulator to remove the apps because of national security concerns.
Write to singaporeeditors@dowjones.com
Expected Major Events for Friday
06:00/GER: Mar PPI
06:00/UK: Mar UK monthly retail sales figures
07:00/SPN: Feb Trade Balance
08:00/ICE: Mar Harmonized CPI
15:59/GRE: Feb Balance of Payments
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(END) Dow Jones Newswires
04-19-24 0017ET
