Stock Futures Slide As Doubts Over Ceasefire Send Oil Higher

Stocks resumed their drop and oil erased about a third of its Wednesday drop as traders watched the fragile US-Iran ceasefire shatter by the hour, with both sides accusing the other of breaches while the Strait of Hormuz is still effectively closed and Israel intensified strikes on Lebanon. As of 8:00am ET, S&P futures fell 0.4% after Bloomberg strategists said a best-case scenario has already been priced in; Nasdaq futures dropped 0.3% with Mag7 stocks mostly lower. Europe’s Stoxx 600 index fell 0.7%. Emerging-market stocks slid almost 1%. The dollar ticked higher even as 10Y US YST yields dropped about 1bp; equivalent UK yields rose six basis points after tumbling almost 20 basis points on Wednesday. Brent crude jumped back to $98 a barrel on signs the Strait of Hormuz is still effectively closed. US economic data calendar includes February personal income/spending (with PCE price index), weekly jobless claims and third estimate of 4Q GDP (8:30am) and February wholesale trade sales and inventories (10am). Fed speaker slate is blank until April 14.

In premarket trading, Mag 7 stocks are mostly lower (Alphabet -0.7%, Amazon +0.8%, Apple -0.4%, Nvidia -0.7%, Meta Platforms +1%, Microsoft -0.1%, -0.3%)

Applied Digital (APLD) falls 1% after the data center operator’s third-quarter gross margins missed the average analyst estimate.
CoreWeave (CRWV) rises 6% after the cloud-computing provider reported an expanded long-term agreement with Meta to provide AI cloud capacity through December 2032 for ~$21 billion.
Marvell Technology (MRVL) rises 2% after Barclays upgraded the stock to overweight, citing demand for optical products.
Instacart (CART) climbs 2% as Raymond James upgrades to outperform, calling the grocery segment an under-penetrated e-commerce market.
Simply Good Foods (SMPL) falls 16% after the packaged-food firm forecast year net sales will be down as much as 10%.
STAAR Surgical (STAA) rises 23% after the health-care supplies firm said it expects net sales for the first quarter to exceed $90 million, up from $42.6 million in the year ago period. The estimate surpassed Wall Street’s expectations.
Texas Instruments (TXN) gains 1.6% after Stifel upgraded the stock to buy, citing “multiple tailwinds” that should support the semiconductor firm’s outlook.
Whitestone REIT (WSR) shares rise 11% after the retail-focused real estate investment trust company entered into a definitive merger agreement with Ares Real Estate funds to be acquired for $19 per share in an all-cash transaction valued at about $1.7 billion.

In AI, Anthropic employees sold some equity to investors, wrapping up a secondary share sale that started earlier this year. Meta shares are up in premarket trading, with analysts generally positive on the AI model it showed on Wednesday. PIMCO is said to be looking to sell a portion of the $14 billion of debt financing it’s providing for a massive Oracle data center in Michigan. In other corporate news, the WSJ reported that Disney is preparing to make sizable layoffs in one of the first significant moves under its new CEO. Seven & i Holdings will delay a public listing of its US convenience-store business planned for later this year.

Markets have given up some of the big moves seen Wednesday when optimism around the deal for a two-week pause in fighting spurred a relief rally. Continued fighting in the Middle East, punctuated by Israeli strikes in Lebanon, threatened to derail the fragile ceasefire deal. Iran and the US-Israeli side appeared to disagree over whether the ceasefire covers Lebanon. Yet despite the escalating rhetoric, the ceasefire was largely holding on Thursday, with a decline in attacks across Arab states in the Persian Gulf.

“There’s a fair amount of skepticism in the market about the ceasefire and the upcoming negotiations,” said Raphael Thuin, head of capital markets strategies at Tikehau Capital. “The big question is what state the global economy will be in after the crisis.”

Overnight, Trump pledged to keep US troops in the Persian Gulf ahead of talks with Iran; the first round of direct negotiations is scheduled for Saturday morning in Islamabad. Meanwhile, Goldman predicted that Brent is set to average more than $100 a barrel right through 2026 if the strait remains closed for another month.

Much of Wednesday’s move was driven by short-covering and a return to normal positioning: According to Goldman’s trading desk, hedge funds rushed to close out bets against US stocks at a pace not seen since March 2020. The ceasefire, along with upcoming earnings driving up the potential for idiosyncratic moves across equities, may mean “downward pressure on implied correlations,” according to Citi option strategists.

Even if weekend talks lead to a more permanent peace, the effects of the war will rumble on. Earnings expectations will need to be tempered because of the inflationary fallout from the war, according to BlackRock’s Helen Jewell. And in central banks, a former executive director at the Bank of Japan said the BOJ is likely to increase its benchmark rate this month to avoid falling behind on controlling inflation. Fed policymakers will get the latest reading of their preferred inflation indicator, core PCE, later, ahead of CPI data on Friday. The latter, covering March, is likely to be more interesting as it will begin to reflect the Middle East conflict.

In politics, the Justice Department’s top antitrust litigator and three senior trial attorneys are leaving the agency, according to people familiar. The US is said to consider lifting sanctions on Venezuela’s central bank to facilitate the flow of billions of dollars into the country’s battered economy.

Turning to the start of earnings season next week, expectations will need to be tempered due to the inflationary fallout from the war, BlackRock Inc.’s Helen Jewell said. “If you look at earnings forecasts at the moment for the year, they’re still well into double digits — 15, 16, 17, 18%,” said Jewell, who is international chief investment officer for fundamental equities at the world’s largest asset manager. “There’s a lot of headroom for the earnings to come down a little bit.”

On Thursday, the Fed's preferred gauge of inflation will offer a snapshot of pre-war price pressures. Economists see the so-called core personal consumption expenditures — PCE — price index, which excludes food and energy, having risen by 0.4% for a third month in February, suggesting progress toward tamer inflation was stalling even before the conflict.

Europe's stocks followed their Asian counterparts lower, with the Stoxx 600 down 0.7% after its best day since March 2022 on Wednesday. US equity futures also drop. Oil stocks advanced along with Brent crude. Many of yesterday’s laggards in the oil sector are today’s biggest gainers, including Var Energi, Equinor, BP and TotalEnergies. Here are the biggest movers Thursday:

ITM Power shares climb as much as 17%, the most in 10 months, after the UK government pledged to invest around £87 million in the clean energy company to drive a build out of its hydrogen technology manufacturing facility
Rexel shares climb as much as 4.1% after analysts at Jefferies raise the French electrical supplies firm to buy from hold, saying it is well positioned to outpace its guidance thanks to higher prices and growth drivers
Technip Energies shares rise as much as 4.1% to the highest level since September after the engineering firm was awarded a contract to improve the Long Son Petrochemicals complex in Vietnam
Vallourec rises as much as 5.2% after announcing a five-year supply agreement with Fervo Energy worth up to $800 million, which CIC Markets says “demonstrates the effectiveness” of the firm’s New Energies segment strategy
AG Barr rises as much as 4.7% after Bank of America initiates coverage of the UK soft drinks manufacturer with a buy rating and a street-high 850p price target. BofA cites growth potential for IRN-BRU
DCC shares rise as much as 4.1% after analysts at BNP Paribas raise their rating to outperform from neutral on the energy seller’s current valuation and the positive impact of energy prices
Melia Hotels shares rise as much as 3.9%, to the highest level since Sept. 2018, as Kepler Cheuvreux raises its recommendation on the Spanish hotel operator to hold from reduce
Abivax shares rise as much as 3.8% after Oddo BHF lifted its price target on the French biotech company, saying Crohn’s disease could represent a bigger commercial opportunity than ulcerative colitis
Alstom falls 7.2%, the most in ten months, after the French trainmaker flags currency headwinds in an earnings preview. JPMorgan (overweight) lowers estimates on FX headwinds
Man Group shares trade as much as 7.7% below their last closing price, only partly due to trading without rights to the next dividend. Deutsche Bank analysts cut their earnings estimates and price target ahead of 1Q results
Netcompany shares fall as much as 6.5%, the most in two months, after ABG Sundal Collier cut its recommendation on the Danish IT consultancy to hold from buy, seeing a “less compelling” risk/reward after a strong run for the shares
Grieg Seafood falls as much as 7.9%, the most since last May, after the Norwegian seafood and salmon company’s preliminary first-quarter earnings disappointed, leading DNB Carnegie to cut 2026 EPS estimates by 12%

Earlier in the session, Asian stocks retreated as oil prices rose again and sporadic fighting in the Middle East cast doubts over the implementation of the two-week US-Iran ceasefire deal. The MSCI Asia Pacific Index slid 1%, with South Korean chipmakers Samsung Electronics and SK Hynix the biggest drags. Most national benchmarks in the region traded lower, with the Kospi being the biggest loser followed by India’s Nifty 50. Asia’s stock benchmark jumped 5% in the previous session, the most in about a year, as global risk assets rallied on optimism over the ceasefire deal. It is up more than 8% so far in 2026.

“Headline risk remains elevated,” according to Kyle Rodda, analyst at Capital.com. “Markets aren’t necessarily out of the woods yet. There are several variables that could upend market sentiment.”

In rates, treasury yields are slightly lower, down 1bp to 4.29% and slightly richer across the curve after plying small ranges during Asia session and London morning; equivalent UK yields rose six basis points after tumbling almost 20 basis points on Wednesday. US yields are as much as 1.5bp lower led by intermediate sectors, steepening 5s30s curve by around 1bp. 10-year is down about 1bp near 4.28% with European counterparts 3bp-6bp higher on the day. European yields are broadly higher with oil prices as Strait of Hormuz traffic remains blocked: UK and German 10-year yields rise 7 bps and 4 bps respectively. US session includes PCE price gauges for February, several other US economic indicators and 30-year bond auction. Treasury’s $22 billion 30-year bond reopening has WI yield near 4.88%, about 1bp higher than result of last month’s auction, which stopped through by 0.7bp; Wednesday’s 10-year reopening tailed by 0.2bp after rallying into the bid deadline.

In FX, the Bloomberg Dollar Spot Index inches higher. The yen is the weakest of the G-10 currencies, falling 0.3% against the greenback. Gold edges up while Bitcoin is flat.

In commodities, WTI crude oil futures are up more than 5% near session highs, erasing about a third of Wednesday’s 16.4% drop; Brent crude futures rise 4% to above $98 after a more than 13% plunge to under $95 a barrel as the Strait of Hormuz remains largely blocked. Two fully laden Chinese oil tankers in the Persian Gulf were approaching the Strait, potentially putting them on track to become the first such vessels to cross since the ceasefire was announced. European natural gas futures climb 2%.

US economic data calendar includes February personal income/spending (with PCE price index), weekly jobless claims and third estimate of 4Q GDP (8:30am) and February wholesale trade sales and inventories (10am). Fed speaker slate is blank until April 14.

Market Snapshot

S&P 500 mini -0.3%, Nasdaq 100 mini -0.3%, Russell 2000 mini -0.6%
Stoxx Europe 600 -0.6%, DAX -1.2%, CAC 40 -0.7%
10-year Treasury yield little changed at 4.29%
VIX +0.4 points at 21.39
Bloomberg Dollar Index little changed at 1202.1, euro +0.1% at $1.1678
WTI crude +3.1% at $97.38/barrel

Top Overnight News

JD Vance will head the U.S. negotiating team for the peace talks with Iran on Saturday, White House press secretary Karoline Leavitt said on Wednesday. Axios
Even as the U.S. and Iran seek to cement a ceasefire, Israel is seizing more territory from its neighbors in preparation for a long, drawn-out conflict across the Middle East. Israel's creation of "buffer zones" in Gaza, Syria and now Lebanon reflects a strategic shift after the attacks of October 7, 2023, one that puts the country in a semi-permanent state of war. RTRS
Vance said Wednesday Israel has proposed to restrain itself when it comes to strikes in Lebanon as long as the negotiations between the U.S. and Iran are taking place. Axios
The White House is considering a plan to punish some members of the NATO alliance that President Trump thinks were unhelpful to the U.S. and Israel during the Iran war, according to administration officials. The proposal would involve moving U.S. troops out of North Atlantic Treaty Organization member countries deemed unhelpful to the Iran war effort and stationing them in countries that were more supportive. WSJ
EU will still be hit by a “stagflationary shock” of low growth and rising inflation despite the US and Iran agreeing a two-week ceasefire, the bloc’s top economic official has warned. FT
BOJ Governor Kazuo Ueda said that Japan’s finance conditions remain accommodative, with the level of real rates clearly below zero. BBG
The US is said to be considering lifting sanctions on Venezuela’s central bank to facilitate the flow of billions of dollars into the country’s economy. BBG
Wealthy investors attempted to pull more than $20bn from private credit funds in the first quarter, underscoring the growing strain on the asset class. Please use the sharing tools found via the share button at the top or side of articles. The funds tracked by the FT, which collectively manage investment portfolios worth about $300bn, have honored just over half of the redemption requests they received. Many investors have been forced to wait until a redemption window opens up later this quarter to exit. FT
The Trump administration will likely extend its waiver of sanctions on Russian oil this week, former Treasury and State Department officials said — teeing up a similar move on Iranian oil. Semafor
World Bank forecasts global growth for 2027 at 2.4%, while it said investment remains subdued as firms await clearer signals on the external environment and domestic policy, which it called a binding constraint on growth.

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks were lower in a mild pullback from yesterday's ceasefire-fuelled extremes and as the widespread euphoria gradually waned amid the wide gaps between each side's peace proposals. Furthermore, several strikes had continued in the 24 hours after the announcement, and the inclusion of Lebanon is seen as a key point of contention, while shipping in the Strait of Hormuz remains largely blocked, although a senior Iranian official stated that Iran could open Hormuz on Thursday or Friday ahead of their planned talks. ASX 200 traded little changed amid a lack of data or drivers and with resilience in energy, defensives and financials offsetting the firm losses in the tech sector. Nikkei 225 pulled back after the prior day's stellar performance, with the index returning to beneath the 56,000 level amid very few fresh catalysts and the absence of tier-1 data to sustain the previous momentum. Hang Seng and Shanghai Comp conformed to the uninspired mood amid concerns regarding the fragility of the US-Iran ceasefire, and with weakness in Chinese tech and property stocks, while there were prior reports that the US FCC will vote on a measure that would ban Chinese labs from testing US electronics.

Top Asian News

South Korea's Finance Minister comments that financial and FX market volatility has eased a bit.

European bourses (STOXX 600 -0.6%) have pulled back from Wednesday's ceasefire-related surge after cracks appeared in the agreement. US President Trump announced that the military will remain in and around Iran until a real agreement is fully complied with. Furthermore, the IRGC announced a new Hormuz corridor, effectively raising risks of disruption and bottlenecks. The IBEX 35 outperforms, with the index trading near flat. On the other hand, the DAX 40 is the underperformer. European sectors echo the above bias, with the majority in the red. Energy and Chemicals are amongst the sectors in the green, highlighting its defensive characteristics, while Consumer Products and Services and Technology sit at the bottom of the pile.

Top European News

Italian PM Meloni said ruling out government reshuffle, not planning to resign; if the middle east crisis were to flare up again, Europe should consider temporary suspension of the stability and growth pact.
EU's Dombrovskis said the bloc will still be hit by a “stagflationary shock” of low growth and rising inflation despite the US-Iran ceasefire, while European Commission is preparing to cut growth forecasts, according to FT.

FX Markets are paring some of Wednesday's optimism with crude gaining and general risk-off elsewhere as markets weigh Iran's claims of ceasefire breaches and subsequent concerns over Hormuz following reports from state media.
DXY cautiously chugged higher throughout the European morning, supported by the key 99.00 mark. Overnight, FOMC Minutes were viewed as hawkish, with it stating many members said persistently higher oil prices could keep inflation elevated long enough to justify rate rises. Taking a look at rate expectations, markets moved to price just 7bps of easing by year-end compared to 15bps pre-minutes.
Kiwi continues to perform well, amid hawkish remarks from RBNZ Governor Breman, she said inflation is expected to increase considerably in the near-term, and they will ‘act decisively’ if core prices pick up. This marks the second day of gains against the greenback, with NZD the sole currency that outperforms a mildly stronger USD. In terms of market pricing, 75bps of easing is expected by year-end, an increase of 15bps since last week.
JPY is the worst performer in the G10, as energy prices weigh on the net importer nation. The pair marked a session low of 158.45 and sits on a 159 handle at the time of writing. Elsewhere, EUR/GBP trades a touch above the 0.87 mark. In a note this morning, ING suggests rate differentials will help the cross with EUR; rate expectations are likely to prove sticky and BoE dovish pricing potentially coming "through more smoothly" should energy prices continue to decline.

Central Banks

RBNZ Governor Bremen said more risk on inflation to the upside and inflation is expected to increase considerably in the near-term. said:. Previous rate cuts are still providing some stimulus to the economy, and a swift resolution to the conflict is expected to yield stronger growth this year. RBNZ to ‘act decisively’ if core prices pick up.
BoJ Governor Ueda said short and medium-term interest rates are clearly negative, adds accommodative financial conditions are maintained, leading to moderate increase in capex.

Fixed Income

Global fixed benchmarks are trading flat to lower, as benchmarks pull back from the extremes seen on Wednesday, and as traders begin to find holes within the current ceasefire agreement. This comes after Iran’s Parliament Speaker Ghalibaf said three clauses of the 10-point plan have been violated so far, and as such, a bilateral ceasefire or negotiations is unreasonable. Another interesting point is that Iran introduced controlled shipping routes and coordination with the IRGC, effectively shifting from free transit to monitored flows—raising risks of disruptions and bottlenecks. (Full details on the Newsquawk headline feed). This, alongside continued strikes on both Lebanon and Iran, has led to a rebound in the energy complex, once again renewing inflationary concerns.
USTs are currently flat, and mildly outperforming vs peers – currently trading within a 111-04+ to 111-10 range, and have entirely reversed the initial ceasefire-related optimism. Much of the action facilitated by the geopolitical factors mentioned above, but the complex is also weighed on by hawkish-leaning FOMC Minutes and heading into a 30yr auction later today. On the data front, markets will await weekly claims, February’s PCE data (exp. +0.4% M/M vs prev. +0.3%) and core PCE (exp. +0.4% M/M vs prev. +0.4%); final Q4 GDP stats. From a yield perspective, the 2yr has rebounded back towards 3.785% (vs Wednesday’s trough at 3.713%).
Bunds are in the red and down by around 50 ticks at this stage, and holding towards the bottom end of a 125.67 to 126.10 range. German paper did dip a tick below the high from 7th April, with market participants highlighting 125.53 as a potential area for intraday longs to be exited. Bunds are moving at the whim of energy prices this morning, but there have been some domestic updates. An interesting comment via Italy’s PM Meloni got some attention, after she suggested that the EU should consider a temporary suspension of budget deficit rules if the Iran war persists. No move in EGBs at the time, but traders will remain cognizant of any fiscal related concerns, should a suspension be enacted. From a data perspective, Industrial Production printed at -0.3% (exp. +0.9%), highlighting the turbulent recovery of Germany – even before the Iran war started.
Gilts are underperforming vs peers, after leading the fixed complex on Wednesday. As above, moving at the whim of energy prices, with UK-specific newsflow light. UK 2yr has rebounded back towards 4.237% (vs trough of 4.044% on Wednesday). UK paper currently trades within an 89.10 to 89.61 range; further pressure could see a breach below the 89.00 mark, and then the high from 7th April at 88.88.
UK sold GBP 4bln 4.125% 2033 Gilt: b/c 3.30x (prev. 3.37x), average yield 4.507% (prev. 4.075%), tail 0.2bps (prev. 0.2bps).
Spain sold EUR 5.778bln vs exp. EUR 5-6bln 2.35% 2029, 2.60% 2031 and 3.30% 2036 Bono & EUR 0.676bln vs exp. EUR 0.25-0.75bln 1.15% 2036 I/L Bono.
Japan sold JPY 1.9tln 5yr JGBs; b/c 3.58x (prev. 3.69x), average yield 1.826% (prev. 1.633%).
Unicredit (UCG IM) to sell 6-year EUR-denominated noted, guidance seen +125bps to MS.
Lloyds (LLOY LN) to sell 10-year GBP-denominated noted, guidance seen at +170bps to UK Treasuries.
Japanese Finance Minister Katayama said it is important to base JGB issuance plans on market demand, when asked about extending duration of government debt.

Commodities

Optimism over the US–Iran ceasefire faded as both sides signalled breaches and diverging terms, with Trump warning of military escalation if compliance fails and Iran’s Parliament Speaker Ghalibaf saying multiple clauses of Tehran’s plan have already been violated. Lebanon has emerged as the key fault line—while the US and Israel insist it sits outside the agreement, Iran and its allies treat it as integral, raising the risk of collapse as Israeli strikes and Hezbollah activity continue. The situation in the Strait of Hormuz adds further fragility, as Iran introduced controlled shipping routes and coordination with the IRGC, effectively shifting from free transit to monitored flows—raising risks of disruptions and bottlenecks (Full Analysis available on the Newsquawk headline feed).
Crude rebounded after Wednesday’s biggest one-day drop since April 2020, with Brent Jun'26 back above USD 97/bbl (after Wednesday’s 13% slump), as the Strait of Hormuz remained largely blocked and Israeli attacks on Lebanon raised concerns over the durability of the Middle East truce. WTI May'26 trades towards the top of a USD 96.25-98.38/bbl range and Brent Jun'26 towards the upper end of a USD 96.30-98.53/bbl parameter. Mizuho expects crude to remain near USD 90/bbl through Q2 before returning to pre-conflict levels, while CBA sees upside risks while the Strait remains largely closed and physical undersupply linked to the Iran war supports prices.
Spot gold holds above USD 4,700/oz after rising 1.5% over the prior two sessions, as traders weighed hopes for a diplomatic resolution against sporadic fighting that threatened the ceasefire. However, some flagged a technical correction after the sharp rise in front-month Comex futures. The metal trades within a narrow USD 4,699-4,733/oz range at the time of writing, with the 100 DMA at USD 4,671.57/oz. Commerzbank said gold had been supported by lower oil prices, easing inflation risks and pulling down rate expectations and bond yields, though the outlook still depends on whether a lasting US-Iran settlement emerges.
Copper futures pulled back overnight and remain weak in the European session as the heightened risk appetite from the fragile US-Iran ceasefire petered out, with 3M LME copper in a narrow USD 12,587.00- 12,678.70/oz.
Brazil court suspends oil export tax for Shell (SHEL LN), Equinor (EQNR), TotalEnergies (TTE FP) and Repsol (REP SM).
OECD has urged governments to unwind expensive fuel duty cuts, according to the FT.
Japan considers releasing an additional 20 days of oil reserves, according to Kyodo.
US mulls lifting Venezuela's central bank sanctions with the aim of increasing oil output, according to sources.
Russia is offering sanctioned LNG to Asia via intermediaries at a 40% discount.
Goldman Sachs said Brent would average above USD 100/bbl through 2026 if the Strait of Hormuz stays closed for another month. Adds that the situation remains fluid after the start of a two-week US-Iran ceasefire, and that risks to its oil price forecast are still skewed to the upside.

Geopolitics

US President Trump posted "All U.S. Ships, Aircraft, and Military Personnel....will remain in place in, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with".
US President Trump posted "NATO WASN’T THERE WHEN WE NEEDED THEM, AND THEY WON’T BE THERE IF WE NEED THEM AGAIN. REMEMBER GREENLAND, THAT BIG, POORLY RUN, PIECE OF ICE!!!".
Trump admin is considering a plan to punish some members of the NATO alliance that he believes were unhelpful to the US and Israel during the Iran war, WSJ reported citing admin officials. The proposal would involve moving US troops out of NATO member countries deemed unhelpful to the Iran war effort and station them in countries that were more supportive of the US military campaign. The proposal would fall far short of President Trump’s recent threats to fully withdraw the US from the alliance, which by law he can’t do without Congress. Plans could also include closure of at least 1 US base in a European country, possible Spain or Germany.
NATO Secretary-General Rutte pointed out to US President Trump that a large majority of European nations have been helpful.
US officials say they do not rule out resuming fighting in Iran and that President Trump will not offer major concessions to Iran to open the Strait of Hormuz, adds Iran's insistence on controlling straight reformers could lead to a resumption of fighting.
Iranian Deputy Foreign Minister said the Speaker of Parliament will lead Iran’s delegation for the talks, and the exchange of messages continues via Pakistan, Al Jazeera reported.
Iran Ambassador to Pakistan said the Iranian delegation is to arrive on Thursday night in Islamabad for "serious talks", based on the 10 points proposed by Iran.
IRGC Navy announces alternative shipping routes to avoid possible sea mines, according to ISNA.
IRGC claimed on Thursday that shipping through the Strait of Hormuz slowed sharply and then stopped following what it said was an Israeli ceasefire violation in Lebanon, according to CNN.
Iranian Parliament's Security and Foreign Policy Committee Chairman Ibrahim Azizi said '"Once again, you have proven that you do not know the meaning of a ceasefire" and "Only fire will discipline you...so wait for it".
Saudi Arabia and Iran reportedly discussed de-escalation in a call, according to SPA.
Pakistani Foreign Ministry senior source suggests US has walked back on including Lebanon in the ceasefire with Iran, Al Arabiya reported.
Israeli PM Netanyahu says will continue to strike Hezbollah with force, overnight, the IDF struck a series of terror infrastructures in southern Lebanon.
Israel's Ministry of Energy directs the resumption of operations at the Karish gas platform after it halted due to the war, according to Israel's Channel 12.
Hezbollah said its attacks on Israel will continue until the aggression stops, according to Fars News Agency, while it fires rockets at Israel citing ceasefire breaches.
Missile fired from Lebanon into Northern Israel, according to Fars News Agency.
Israeli attacks continue in Lebanon, despite a ceasefire with Iran, according to Anadolu Agency.
French President Macron spoke with Iran's President Pezeshkian and US President Trump, and told both that their decision to accept the ceasefire was the best possible one.
Russia launched 119 drones at Ukraine overnight according to UKR media.

US Event Calendar

8:30 am: United States Feb Personal Income, est. 0.3%, prior 0.43%
8:30 am: United States Feb Personal Spending, est. 0.6%, prior 0.38%
8:30 am: United States Feb PCE Price Index YoY, est. 2.8%, prior 2.83%
8:30 am: United States Feb Core PCE Price Index MoM, est. 0.4%, prior 0.4%
8:30 am: United States Feb Core PCE Price Index YoY, est. 3%, prior 3.06%
8:30 am: United States Apr 4 Initial Jobless Claims, est. 210k, prior 202k
8:30 am: United States Mar 28 Continuing Claims, est. 1828k, prior 1841k
8:30 am: United States 4Q T GDP Annualized QoQ, est. 0.7%, prior 0.7%
8:30 am: United States 4Q T Personal Consumption, est. 2%, prior 2%
8:30 am: United States 4Q T GDP Price Index, est. 3.8%, prior 3.8%
8:30 am: United States 4Q T Core PCE Price Index QoQ, est. 2.7%, prior 2.7%
10:00 am: United States Feb F Wholesale Inventories MoM, est. -0.1%, prior -0.5%

DB's Jim Reid concludes the overnight wrap

As we go to press this morning, oil prices are creeping up again as several questions remain about the ceasefire announced on Tuesday night. A few factors have driven that, but it’s pushed Brent crude oil (+2.34%) back up to $96.97/bbl, and it’s also taken the momentum out of the market rally overnight. Indeed, Asian equities are down across the board after yesterday’s surge, whilst US and European equity futures have also stumbled. So the Nikkei (-0.75%), the KOSPI (-1.61%), the CSI 300 (-0.64%) and the Hang Seng (-0.36%) have all fallen back this morning, and S&P 500 futures (-0.21%) are also pointing towards losses after a run of 6 consecutive gains.

Those overnight losses follow several indications that the ceasefire isn’t holding quite as expected on Tuesday night. For instance, both the UAE and Kuwait said yesterday that their air defences had been intercepting drones from Iran. And on the Iranian side, their Parliament’s Speaker Ghalibaf said that three points of the ceasefire agreement had been violated. Moreover, the IRGC warned of a “regret-inducing response" if Israel’s strikes against Lebanon didn’t stop immediately, whilst the Fars news agency said that the passage of oil tankers through the Strait of Hormuz was halted because of Israel’s continued strikes on Lebanon. So collectively, that’s raised concern about how durable this ceasefire will prove, particularly with it only being a two-week truce.

In the meantime, President Trump also posted overnight that US forces would “remain in place, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with.” He also said that if it weren’t complied with, then the military action would be “stronger than anyone has ever seen before”, and that the US military was “looking forward, actually, to its next Conquest”. He also criticised NATO in a separate post overnight, saying that they weren’t “there when we needed them”, and called on people to “remember Greenland, that big, poorly run, piece of ice!!!”. So that raised concerns about a repeat of mid-January, when Trump’s call for the US to take Greenland and the threat of European tariffs drove a risk-off move in global markets.

Nevertheless, compared to 24 hours ago, the market stress has eased considerably, as the ceasefire news and hopes for a de-escalation pathway have created a lot more optimism. Moreover, there are still signs of progress, with White House Press Secretary Leavitt saying that Vice President JD Vance would lead a delegation to Islamabad, with a first round of talks scheduled for Saturday morning.

So despite the overnight newsflow, the net result is that fears have eased considerably about a stagflationary shock, with huge gains for bonds and equities as a result. Indeed, Brent crude oil prices saw a sharp decline of -13.29% yesterday, taking them to a 4-week low of $94.75/bbl. And in turn, there was an incredibly strong performance, particularly in Europe, where the STOXX 600 (+3.88%) posted its best performance since 2022, whilst 10yr bund yields (-14.1bps) saw their biggest decline since 2023. Similarly in the US, the S&P 500 (+2.51%) was also back within 3% of its record high, whilst US HY spreads (-17bps) fell beneath their pre-strike levels in late-February. So even with all the volatility of recent weeks it was another day of historic moves, and the overnight move for Brent crude this morning (+2.34%) still leaves us well beneath the pre-ceasefire oil price of around $110/bbl.

The ceasefire itself was the main driver of those moves, but they got further support from the positive tone of US officials yesterday. For example, President Trump said the US would “work closely with Iran”, and that they were discussing tariff and sanctions relief, though he also said in a subsequent post that countries supplying military weapons to Iran would face a US tariff of 50%. And later on, Vice President Vance said that “we’re on the right track” in negotiations.

So overall, even with the question marks around a ceasefire, the fact one had been agreed led to a huge wave of optimism, with investors feeling much clearer about the path to a de-escalation. Most directly, the prospect that the Strait of Hormuz might reopen led to a big decline in oil prices, with Brent crude (-13.29%) down to a 4-week low of $94.75/bbl, whilst WTI (-16.41%) fell to $94.41/bbl. Meanwhile, we saw a big decline in European natural gas, with front-month TTF futures (-14.92%) falling to €45.30/MWh, their lowest in over a month, which again eased fears about the scale of any European inflation shock. However, with persisting restrictions on Hormuz shipping, the declines were more modest further out the oil curve, with the 6-month Brent future (-2.33%) closing at $81.19/bbl, still above its levels late last week.

That backdrop of lower energy prices meant that inflation fears eased dramatically, which in tun led to a dovish repricing of central banks, especially in Europe. For instance, the 1yr US inflation swap plummeted by -12.9bps to 3.13%, and the 1yr Euro inflation swap fell by a huge -38bps to 3.11%. In turn, that saw investors price out the likelihood of rapid rate hikes, with the probability of an ECB hike this month down from 68% before the ceasefire announcement to 32% by yesterday’s close, and a further decline to 29% this morning.

All that meant yields saw dramatic declines in Europe. Indeed, 10yr bund yields (-14.1bps) were back down to 2.94%, marking their biggest daily decline since April 2023. At the front end, the 2yr German yield (-22.4bps) saw its biggest decline since March 2023, the week of Credit Suisse’s collapse, so it was another day of historic declines. And it a similar story across the continent, with 10yr OATs (-20.1bps), BTPs (-26.1bps) and gilts (-19.3bps) all posting their biggest declines since 2023 as well.

US Treasuries saw more muted moves, given yields had already fallen late in Tuesday’s session and oil prices were edging higher later in the US session yesterday. So both 2yr yields (-0.1bps at 3.79%) and 10yr yields (-0.2bps at 4.29%) were little changed by the close, having been 6-8bps lower on the day early on. We also got the minutes of the March FOMC meeting, which showed the uncertainty on how officials should respond to the war’s impact. It said that “most participants” were concerned that “a protracted conflict in the Middle East could lead to a further softening in labor market conditions, which could warrant additional rate cuts”. But it also said that “Many participants pointing to the risk of inflation remaining elevated for longer than expected amid a persistent increase in oil prices, which could call for rate increases”.
For equities, there were also dramatic moves yesterday, as the oil price slump provided a huge lift on both sides of the Atlantic. In Europe, the rally was the biggest in several years, with the DAX (+5.06%) and the STOXX 600 (+3.88%) seeing their biggest gains since March 2022. Indeed, the latest gains left the STOXX 600 just over 3% beneath its record high just before the strikes began. Then in the US, the S&P 500 (+2.51%) advanced by a slightly smaller amount, but it was still a 6th consecutive advance for the index, with the VIX index of volatility (-4.74pts) down to its lowest since the strikes began, at 21.04pts. However, the main exception to those equity gains came from the energy sector, with the S&P 500’s energy component down -3.66%.

Emerging market assets were another beneficiary amid the easing energy fears, with the MSCI EM equity index (+5.49%) posting its biggest rise since the early Covid volatility in March 2020. By contrast, the dollar index (-0.73%) fell for a third consecutive session for the first time since the strikes began.

Looking at the day ahead, data releases include US PCE inflation for February, the weekly initial jobless claims, the third estimate of Q4 GDP, and German industrial production for February. Otherwise from central banks, we’ll hear from the ECB’s Sleijpen.

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