US equity futures are flat following yesterday’s rally as market awaits news on the Iran war resolution and as we traverse earnings season. As of 8:15am ET, S&P 500 futures are little changed after the benchmark closed within a whisker of a record. Risk sentiment took a small knock in recent trade after Iran cautioned that it will not allow shipments to or from the Gulf if the US blockade remain.Nasdaq futures are fractionally in the green, and set for an 11th consecutive gain as the massive short squeeze/CTA forced buying continues: in premarket trading, Mag7 / Semis are mixed, Discretionary and Staples are both stronger, Fins / Indu are leading Cyclicals with weakness in Materials.  Bank of America and Morgan Stanley rose in premarket trading as their equity traders posted strong revenue beats. Europe’s Stoxx 600 traded flat, while China’s mainland blue-chip index became the latest in Asia to recoup losses since the Iranian war began. Brent erased early losses to rise 1% toward $96 a barrel as the US pressed ahead with a naval blockade of the Strait of Hormuz. Treasuries edged lower, with the two-year yield rising one basis point to 3.76% and the 10Y rising 2bps to 4.27%. The dollar is slightly stronger which would break a 7 session losing streak if gains hold while gold fell toward $4,800 an ounce. Other commodities are mixed with Ags, Base metals, and the Energy complex ex-natgas bid. Today’s macro data focus is on Beige Book, TIC data (keep an eye on buys/sells of Trsys), Housing prices, Empire Mfg, and Import/Export prices.

In premarket trading, Mag 7 stocks are mixed (Microsoft +0.6%, Tesla +0.5%, Meta +0.1%, Apple -0.04%, Alphabet -0.2%, Amazon -0.08%, Nvidia -0.1%)

Quantum computing stocks rise, on track to extend gains, after Nvidia unveiled a suite of new open-source AI models aimed at accelerating progress within quantum computing.
Solar stocks are rising after Reuters reported that China held initial talks with providers of equipment to make solar panels as it considers limiting exports of the most advanced technology to the US, citing five people familiar with the matter. Gainers include First Solar (FSLR) +4%.
Broadcom (AVGO) rises 3% after the technology company expanded its partnership with Meta to deploy AI infrastructure.
BRP Inc. (DOO) slumps 22% after the Canadian recreational manufacturer withdrew its financial outlook for the 2027 fiscal year, saying it faces a $363 million hit from recent changes by the Trump administration to its tariffs.
Cloudflare (NET) gains 3% as Piper Sandler upgrades to overweight, calling it an “AI-winner to own.”
Gitlab (GTLB) gains 6% after the company announced a collaboration with Google Cloud to bring agentic DevSecOps to enterprise teams using Vertex AI.
Robinhood (HOOD) rises 7% and Webull (BULL) gains 8% after the Securities and Exchange Commission gave the go-ahead for sweeping changes to a restriction on day-trading activity by small investors.
Snap Inc. (SNAP) climbs 8% after saying it is laying off roughly 1,000 full-time employees, or 16% of its global workforce, part of an effort by Chief Executive Officer Evan Spiegel to reduce costs and achieve profitability.
SolarEdge Technologies (SEDG) slips 3% after Goldman Sachs downgraded the company to sell, saying expectations are too high.
TeraWulf (WULF) falls over 7% after the Bitcoin mining company’s preliminary first-quarter revenue came in below Wall Street’s expectations. The company also said it is offering $800 million of shares via Morgan Stanley and Cantor Fitzgerald.

In corporate news, Anthropic has received offers from investors for a new round of funding that could value the company at about $800 billion or higher. Meta anounced an expanded multibillion-dollar partnership with Broadcom to design and build custom chips for AI. Stellantis’s global shipments jumped 12% in the first quarter, led by a surge in demand in North America for its refreshed Jeep and Ram models.

In the latest Middle East developments, as US/Iran move towards a second official negotiation, another aircraft carrier (USS George HW Bush) is set to arrive with additional soldiers and war ships around Apr 21, with the ceasefire set to expire on Apr 22; this carrier group’s route appears to be avoiding the Suez Canal / Red Sea / Bab el-Mandeb Strait. The USS Abraham Lincoln has completed repairs in Crete though it is unknown if it will resume activities in the ME Conflict, which would be the third aircraft carrier. Bessent says ME Conflict is worth having some short-term economic pain for long-term gain. Iran’s state TV cited Ali Abdollahi, the commander of Iran’s joint military headquarters, who warned that if the US continues to impose a naval blockade in the region and creates insecurity for Iran’s ships, “this action by the US will constitute a prelude to a breach of the ceasefire.” If the blockade continues, Iran’s armed forces “will not permit any exports or imports to continue in the Persian Gulf, the Sea of Oman or the Red Sea.”

Meanwhile, bank earnings point to a generally healthy consumer and corporate sector, both able to withstand the supply chain shock emanating from the Middle East without experiencing stagflation / recession.

President Trump told the New York Post that talks could resume “over the next two days” and said in a Fox Business interview the war is “close to over.” Mediators moved closer to extending the ceasefire between the two parties, the Associated Press reported.

Investors have been piling back into stocks even with no clear end in sight to the war, which has choked off around a fifth of global crude supplies and risked a surge in inflation that could still prompt central banks to tighten policy. 

“Amid all the uncertainty, I consider it warranted to re-focus on the outlook beyond the war,” said Holger Schmieding, chief economist at Berenberg. “A key driver of markets is that the war-related dash for liquidity is over and partly reversing. That helps the more risky assets.”

Technology shares in particular have been snapped up after lagging the market for much of the year, with the Nasdaq 100 notching its longest stretch of daily wins since 2021. In just the past two sessions, a popular exchange-traded fund that tracks the software industry is up 6.4%. Oracle Corp. has soared 18% and Microsoft Corp. and Palantir Technologies Inc. have gained 6%. 

“The US tech sector, including the Magnificent Seven, is much cheaper today than six months ago,” said Lilian Chovin, head of asset allocation at Coutts & Co. “Concerns around the Middle East won’t disappear all of a sudden, but the ability of those companies to generate earnings in a difficult macro environment remains very attractive.”

With the earnings season now in full swing, investors will watch for signs of whether the conflict is denting the outlook for earnings and whether corporates and consumers are cutting back on spending amid the uncertainty. In Europe, ASML Holding NV shares fell 0.5% as a weaker-than-expected sales outlook for the second quarter tempered a raised full-year forecast for the maker of advanced chipmaking machines. Luxury firms Hermes International SCA and Kering SA slumped after disappointing sales updates.

It’s still early in the earnings season, but Vital Knowledge founder Adam Crisafulli said he’s “impressed by the resiliency of Corporate America” so far. Management teams at the likes of Citigroup, Delta Airlines and JPMorgan have pointed to relatively stable trends in terms of customer spending and activity, he said. That’s helping the narrative of US strength over the rest of the world. In Europe, luxury giants Hermès and Kering both reported poor results as the war crimped sales.

Financials dominate the first week of earnings season, but remain bottom of the pile in sector returns for the year. Morgan Stanley is expected to post record equity-trading revenue, while BofA’s top-line gains and cost control in 1Q should usher in positive operating leverage, according to BI. 

Elsewhere, chip equipment maker ASML’s CEO expects chip demand to outpace supply “for the foreseeable future,” creating “a strong constraint” in various markets from AI to mobile and PC. These supply/demand dynamics are showing up in the global smartphone market, which suffered its first decline since 2023 in 1Q, according to market tracker IDC. The memory crunch and war in Iran are likely to elevate costs and constrain growth further in 2026.

“Earnings will be key for fundamental investors to step in and chase or fade,” said Emmanuel Cau, head of European equity strategy at Barclays Plc. With “stocks near year-to-date highs, it feels like easy gains are behind us and fundamentals should prevail again.”

In geopolitics, Treasury Secretary Scott Bessent told the BBC that the Iran war is worth a “small bit of economic pain,” ahead of what is likely to be a tense meeting with his UK counterpart Rachel Reeves. Trump described the relationship with the UK as “sad,” adding that the trade deal between the countries “can always be changed.” Chinese President Xi Jinping pledged deeper bilateral coordination with Russia.

European indices mostly tilt lower with the broad Stoxx 600 down 0.1% with technology and health care shares leading gains, while consumer products and energy stocks are the biggest laggards. The CAC 40 lags with losses of 0.6% following disappointing earnings from Hermes and Kering, with the former posting its largest decline on record. Here are the biggest movers Wednesday:

Aixtron gains as much as 15%, to the highest since June 2001, after pre-announcing its first-quarter results and lifting guidance for the full year
ASML shares advance as much as 1.8% after the Dutch firm raised full-year sales guidance, a signal of strong demand from chipmakers
Basic-Fit shares jump as much as 8.3%, to the highest intraday since Jan. 27, after KBC Securities upgraded the Dutch health club chain to buy from hold
DFDS shares rise as much as 16%, their biggest gain in over a year, after the shipping and logistics company raised its Ebit guidance
Intertek Group shares rise as much as 14% after analysts welcomed the group’s initiation of a strategic review to evaluate if Intertek Testing & Assurance and Intertek Energy & Infrastructure would be better positioned as separate businesses
Saga shares jump as much as 12% to the highest in six years after the travel and insurance company reported full-year results, with Peel Hunt noting encouraging current trading and strong ocean cruise bookings
Hermès shares fall as much as 14%, the most on record, after the luxury-goods firm reports first-quarter sales that missed analyst estimates, dragged down by a weak performance in Asia Pacific and France
Kering shares fall 10% after the French luxury group’s key fashion & leather goods unit fell short of expectations, dragged down by worse-than-expected Gucci sales
Imperial Brands drops as much as 3.2% after being downgraded by analysts at UBS on a lack of near-term catalysts and concerns around more intense competition
Colruyt declines as much as 6%, the most in almost four months, as JPMorgan places the retail company on a negative catalyst watch into its full-year results in June and lowers its price target to a new Street low

Earlier in the session, stocks in Asia gained after the US and Iran stepped up efforts to arrange a second round of peace talks, reviving hopes for an end to six weeks of hostilities in the Middle East that fueled an energy crisis. The MSCI Asia Pacific Index rose as much as 1.4%, led by gains in TSMC and Samsung Electronics. A gauge of the region’s technology stocks jumped as much as 2.9% to an all-time high, tracking an overnight rally on Wall Street. South Korea’s Kospi outperformed major markets. Thailand was closed for a holiday.
Renewed optimism over Middle East stability has shifted investor focus back toward technology earnings and the outlook for further AI-driven capital expenditure. While geopolitics risks linger, fatigue is tempering reactions to incremental developments. Stocks advanced in Hong Kong, Japan and the Philippines. Shares also traded higher in India as trading resumed after a holiday. 

In rates, treasuries are marginally cheaper across the curve in early US trading, having erased small gains spurred by AP report that the US and Iran agreed in principle to extend a truce. US 2- to 10-year yields are 1bp-2bp cheaper with long-end little changed, flattening 5s30s spread by less than 1bp; 10-year near 4.26% slightly underperforms German and UK counterparts. US session has few scheduled events beyond Fed Beige Book release. Corporate new-issue calendar has begun to build, with a busy day expected after several borrowers stood down Tuesday. 

In FX, the Bloomberg Dollar Spot Index has just veered into positive territory, up 0.1% after a run of seven consecutive losses.

In commodities, oil is higher following sharp drop from Monday’s high that helped drive gains for US stocks. WTI crude oil futures remain about 1.5% higher with the latest update from Iran sending prices to session highs. Spot gold and silver have ebbed lower throughout the session, showing respective losses of 1% and 1.3%. Bitcoin loses 0.3%.  

The US economic data calendar includes April Empire manufacturing and March import/export price index (8:30am), April NAHB housing market index (10am) and February TIC flows (4pm). Fed speaker slate includes Governor Barr and Cleveland’s Hammack (8:30am) and Governor Bowman (1:45pm); Beige Book released 2pm.

Market Snapshot

S&P 500 mini little changed
Nasdaq 100 mini little changed
Russell 2000 mini -0.1%
Stoxx Europe 600 little changed
DAX little changed
CAC 40 -0.5%
10-year Treasury yield +1 basis point at 4.26%
VIX little changed at 18.32
Bloomberg Dollar Index little changed at 1193.5
euro little changed at $1.1786
WTI crude +1.2% at $92.36/barrel

Top Overnight News

US President Donald Trump played down the prospect of renewed fighting in the war with Iran, saying the war is “close to over” and extending a ceasefire that expires next week may not be necessary. Talks between the US and Iran might restart “over the next two days”, according to Trump, after an initial round of peace talks ended in Pakistan on Sunday without a deal. BBG
The Pentagon is sending thousands of additional troops into the Middle East in the coming days, as the Trump administration attempts to pressure Iran into a deal that could end the weeks long conflict there while considering the possibility of additional strikes or ground operations if a fragile ceasefire deal does not hold. WaPo
A fallback plan to ensure Europe can defend itself using NATO’s existing military structures if the U.S. departs is gaining traction after getting buy-in from Germany, a long-term opponent of a go-it-alone approach. The officials working on the plans, which some officials are referring to as “European NATO,” are seeking to get more Europeans into the alliance’s command-and-control roles and supplement U.S. military assets with their own. WSJ
Xi Jinping met Russian Foreign Minister Sergei Lavrov in Beijing. BBG
The US-UK trade deal “can always be changed,” Trump told Sky News, describing the relationship between the two countries as “sad.” BBG
ASML raised its sales forecast as the surge in AI spending continued to boost demand, as optimism about the tech returned to the spotlight. BBG
President Donald Trump’s tariffs may be restored by July to the levels in place before the Supreme Court struck down many of his levies, Treasury Secretary Scott Bessent said. BBG
Maine lawmakers have passed a bill that could make it the first U.S. state to put a moratorium on new data centers as ‌opposition to the electricity-hungry facilities grows across the country over their impact on household energy bills and the environment. The bill would freeze approvals for data centers requiring more than 20 megawatts of power until October 2027, while a state-appointed council analyzes ⁠their impact on the local grid, electricity bills, air and water. RTRS
Anthropic received several offers for a new round of funding that would more than double its pre-money valuation to about $800 billion or higher, people familiar said. BBG
US Treasury has begun quietly asking private credit firms to submit information detailing their business models and ties to the regulated financial system: Punchbowl.
US Treasury Secretary Bessent said underlying economy remains strong and still thinks growth could exceed 3% to 3.5% this year.
White House Economic Advisor Hassett said real income growth is very high and he is confident the economy will be strong this year.

Iran War

Effort to extend US-Iran ceasefire has made progress, AP reports citing official; mediators aim to extend the ceasefire for at least another two weeks; both sides gave an “in principle agreement” to extend the ceasefire.
Discussions are underway regarding possible extension of temporary ceasefire between Iran and US, according to Arab diplomatic sources cited by Russia on Wednesday and being reported by Chinese press CCTV. However, US President Trump said it could end either way, but thinks a deal is preferable because then Iran can rebuild, also said he isn’t thinking about extending the ceasefire and doesn’t think it will be necessary, according to reported citing ABC reporter on X.
The Pentagon is sending thousands of additional troops into the Middle East in the coming days, WaPo reports citing US officials; in a bid to pressure Iran while mulling the possibility of additional strikes or ground operations if the ceasefire breaks.
US President Trump said it’s “very possible” a deal with Iran will be reached by the time the King visits the US later this month (27-29th April), Sky News reported.
US President Trump said he views the war being very close to over, according to Fox News.
US VP Vance said we are negotiating with Iran and ceasefire is holding, adds Iranian negotiators wanted to make a deal. Feel good about where we are. Lot of mistrust between the US and Iran, can’t be solved overnight.
US Vice President JD Vance is expected to lead a potential second round of talks with Iranian officials should negotiations lead to another face-to-face meeting before the ceasefire expires next week, according to sources familiar cited by CNN.
Pakistan leadership’s overseas tour until April 18th dims prospects of US-Iran talks in Islamabad before April 18th, Pakistani journalist Mallick reported.
Iran is to use alternative ports to those in southern Iran to bypass the US blockade in the Strait, Mehr News reported.
An Iranian VLCC (Very Large Crude Carrier), which was on the US sanctions list, entered the waters of Iran past the US blockade, Fars reported.
Iran secretly acquired a Chinese spy satellite that gave the Islamic republic a powerful new capability to target US military bases across the Middle East during the recent war, according to an FT investigation.
US Central Command said blockade of Iranian ports has been fully implemented and that US forces have completely halted economic trade going into and out of Iran by sea.
US has intercepted eight Iran-linked oil tankers since the start of the blockade, according to WSJ.
New satellite images show Iran digging for missile launchers trapped underground amid a ceasefire, according to CNN.
More than 20 commercial ships have passed through the Strait of Hormuz in the past 24 hours, WSJ reported, citing US officials.
US destroyer interdicted two oil tankers that attempted to leave Iran on Tuesday, according to an official cited by Reuters.
US President Trump reiterates on Truth Social “NATO wasn’t there for us, and they won’t be there for us in the future!”.
Europe is accelerating a NATO fallback plan in case US President Trump pulls US out of the treaty, according to WSJ.
US Pentagon is likely to trim its Iran wall funding request, according to WSJ citing Senator Coons who is the top democrat on the Senate appropriations defence committee.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region took its cue from the rally on Wall St amid continued hopes regarding US-Iran talks, while President Trump suggested talks could occur during the next two days. ASX 200 eked mild gains, but with upside capped as strength in tech, gold miners and health care was offset by losses in energy and some defensives, while trade was also restricted by a lack of data and drivers. Nikkei 225 rallied above the 58,000 level, with the positive risk sentiment facilitated by the recent decline in oil prices and the much stronger-than-expected Machinery Orders. Hang Seng and Shanghai Comp were positive with the gains in Hong Kong led by tech strength, while oil majors lagged after the recent oil decline. Furthermore, the PBoC continued its meagre daily liquidity efforts through 7-day reverse repo operations, but had announced yesterday to conduct CNY 500bln of 183-day outright reverse repos for today.

Top Asian News

China’s State Council says temporary measures, including suspending approvals or filings, may be used to address industries facing severe disorderly competition.
Chinese President Xi said in meeting with Russian Foreign Minister Lavrov that China is to enhance communications with Russia and the stability of ties with Russia is valuable.
Russian President Putin’s visit to China is being prepared and the timing of the visit will be announced by the Kremlin in due course, according to Kremlin spokesperson Peskov.

European bourses (STOXX 600 U/C) point to a mixed picture, primarily driven by diverging earnings. The CAC 40 (-0.6%) is the big underperformer following losses in luxury names (Hermes -9%, Kering -9.1%), while the AEX (+0.1%) slightly outperforms as ASML (+0.1%) gains. As mentioned above, Q1 earnings reports by ASML, Kering and Hermes have been of focus this morning. Starting with Europe’s most valuable company, ASML reported sales that beat estimates while also raising its FY26 revenue guidance. The CEO highlighted that demand for chips is outpacing supply and that order intake continues to be very strong. Despite the strong report, shares initially fell slightly at the open, possibly on the softer Q2 sales guidance, but has reversed course since.

Top European News

French Inflation Rate YoY Final (Mar) Y/Y 1.7% vs. Exp. 1.7% (Prev. 0.9%); HICP Y/Y 2.0% vs. prelim. 1.9%.
French Inflation Rate MoM Final (Mar) M/M 1.0% vs. Exp. 0.9% (Prev. 0.6%).
EU Industrial Production MoM (Feb) M/M 0.4% vs. Exp. 0.3% (Prev. -1.5%, Low. -0.5%, High. 1.0%)
EU Industrial Production YoY (Feb) Y/Y -0.6% vs. Exp. -1.4% (Prev. -1.2%, Low. -1.9%, High. -1.0%)
Polish Inflation Rate MoM Final (Mar) M/M 1.1% vs. Exp. 1% (Prev. 0.3%).
Polish Inflation Rate YoY Final (Mar) Y/Y 3.0% vs. Exp. 3% (Prev. 2.4%).

Trade/Tariffs

China is reportedly considering curbs on solar manufacturing equipment exports to the US, Reuters reported citing sources.
US Treasury Secretary Bessent said tariffs could be back in place to previous levels by July, and doesn’t think there’s a big risk from Trump’s China trip; US wants to de-risk, not decouple from China and China’s global trade surplus is getting excessive.
US Treasury Secretary Bessent plans to visit Japan in mid-May, Kyodo reported.
An Indian trade official said a trade delegation will visit the US from April 20–22nd for trade deal talks.
Australia and Brunei committed to maintaining open trade flows, while both sides reaffirmed commitment to strengthen energy and food security.

FX

G10s are mostly lower against the USD, with the AUD marginally outperforming whilst the CHF lags incrementally. Overall, it is a cautious mood in the FX space as markets await details on when/if the second round of US-Iran talks will begin.
DXY trades above the 98.00 handle, which it dipped under on Tuesday. The narrative remains an optimistic one with MUFG saying it looks like “the period when investors begin throwing in the towel on the long dollar trade.” and ING writing this morning that these USD levels “seem to embed a fair amount of premature optimism”. The greenback sees a busy calendar ahead with comments from the US President to be aired at 11:00 BST via Fox News and several Fed speakers, including Barr (voter; no text expected) to speak on consumer compliance supervision and regulation, Hammack on CNBC (2026 voter; no text expected) and Bowman (voter, dove; no text expected) to speak at the IIF.
It is worth noting that the USD saw some mild strength following a piece in the Washington Post, which suggested that the US is sending “thousands of additional troops into the Middle East in the coming days… in a bid to pressure Iran” – the piece also highlighted the possibility of additional strikes or ground operations if the ceasefire breaks.
Several updates for the UK this morning, with Times and Sky News scoops lacking good news for the Chancellor. On the domestic front, The Times hears that UK Chancellor Reeves is looking to back down on plans to increase fuel duty by 5p a litre from September; the suggestion is that the move would cost about GBP 2.6bln. On defence, Chancellor Reeves is said to have proposed only increasing defence spending by less than GBP 10bln over the next four years, fearing a bigger increase would be unaffordable. On the docket ahead, the Chancellor is planning to meet with US Treasury Secretary Bessent in the US today. It should not be a game-changer. She is expected to touch on the Strait of Hormuz, the need to stabilise markets, and potentially to confirm the UK’s participation in the EU’s EUR 90bln loan to Ukraine, POLITICO reported. BoE’s Greene and Bailey to speak later in the day. As sterling digests these updates, EUR/GBP trades unchanged below the key 0.87 mark, while Cable is also unchanged as it pulled back from Tuesday’s 1.3589 high.

Central Banks

ECB President Lagarde said ECB is in a good position to respond to the Iran situation, adds would be a mistake to say we need to look through the shock, and it’s just too soon to make such a conclusion.
ECB’s Rehn said tightening is not guaranteed, the policy path depends a lot on how the Middle East conflict evolves.
BoK Governor nominee Shin said South Korea inflation is to accelerate and external risks pose uncertainty. Sees upward pressure on prices and downward pressure on the economy. Risks may expand further and economic growth may weaken. To seek to stabilise prices and financial stability, and will work to internationalise the won. Monetary policy needs to act if there are prolonged inflationary pressures stemming from Iran war.
SNB, ahead of the end-2027 introduction of the PSFF, has decided to lower the special-rate surcharge from 50bps to 25bps as of July 1st.
The PBoC raises the leverage ratios for bank’s overseas loans.

Fixed Income

Global fixed benchmarks are currently mixed, with USTs a little lower whilst Bunds and Gilts continue to build on recent strength. The geopolitical environment appears to be easing, with traders now digesting President Trump’s latest comments, where he stated that he views the war as being very close to over, adding that he does not think it will be necessary to extend a ceasefire. Given the generally positive mood music, crude prices remain at recent lows, reducing inflationary implications on the economy for the time being. Markets await further commentary from POTUS at 11:00 BST.
It is worth noting that USTs dipped into the red in recent trade after a piece in the Washington Post suggested that the US is sending “thousands of additional troops into the Middle East in the coming days… in a bid to pressure Iran” – the piece also highlighted the possibility of additional strikes or ground operations if the ceasefire breaks. US paper currently trades at the lower end of a 111-14 to 111-21 range. Geopols aside, import/export prices, the NY Empire State Manufacturing Index, the Fed’s Beige Book, TIC/foreign bond investment data are due. On the speaker slate, Fed’s Barr, Bowman and Hammack are all on the docket.
Bunds are firmer by c. 10 ticks, and towards the lower end of a 125.35 to 125.40 range. Further pressure in German paper could see a breach below Tuesday’s close at 125.32, and then 125.21 (50% fib of Tuesday’s move). No move to the 2048, 2052 and 2056 Bund auctions. From a yield perspective, the GE 2yr oscillates around near-term troughs at 2.53%, but well off the levels seen pre-war. UniCredit analysts highlight that following the US-Iran ceasefire announcement, the German 10/30yr spread has bull-steeped and is currently trading at 56bps, 14bps higher than the recent trough. Despite the recent hopes of an end of the conflict, the analysts do not see the spread returning to the pre-conflict 67bps anytime soon.
Gilts gapped higher by 30 ticks, briefly extended to a peak of 89.31, before scaling back off those levels as the morning progressed to make a trough of 88.88. As above, Gilts moved higher on the geopolitical optimism, before moving off best levels alongside peers. In terms of the BoE, money markets currently assign no chance of a hike in April, and fully price in a 25bps hike in September – ultimately, markets remain cautious about the inflationary implications of the Iran conflict, despite signs of easing tensions. Focus today will be on BoE speak from Greene (15:15 BST), and Bailey, the latter slated to speak twice; in recent commentary, the Governor believed markets were “getting ahead of themselves by pricing in rate hikes”.

Commodities

In geopolitics, US President Trump told Fox that he sees the Iran war as “very close to being over” and said talks could resume “over the next two days”; the full interview is due to air at 11:00BST/06:00EDT. Elsewhere, it was also reported that discussions are underway regarding a possible extension of the temporary ceasefire between Iran and the US. That being said, it’s worth noting that Pakistan’s leadership will be away until April 18th, which dims the prospects of a US-Iran meeting before that date, according to local journalists.
Crude prices were hit on Tuesday as traders weighed prospects for a second round of US-Iran talks against the near-total double blockade of flows through the Strait of Hormuz. Early morning action saw both Brent Jun and WTI Jun trade on either side of the unchanged mark, and near recent lows. However, the complex gradually lifted off lows as the morning progressed, and then took a leg higher to session peaks following a WaPo piece which suggested that the US is sending “thousands of additional troops into the Middle East in the coming days… in a bid to pressure Iran” – the piece also highlighted the possibility of additional strikes or ground operations if the ceasefire breaks. Brent Jun currently holds at the upper end of a USD 93.93-96.25/bbl range; WTI Jun also firmer today, within a USD 84.70-89.75/bbl range.
Gold eased into the European session and currently resides in a USD 4,792-4,871/oz range at the time of writing. Some desks view the recent move as technical, with prices bouncing off the 200 DMA in late March. Base metal prices are mostly but modestly firmer. London copper has now erased all losses triggered by the conflict, moving above its 27th February close as traders focused on possible peace talks. 3M LME copper resides in a tight USD 13,251.45- 13,391.60/t range.
Codelco is in talks with India’s Hindustan Copper over a joint venture for Chilean copper.
Japan plans to extend private sector oil release by one month, according to TV Asahi.
Venezuela’s Interim President Rodriguez called for a long-term energy partnership with the US.
White House said more than 100 empty oil tankers are on their way to U.S. ports to load American crude, CBS reported. Of the 103 empty vessels, 54 are Very Large Crude Carriers capable of transporting approximately two million barrels. Among them were “20 empty tankers under European flags and 20 under Asian flags” that had “recently unloaded elsewhere”.
US Private Energy Inventories (bbls): Crude +6.1mln (exp -1.3mln), Distillate -3.4mln (exp. -2.5mln), Gasoline +0.6mln (exp. -2.2mln), Cushing -1.7mln.

US Event Calendar

7:00 am: United States Apr 10 MBA Mortgage Applications, prior -0.8%
8:30 am: United States Apr Empire Manufacturing, est. 0, prior -0.2
8:30 am: United States Mar Import Price Index MoM, est. 2.3%, prior 1.3%
8:30 am: United States Fed’s Barr in Moderated Discussion
8:30 am: United States Fed’s Hammack Appears on CNBC
1:45 pm: United States Fed’s Bowman Speaks at IIF Forum
2:00 pm: United States Fed Releases Beige Book
4:00 pm: United States Feb Total Net TIC Flows, prior -25.02b
4:00 pm: United States Feb Net Long-term TIC Flows, prior 15.51b

DB’s Jim Reid concludes the overnight wrap

Hopes for a de-escalation between the US and Iran have continued to propel markets higher this morning, with Trump saying overnight that “I think it’s close to over.” So oil prices have remained steady, with Brent crude at $95.26/bbl, and the surge for risk assets has continued. Indeed, yesterday saw the S&P 500 (+1.18%) close just shy of its record high, meaning that the index is now up +9.8% over the last 10 sessions. For reference, that’s now even faster than the bounceback after Liberation Day last year, and we haven’t seen a run of gains that quick over 10 sessions since the post-Covid bounceback in April 2020. That optimism has continued overnight, with futures on the S&P 500 up +0.08%, and we’ve seen gains across Asian equities as well. For instance, the Nikkei (+0.82%), the KOSPI (+2.92%), the Hang Seng (+0.76%) and the CSI 300 (+0.17%) are all on track for a one-month high.

All that follows more positive headlines over the last 24 hours, which have led to mounting hopes that the US and Iran will be back at the negotiating table soon. Among others, Trump himself said yesterday to the New York Post that talks “could be happening over the next two days” in Pakistan. And that echoed a report from Reuters earlier in the day, which said that negotiating teams from the US and Iran could return to Islamabad this week, according to four sources. So there was a general sense that there was still a pathway towards de-escalation, and overnight, ABC’s Jonathan Karl also said that Trump told him “I think you’re going to be watching an amazing two days ahead”. Over on the Iranian side, there were also headlines suggesting they wanted a deal, with Bloomberg reporting that Iran was considering a short-term pause to shipping through the Strait of Hormuz, to avoid testing the US blockade and derailing any further peace talks.3

Nevertheless, that US blockade does remain in place, and US Central Command announced that 6 merchant ships were turned around and forced to re-enter an Iranian port during the first day of the US blockade. Overnight, the CENTCOM Commander also said that the blockade of Iran’s ports “has been fully implemented”, and that “U.S. forces have completely halted economic trade going into and out of Iran by sea”. But even with the Strait of Hormuz, investors were still hopeful about some kind of reopening, with the WSJ reporting last night that European countries were putting together plans for a coalition of countries to free up the Strait of Hormuz, which would include sending mine-clearing vessels.

Collectively, this newsflow has continued to support markets, as it’s eased investor fears about a stagflationary shock. Indeed, Brent crude oil has now closed beneath $100/bbl for over a week now, and yesterday it fell another -4.60% to $94.79/bbl. Moreover, investors continue to believe the conflict will be a temporary one, with the oil futures curve still having a sharp negative slope. For example, the 6-month Brent future was down -2.18% yesterday to $82.48/bbl, and the 12-month future was down -1.66% to $77.75/bbl.

Given all that, US markets put in a strong performance, as growing hopes for a ceasefire and lower oil prices helped to support bonds and equities. So the S&P 500 (+1.18%) closed just shy of its record high from late-January, having now risen for 9 of the last 10 sessions. That was powered by the Magnificent 7 (+5.49%), which saw its strongest performance in the last two weeks, although the small-cap Russell 2000 (+1.32%) also advanced. The hope of lower energy prices helped consumer cyclicals such as Media (+3.5%), Autos (+3.4%), and Consumer Discretionary Retail (+2.8%) to outperform, while Energy (-2.2%) and Banks (-0.9%) lagged. Meanwhile, there were further signs that the financial stress was easing more broadly, with the VIX index (-0.8pts) falling to just 18.36pts, its lowest since late-February, before the strikes began. In addition, US HY spreads (-11bps) fell to their tightest level in two months, at 268bps.

Over on the rates side, US Treasuries also rallied yesterday, with a further boost after the PPI inflation reading was softer than expected. It showed headline PPI was only up +0.5% in March (vs. +1.1% expected), meaning that the year-on-year measure only rose to +4.0% (vs. +4.6% expected). So that helped to ease fears about a larger wave of inflation, particularly after Friday’s CPI. And in turn, yields fell back across the curve yesterday, with the 2yr yield (-2.7bps) falling to 3.74%, whilst the 10yr yield (-4.5bps) fell to 4.25%. That was the lowest level on the 10yr yield since mid-March, and it’s down another -0.2bps overnight.

There was also some news on the Fed yesterday, as it was confirmed that Kevin Warsh’s nomination hearing to become Fed Chair would be held on Tuesday. So that’ll be a crucial moment for markets, as we’ll start to get a better understanding of Warsh’s policy views and where things might head over the years ahead. To date, the barrier to Warsh’s confirmation has been that Senator Thom Tillis, a retiring Republican senator on the Committee, has said he won’t support any Fed nominees until the Department of Justice probe into Chair Powell is resolved. But the committee chair Tim Scott said yesterday that “I believe that the DOJ will finish and wrap this up in the next several weeks”. The other outstanding question is whether Powell would stay on the Board of Governors once his term as Chair concludes, as his Board seat goes up until January 2028. So far, Powell hasn’t confirmed either way, only saying that he will remain on the Board while the investigation is ongoing. But in a scenario where the investigation has concluded, he hasn’t confirmed his intentions.

Staying with the US administration, Treasury Secretary Bessent said that the tariffs which were struck down by the Supreme Court could be restored to previous levels by mid-Summer. In remarks during a Wall Street Journal event, Bessent said “we will be implementing or conducting Section 301 studies, so the tariffs could be back in place at the previous level by beginning of July.” As a reminder, since the IEEPA tariffs were struck down, the administration have implemented a 10% global tariff, but that will expire on July 24 without congressional authorisation.

Earlier in Europe, markets also put in a strong performance, with the STOXX 600 (+0.99%) up to a one-month high. The main driver was the decline in oil prices, and we also heard from ECB President Lagarde, who said that the ECB didn’t have a tightening bias. So that combination helped to ease investor concerns about an imminent ECB rate hike, with market pricing for an April hike down to 28% by the close, having been at 42% the previous day. So that helped bonds to rally as well, with yields on 10yr bunds (-6.8bps), OATs (-9.1bps) and BTPs (-10.7bps) all moving lower.

Finally, the IMF published their latest World Economic Outlook yesterday, where they downgraded their global growth forecasts and upgraded inflation. So global growth is now seen at +3.1% this year, down two-tenths from January. The downgrades were biggest in the areas directly affected by the conflict, with the Middle East and Central Asia slashed by two points to +1.9%. Meanwhile on inflation, they now see global consumer prices up +4.4% this year, six-tenths above the January forecast.

Looking at the day ahead, central bank speakers include ECB President Lagarde, and the ECB’s Cipollone, Escriva, Villeroy and Schnabel, the Fed’s Barr and Bowman, and BoE Governor Bailey. Data releases include Euro Area industrial production for February. Finally, earnings releases include Bank of America and Morgan Stanley.

Summary

The Iran war is “very close to over” with authorities in Tehran eager to agree a peace deal, Trump says, adding: “We’ve beaten them militarily.”

AP/Bloomberg reporting the two sides have an “in principle agreement” to pursue further diplomacy; however, this is batted down as ‘unconfirmed’ by Tehran & a US official.

The Pentagon is sending thousands of additional troops into the Middle East in coming days: WaPo

Trump claims China “very happy” the US is permanently opening the Strait of Hormuz, also Xi told him Beijing was not sending weapons/defense items to Tehran.

Significant Lebanon fighting continues: Israel issues more evacuation orders, moving into south; Tehran outraged, threatens Red Sea shipping.

US x Iran permanent peace deal by April 30, 2026?
Yes 33% · No 68%
View full market & trade on Polymarket

*  *  *

‘Very Close’ To War Over, Diplomacy in Reach: Trump

The latest from Trump: The Iran war is “very close to over” with authorities in Tehran eager to agree a peace deal, President Trump claimed in a fresh interview broadcast Wednesday. “We’ve beaten them militarily, totally,” Trump told Fox Business in a prerecorded interview. “I think it’s close to over, I view it as very close to over… If I pulled up stakes right now it would take them 20 years to rebuild that country, and we’re not finished.” He added: “We’ll see what happens, I think they want to make a deal very badly.”

This as the Associated Press has reported the US and Iran are closer to extending a ceasefire and restarting negotiations, even amid the intensifying standoff over the Strait of Hormuz as the US Navy has blockaded it for all shipping leaving Iranian ports or with ties, or under sanction.

The two sides have an “in principle agreement” to pursue further diplomacy after last weekend’s failed Islamabad talks. Trump on Tuesday had optimistically cited that the next round could be just two days away. Mediators are said to be pushing for a compromise on outstanding issues including Hormuz and Iran’s nuclear program before the April 7 truce expires next week, the news agency said – as they also eye the extension off the initial two weeks.

IRAN’S TASNIM: US-SANCTIONED CONTAINER SHIP GOLBON PASSED THROUGH HORMUZ pic.twitter.com/Wtca8fTZ2b

— zerohedge (@zerohedge) April 15, 2026

However, Iran’s Foreign Ministry has made clear the reports about the ceasefire extension are not confirmed, while Axios’ Barak Ravid similarly writes – US official tells me: “The US has not agreed to an extension of the ceasefire. There is continued engagement between the U.S. and Iran to reach a deal.”

Iran meanwhile is warning that it sees a prolonging of the US blockade as “a prelude to a breach of the ceasefire,” a military spokesman said, as featured state TV. Iran’s military “will not permit any exports or imports to continue in the Persian Gulf, the Sea of Oman or the Red Sea” if it continues, the spokesman added. 

IRAN’S BAGHAEI: NO SPECIFIC DAY SET FOR NEW US NEGOTIATIONS

Via AP: A billboard depicting U.S. aircraft caught by Iranian armed forces in a fishing net.

Trump on China

President Trump says he asked his Chinese counterpart Xi Jinping not to supply weapons to Iran, and Xi replied he was not doing so. “I had heard that China’s giving weapons to, I mean – you’re seeing it all over the place – to Iran,” Trump also said in the aforementioned Fox Business interview.

“And I wrote him a letter asking him not to do that, and he wrote me a letter saying that essentially he’s not doing that.” Major media outlets previously reported that US intelligence indicated China was preparing to ship advanced weaponry to Iran. Beijing’s public rejection of the “baseless smear” – as the Foreign Minister called it – has indeed been swift and vehement.

With oil prices remaining elevated, with Brent crude trading about 33% higher than before the start of the war, Trump has issued a new Truth Social claiming China is “very happy that I am permanently opening the Strait of Hormuz.” This even though in many cases it is China bound tankers being blocked and turned back by the US naval armada. “This situation will never happen again,” Trump added. He is set to meet with Xi in Beijing on May 14-15. On this he wrote that “President Xi will give me a big, fat, hug when I get there in a few weeks. We are going working together smartly, and very well!” But then Trump says “But remember, we are very good at fighting, if we have to…”

More Troops Sent to Mideast

The Washington Post is out with a new report of more troops being sent to the theatre. “The Pentagon is sending thousands of additional troops into the Middle East in the coming days, as the Trump administration attempts to pressure Iran into a deal that could end the weeks long conflict there while considering the possibility of additional strikes or ground operations if a fragile ceasefire deal does not hold.”

Already a combined estimated ten thousand US sailors, Marines, and personnel – on at least a dozen US warships, are maintaining the Trump-ordered blockade on Hormuz. So Washington continues to try and build leverage, also with the announced additional forces being prepped, while also sounding optimistic on a potential peace deal – thought to two sides are very far apart especially on the nuclear issue.

Trump has at times still shrugged off the importance of a final peace deal, having told ABC News that while an official peace agreement may not be necessary, “I think a deal is preferable because then they can rebuild.” He had said, “They really do have a different regime now. No matter what, we took out the radicals.”

Trump:

I wrote a letter to Xi. I asked him not to give Iran weapons. He wrote me a letter, and he is saying that he is essentially not doing that. pic.twitter.com/yrTT9Dwi2V

— Clash Report (@clashreport) April 15, 2026

Tehran (& Houthis) Threaten Red Sea Trade as Lebanon Fighting Persists

Iran’s army warned it will block trade through the Red Sea, the Persian Gulf, and the Sea of Oman if the US naval blockade on Iranian ports continues. In a statement carried by Iranian state television, the head of the military’s central command center said the “powerful armed forces of the Islamic Republic will not allow any exports or imports to continue in the Persian Gulf, the Sea of Oman and the Red Sea.”

According to more via Al Jazeera, he added that Iran will “act decisively to defend its national sovereignty and its interests.” One key factor which has outraged Iran is Israel’s continued major attacks on Lebanon, after last Wednesday’s massive aerial attack on Beirut and elsewhere which left over 300 dead. Israel on Wednesday said that Hezbollah fired 40 rockets into Israel earlier in the morning.

An Israeli drone strike on the Jiyeh road, Lebanon

More Geopolitical Headlines

via Newsquawk…

Effort to extend US-Iran ceasefire has made progress, AP reports citing official; mediators aim to extend the ceasefire for at least another two weeks; both sides gave an “in principle agreement” to extend the ceasefire.
Discussions are underway regarding possible extension of temporary ceasefire between Iran and US, according to Arab diplomatic sources cited by Russia on Wednesday and being reported by Chinese press CCTV.
However, US President Trump said it could end either way, but thinks a deal is preferable because then Iran can rebuild, also said he isn’t thinking about extending the ceasefire and doesn’t think it will be necessary, according to reported citing ABC reporter on X.
The Pentagon is sending thousands of additional troops into the Middle East in the coming days, WaPo reports citing US officials; in a bid to pressure Iran while mulling the possibility of additional strikes or ground operations if the ceasefire breaks.
US President Trump said it’s “very possible” a deal with Iran will be reached by the time the King visits the US later this month (27-29th April), Sky News reported.
US President Trump said he views the war being very close to over, according to Fox News.
US VP Vance said we are negotiating with Iran and ceasefire is holding, adds Iranian negotiators wanted to make a deal.
Feel good about where we are.
Lot of mistrust between the US and Iran, can’t be solved overnight.
US Vice President JD Vance is expected to lead a potential second round of talks with Iranian officials should negotiations lead to another face-to-face meeting before the ceasefire expires next week, according to sources familiar cited by CNN.
Pakistan leadership’s overseas tour until April 18th dims prospects of US-Iran talks in Islamabad before April 18th, Pakistani journalist Mallick reported.
Iran is to use alternative ports to those in southern Iran to bypass the US blockade in the Strait, Mehr News reported.
An Iranian VLCC (Very Large Crude Carrier), which was on the US sanctions list, entered the waters of Iran past the US blockade, Fars reported.
Iran secretly acquired a Chinese spy satellite that gave the Islamic republic a powerful new capability to target US military bases across the Middle East during the recent war, according to an FT investigation.
US Central Command said blockade of Iranian ports has been fully implemented and that US forces have completely halted economic trade going into and out of Iran by sea.
US has intercepted eight Iran-linked oil tankers since the start of the blockade, according to WSJ.
New satellite images show Iran digging for missile launchers trapped underground amid a ceasefire, according to CNN.
More than 20 commercial ships have passed through the Strait of Hormuz in the past 24 hours, WSJ reported, citing US officials.
US destroyer interdicted two oil tankers that attempted to leave Iran on Tuesday, according to an official cited by Reuters.
US President Trump reiterates on Truth Social “NATO wasn’t there for us, and they won’t be there for us in the future!”.
Europe is accelerating a NATO fallback plan in case US President Trump pulls US out of the treaty, according to WSJ.
US Pentagon is likely to trim its Iran wall funding request, according to WSJ citing Senator Coons who is the top democrat on the Senate appropriations defense committee.

Nvidia unveiled the world’s first open-source AI models to accelerate the development of quantum computing. The news sent shares of several Asian software and cybersecurity firms soaring and sparked a rally in U.S.-listed quantum stocks in premarket trading.

Nvidia’s Ising open-model family is designed to improve two critical areas: quantum processor calibration and quantum error correction. Nvidia claims the models deliver calibration capabilities it describes as industry-leading, while its decoding tools operate 2.5 times faster and achieve up to 3x greater accuracy than traditional open-source approaches.

“AI is essential to making quantum computing practical,” Nvidia CEO Jensen Huang stated.

Jensen continued, “With Ising, AI becomes the control plane, the operating system of quantum machines, transforming fragile qubits into scalable and reliable quantum-GPU systems.”

In South Korea, shares of software and cybersecurity firms, including Axgate Co. and ICTK Co., jumped to the 30% daily trading limit. China’s GuoChuang Software Co. and QuantumCTek Co., along with Japan’s Fixstars Corp., rose at least 8%.

In the U.S., D-Wave Quantum Inc. (QBTS) rose 10%, while IonQ Inc. (IONQ) and Rigetti Computing Inc. (RGTI) climbed 5.9% following the Nvidia news.

Amid the hype in quantum stocks, Bloomberg Intelligence analyst Robert Lea reminded traders, “While these tools can potentially help accelerate developments, the deployment of practical, large-scale quantum computing remains a long way off.”

Authored by Naga Avan-Nomayo via TheBlock.co,

Tether, issuer of the world’s largest stablecoin USDT, is stepping further out from behind the rails with the launch of its self-custodial wallet, which it says is designed to put its payments infrastructure directly in the hands of users, rather than operating solely as a backend layer for crypto markets.

The application, dubbed tether.wallet, targets “billions of users left behind by the traditional financial system,” the firm said in a Tuesday announcement.

Tether stated that it also builds on a network that already reaches more than 570 million people globally.

Until now, that infrastructure has largely powered liquidity, settlement, and payments across crypto rather than serving as a direct consumer product.

The wallet focuses on a narrow set of assets. It supports digital dollars via USDT and USAT, tokenized gold through XAUT, and bitcoin –  a mix Tether says reflects “the only assets that truly matter for most of the people.”

Moreover, the product also strips out several long-standing friction points in crypto.

Users can send funds using human-readable identifiers, instead of wallet addresses. Tether CEO Paolo Ardoino said the aim is to make digital asset transfers “as easily as sending a message,” without intermediaries or loss of custody.

Transaction fees can be paid directly in the asset being transferred, removing the need for separate gas tokens.

Private keys remain fully user-controlled, with all transactions signed locally on-device, per the company’s statement.

Tether’s expansion

The launch extends a broader push by Tether to move up the stack from issuer and infrastructure provider toward consumer-facing products.

In recent months, the company has open-sourced its Wallet Development Kit to enable self-custodial wallets for both humans and AI agents, backed crypto wallet integrations in platforms like Rumble, and supported stablecoin payout systems through investments such as Whop.

That direction ties into Ardoino’s longer-term view that future financial activity will not be limited to humans.

He has previously argued that AI agents will require native, self-custodial wallets and will rely on bitcoin and stablecoins for machine-to-machine payments.

It appears tether.wallet is built on that same foundation.

The app runs on Tether’s open-source Wallet Development Kit, supporting transactions across humans, machines and AI systems, with support for networks including Ethereum, Polygon, Arbitrum, and Bitcoin’s Lightning Network.

Goldman’s Natasha de la Grense summed it up well this morning: “Money was waiting on the sidelines to buy luxury for a de-escalation play – that feels premature with three misses in three days.” 

Disappointments from Kering and Hermès, both of which fell short of analyst estimates, reinforced the view that the industry of fine wine, overpriced shirts, shoes, belts, and designer bags, is not yet out of the woods and sent the Goldman Sachs EU Luxury Goods Index (GSXELUXG) down more than 4%. 

Gucci’s turnaround appears to be faltering, with first-quarter revenue plunging 8% – nearly double the expected decline as the US-Iran conflict hit Middle East demand and tourism. 

The conflict started late in the first quarter, resulting in an 11% sales drop in the Middle East (about 5% of revenue) and shaving roughly 1 percentage point off Kering’s overall sales. 

Shares of Kering in Paris trade down as much as 10%, leaving them down about 16.5% on the year. 

Also in the luxury space, Hermès missed expectations in the first quarter, with sales up 5.6% at constant exchange rates versus the Bloomberg Consensus estimates of 7.44%. This miss sent shares in Paris spiraling down by 10%, leaving them down 23% on the year.

Hermès’ weakness was similar to Kering’s, largely due to the Middle East Conflict. Sales in the region fell 5.9%, while France declined 2.8%, as lower tourism spending weighed on results, particularly due to fewer Middle Eastern shoppers visiting stores across France, Switzerland, and the UK. Italy was also affected, but not as much.

Both earnings results add to mounting evidence that the war is hitting luxury demand more broadly.

Natasha at Goldman outlined six points of what her team learned today about luxury stock earnings: 

Taking a step back from this morning’s large share price moves in Luxury, what have we actually learnt from Q1 prints? Most companies are talking to a -100-150bps headwind in the quarter from events in the Middle East which is not too surprising but implies that underlying growth is still unexciting, particularly when you consider easier comps vs Q4. Areas of prior strength are still very solid (US, jewellery) and, on the positive side, the consumer is responding to leather newness in certain pockets. However, there is no real step change in the overall demand backdrop (aspirational remains weak) and so no reason to own this sector at large. Money was waiting on the sidelines to buy luxury for a de-escalation play – that feels premature with three misses in three days.

Hermes was the biggest surprise for me today. It seems this group’s exposure to tourism is higher than many of us had realised (>50% of sales in France), while wholesale was impacted by not just Travel Retail but also lower deliveries to concessions in the Middle East. On the positive side, space contribution will pick up through the year – Hermes didn’t say inventory had been held back ahead of store openings but did remind us Leather production can be lumpy, guiding for improved performance sequentially and reiterating FY guidance.

I still think the structural bear case on Hermes is overstated while waiting lists still exist and second hand bags are priced at a premium. And, with no change to outlook, consensus likely stays at 9% for FY26 – bang in line with the pre-covid average meaning this company is still “doing what it says on the tin”. That said, I appreciate there was nothing in the print to disprove the bears today. China is where we have heard most concern on the brand – largely due to second hand market headwinds (where there is more authentication, high supply and price premia have come down). To be fair, Hermes’ slight growth in China isn’t bad vs peers (Kering cluster down mid-teens, LVMH cluster flat) particularly considering the tougher comp. Bears also point to the non-Leather slowdown today as a sign of softer global brand momo – again this is hard to disprove, although they did flag on the call that RTW and shoes are quite geared to ME and tourism.

Meanwhile, I am less surprised by the move at Kering today. Unlike at Hermes, positioning was not short, and arguably the print raises more questions on FY delivery. Speaking with investors this morning, the main questions being raised are: 1) is the US improvement really a sign that the Gucci turnaround is working, or simply a function of macro (local wealth effects). Kering said that all brands improved in the US, with strength driven by higher end cohorts rather than this being broad based. In addition Gucci brand was down double digits in all other regions, suggesting global brand momo is still poor; 2) is FY26 guidance of top line growth across all brands achievable considering Gucci retail -9% in Q1, current trading for the group flat (consensus Q2 group +2%), ongoing conflict in the Middle East and a large store closure program; 3) was there a soft warning on margins in here? On the call, the CFO reiterated an “ambition” to grow margins but introduced the idea of stable margins even without growth.

Previously, investors told us they didn’t want to be short Kering ahead of the CMD but there is a growing view today that management will have to concede the top line recovery will be back-end loaded and, without top line, any margin story is hard to back. I’d still prefer to wait post CMD before putting on the short as I expect Mr de Meo will come across well once again and the headline on MT margins could sound good. Middle East would have been a credible reason to step away from top line guidance last night – the fact they didn’t arguably speaks to confidence in brand strategy presentations to come.

Bottom line: More earnings cuts for Luxury. It is still too early to go back to this sector with both limited visibility on how long conflict lasts and also likely knock-on impacts even after a ceasefire (rising inflation impacting aspirational demand recovery). Our flow has been better to sell in Luxury all year, driven by LOs. We think that investor base needs line of sight on a return to mid-single-digit growth before considering stepping back into this space.

GSXELUXG is down 4% this morning on dismal earnings from Kering and Hermès, and the index has been in an overall bear market since its 2025 peak. The index has traded sideways over the last five years.

Luxury was already under pressure before the conflict because of a tough economic backdrop, but the conflict in the Middle East made things a whole lot worse. The good news is that the US and Iran are agreeing to extend a truce, according to AP News, as talks of a peace deal appear promising.

Authored by Rex Widerstrom via The Epoch Times (emphasis ours),

While managing to avoid Australia’s under-16 social media ban, the global game creation platform Roblox has moved to introduce restricted accounts for children and teenagers.

A 7-year-old teenage boy looks at a photo screen with Roblox, a social media networking app that will not be age-restricted in Sydney, Australia on Dec. 7, 2025. George Chan/Getty Images

The move also comes in the wake of a lawsuit from Los Angeles County alleging it does not carry out adequate moderation and that its age-verification systems are not fit for purpose.

The suit claims that, as a result, young people were exposed to sexual content, exploitation, and online predators while playing the game.

It joined more than 60 other actions brought by players or their parents, the majority from families in the United States.

Roblox founder and CEO, David Baszucki, announced the changes online, saying an update to the platform will bring age checks, account-level defaults, content ratings, ongoing moderation, and expanded parental controls together into a “unified framework for younger users.”

“Based on our selection criteria, we believe age-checked users under 16 will have access to the vast majority of their favourite games at launch. Age-checked users 16 and older will not see any change to their Roblox experience,” Baszucki said.

With over 151 million active players every day, Roblox has become one of the most popular online platforms ever.

Users will now be sorted into one of three groups: Kids’ accounts (ages 5 to 8), Select accounts (ages 9 to 15) and those aged 16 and above, who will have access to the standard Roblox account.

Users between the ages of five and eight will be assigned to a Kid’s account by the platform’s systems, either based on a verified parent or its worldwide age-check technology, which includes facial recognition. They will be limited to games with a “minimal” or “mild” content maturity label, and communication will be disabled by default.

A screenshot of the different Roblox editions available depending on age group. Screenshot/Roblox website

Roblox Select accounts will be able to access games with content maturity labels up to and including “moderate” and chat room functions will be gradually introduced with safeguards, allowing them to chat with family and friends or those that are a similar age.

Each of the two new levels will have a distinct background colour across the app to indicate the account type.

Roblox Chief Safety Officer Matt Kaufman told GamesBeat that there should be coordination between platforms.

“There has to be some coordination, some minimum bar we expect all companies to clear when you involve kids and teens. The reality is, they’re just jumping from platform to platform. That’s normal. I have two kids who have grown up online. It’s just what they do.”

Despite the action against it in the United States, Roblox was not among the platforms Australia’s eSafety Commissioner said she would be investigating for potential non-compliance with Australia’s social media ban.

Those were Facebook, Instagram, Snapchat, TikTok and YouTube, all of which are currently restricted platforms under the law, which has now been in place for 4 months.

Government Welcomes Changes

Meanwhile, Australian Communications Minister Anika Wells welcomed the Roblox announcement. She has previously met with representatives of the platform and expressed concerns over graphic content and reports of grooming.

“We made it clear to Roblox that something had to be done,” she told journalists, “and I welcome these steps towards stronger safety measures on their platform for under-16s, not just in Australia, but globally. Kids should be able to play their favourite games without being exposed to harmful content.

“We will closely watch the rollout of Roblox’s changes to make sure they create a meaningful difference to the experience of young Australians on their platforms.”

She dismissed concerns that young people have continued to circumvent the restrictions—including by reportedly drawing on facial hair—saying it’s no surprise.

“There isn’t 100 percent effectiveness for the law against murdering people in this country; people still murder [yet] no one is making an argument that we shouldn’t have a law against murdering people in this country,” she said.

“We’ve always said cultural change takes time, and we will not get a 100 percent strike rate, or anything like it, for any amount of time shortly after the ban comes in.

“The law is important because it sets a cultural standard.”

This is quite the ambitious headline revealing the latest ‘plan’ for Hormuz to come out of Europe, as it sits on the sidelines watching the US get potentially bogged down in the region following a month of heavy airstrikes on Iran: Europe drafts postwar plan to free up Strait of Hormuz without US, WSJ reports.

This is apparently a plan for after the main crisis is over, amid the strait still being blockaded (with the each warring side insisting it is they in control of the strategic chokepoint waterway). It seems the main idea is to eventually take the United States out of the equation, allowing only for the ‘neutral’ countries to free up and clean the Hormuz Strait.

Both the Iranians & Americans still step aside & tiny French warships will move in?

But the whole thing is very strange – on the one hand, it purports to keep one of the key belligerents, namely the United States, at bay – while on the other envisioning European/NATO military ships engaged in freedom navigation operations, including some mine-clearing.

For example, there is this line from the Journal report: “French President Emmanuel Macron said Tuesday the plan is for an international defensive mission that doesn’t include the ‘belligerent’ parties, meaning the US, Israel and Iran. European diplomats familiar with the plan say European ships wouldn’t be under American command.”

According to a Newsquawk summary of the WSJ main highlights: 

—European countries are putting together a plan for a broad coalition of countries to help free up shipping through the Strait of Hormuz, including sending mine-clearing and other military vessels. But the plan would only come after the war and may exclude the US.

—Some differences must still be worked: French diplomats think that any US involvement in the operation would make it less palatable to Tehran, while British officials worry that not including the Americans will anger Trump and limit the operation’s scope.

—The plan has three broad aims:

1) put logistics in place to ensure the hundreds of ships currently stuck in the strait can leave.

2) Employ a major demining operation to clear the way for a far larger number of ships to use a broader part of the strait.

3) Removing Iranian mines in Hormuz is crucial to getting ships going again.

The reality is that this supposed plan brings things back full circle to problem #1... as it’s not as if either Iran, or the United States, will simply shrug and cede control so that a European military coalition can step in and take over.

Which side will ever actually agree to this? The obvious answer, at least for the time being and foreseeable future is… nobody.

And then there’s the question of what leverage or force will Europe employ to assert its military presence in the strait in order to keep all parties in line… some mere harsh language and strong words?

Authored by Mrigakshi Dixit via Interesting Engineering,

The UK’s new nuclear approval at Wylfa officially kicks off what the government calls a “golden age” for the nation’s energy sector.

Depiction of Rolls-Royce SMR site at Wylfa on Anglesey, North Wales.

On April 13, the government approved the development of three Small Modular Reactors (SMRs) at the Wylfa site on Anglesey, North Wales. 

This project, a partnership between Rolls-Royce SMR and Great British Energy – Nuclear, aims to advance domestic, low-carbon energy technology.

The BBC reported that the three units have a total output capable of powering approximately 3 million homes for over 60 years.

If all goes to plan, the first “Made in Britain” SMRs could begin feeding the National Grid in the 2030s. 

“This is a critical milestone for Rolls-Royce SMR, for Rolls-Royce and for the UK as the Government looks to realize its ambition of a ‘golden age’ of new nuclear,” said Tufan Erginbilgic, CEO, Rolls-Royce, on April 13.

Reviving Wylfa

Last November, Prime Minister Sir Keir Starmer confirmed that the coastline of Ynys Môn (Anglesey) would become the official home for three of the UK’s first small modular reactors.

Through a £2.5 billion partnership, the site is being transformed into a high-tech energy hub.

The original Wylfa power station, once Britain’s oldest nuclear plant, concluded 44 years of operations in 2015, having reached the end of its natural lifespan.

The site’s closure was driven by the aging infrastructure of the 1960s-era reactors and the 2008 cessation of the specific fuel production required to run them. 

Although initial replacement plans were abandoned in 2021, the site is now entering a new chapter following the 2024 proposals to revitalize the location as a modern energy hub.

The Rolls-Royce SMR is a 470 MWe pressurized water reactor designed to provide reliable baseload power for at least 60 years. Each unit has a compact footprint of approximately 16 meters by 4 meters. 

According to a World Nuclear News report, the modular design allows 90% of the unit to be manufactured off-site. 

Moving the bulk of the work off-site limits local disruption and ensures a much faster, more predictable construction timeline.

Rolls-Royce SMR chief Chris Cholerton pointed to the project as a clear win for domestic innovation, proving the UK can build its own path to energy security.

UK’s energy independence

The push for energy independence has become a mantra for the UK government. By building locally, the UK aims to insulate itself from global price spikes while meeting its aggressive net-zero targets.

To further the UK’s nuclear ambitions, a £599 million commitment from the National Wealth Fund has been allocated to support the engineering and rollout of these reactors.

The project is a massive engine for employment. Officials estimate it will create 8,000 new jobs. While 3,000 of these roles will be rooted locally in Anglesey, another 5,000 will be spread across the national supply chain.

Industry leaders have hailed the decision as a “historic step” in Welsh industrial growth, positioning the site as the launchpad for Britain’s first fleet of small modular reactors. 

Wylfa has seen false starts before. A previous plan for a large-scale plant was scrapped in 2021, leaving the local community in limbo. While site work begins immediately, a final investment decision isn’t expected until the turn of the decade.

The goal is to clear all planning and regulatory hurdles so the reactors are operational during the 2030s. 

This timeline ensures that once the financial and legal frameworks are settled, the site can begin contributing to the energy grid within the next decade.