The United States is gearing up for a push into the Far East. Not literally, of course, since it would first need to finish what it started in the Middle East before turning its attention further afield. Donald Trump is due in China on Thursday and Friday for a summit with his counterpart Xi Jinping. He will be bringing several influential American chief executives along for the ride. Before that, Scott Bessent, his Treasury Secretary, will have visited Japan and South Korea. Bessent is the grown-up in the White House economics classroom. His trip to Japan is no footnote: the United States is pressing for the yen to weaken against the dollar, while openly backing higher Japanese interest rates. Last week we published a piece explaining why Washington is paying such close attention to Japan. Bessent will then fly on to South Korea, where he is due to meet Chinese Vice-Premier He Lifeng tomorrow, ahead of the meeting between their two bosses.

This Asian flurry comes as Donald Trump looks badly weakened on the domestic front, where Americans are struggling to stomach the fallout from the Iranian quagmire, especially on prices. No one in the White House has forgotten what runaway inflation cost the Democrats. With the midterms only a few months away, Republican candidates are appalled by the way events are unfolding. The White House message that "things will get worse before they get better" is no longer landing. "By the time things get better, I'll have lost my seat," is the response from the party's rank and file. That is why Donald Trump has been forced to consider emergency measures that run against his instincts. The United States will cut tariffs on beef imports. The President has also floated a 90-day suspension of the petrol tax, to soften the blow from a 40% rise in fuel prices over the past year. These are symbolic steps designed to deliver a quick, visible boost to household purchasing power, but they remain temporary. Until the situation in Hormuz changes, there will be no lasting relief in oil prices.

On that front, the news from Iran is not encouraging. Tehran's response to Washington's peace plan is a "bunch of nonsense", according to Donald Trump, who says he has "not even finished reading it". The President warned that the ceasefire deal is "on massive life support". In this poker game, it is always hard to tell what is real and what is bluff. The VIX volatility index has ticked up and Brent crude is holding above $100 a barrel, suggesting that professional forecasters are less optimistic than they were the day before.

While the oil shock is doing economic damage in the United States, Europe and elsewhere, equity markets are still holding up remarkably well. The unstoppable Nasdaq, powered by AI stocks, keeps setting records, with roughly one down session for every four up days since the start of April. The standout move is Sandisk, up 552% since 1 January. There was a time when technology analysts saw memory-chip makers as the semiconductor industry's problem children. They have had to think again. Artificial intelligence continues to call the shots in the market. In South Korea, it has almost become a national cause: overnight, the authorities suggested that part of the tax revenue generated by the AI boom, reflected in the explosive rallies of several local companies including Samsung Electronics and SK Hynix, would be handed back to citizens. The announcement raised a few eyebrows, even though the idea of a one-off tax on profits was ruled out.

Korea's political and economic euphoria stands in sharp contrast to Britain's gloom. Prime Minister Keir Starmer is under siege from all sides. A large number of MPs, along with his own Home Secretary, have urged him to think about a succession plan. One MP seen as close to Starmer told Bloomberg that the question is not whether he will go, but when.

In Europe, stockmarket indices are struggling to keep pace with Wall Street's blistering run. The Stoxx Europe 600 is up 3.5% since 1 January, but it has been left behind by the recent US acceleration. The Nasdaq 100 is now up 16.1% in 2026. To put that in context, the Stoxx Europe 600 was up 7% on 27 February, while the Nasdaq 100 was down 1%. The reversal has been spectacular.

In Asia-Pacific this morning, the South Korean market was all over the place for the reasons already mentioned. The KOSPI eventually fell 2.3%. India and Australia continued to lose ground, down 1.1% and 0.4% respectively. Hong Kong edged up 0.1% and Tokyo gained 0.3%. Investors hardly know where to look, caught between the brainless rally in US equities and global tensions. Europe is expected to open lower, with the deadlock in Iran weighing more heavily than AI's promises.

Today's economic highlights:

Today's agenda includes: NAB Business Confidence in Australia; Industrial Production in Italy; the ZEW Economic Sentiment Index for the Euro Area and Germany; In the United States, speeches by Fed's Williams and Goolsbee, monthly and yearly inflation rates, CPI, the monthly budget statement, and the API Crude Oil Stock Change. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$4,713.74
  • Crude Oil (BRENT): US$105.2
  • United States 10 years: 4.42%
  • BITCOIN: US$81,203.7

In corporate news:

  • ThyssenKrupp has lowered its revenue forecast.
  • Hochtief has announced a decline in its net profit for Q1 despite an increase in revenue.
  • Palliser has acquired a stake in Intertek, a potential target for EQT, according to Bloomberg.
  • Moody's has upgraded Telecom Italia's rating to Ba1, with a stable outlook.
  • Safilo signs an agreement to acquire Spy+ and Serengeti from Bollé Brands.
  • Lifco acquires a majority stake in UK-based Glass Umbrella.
  • Bavarian Nordic announces that the US government has exercised an option for freeze-dried smallpox vaccines.
  • The White House has invited the CEOs of Tesla, Apple, Meta and Boeing to China, but not Jensen Huang of Nvidia.
  • OpenAI is expected to save $97 billion by 2030 thanks to its latest deal with Microsoft, according to The Information.
  • Simon Property has raised its forecasts.
  • General Motors is set to cut hundreds of executive roles to reduce costs, according to Bloomberg.
  • ServiceNow is planning to raise $4 billion through a bond issue, according to Bloomberg.
  • Google and Apple are rolling out RCS encryption to secure communications between Android and iPhone.
  • Johnson Controls is strengthening its presence in Europe with the opening of new centres in Denmark.
  • Netflix is being sued by Texas for alleged spying and collecting data without consent.
  • AI chipmaker Cerebras could raise up to $5.5 billion in an IPO that has been scaled up.
  • Today's key earnings releases: Constellation Software, Power Corporation of Canada, Siemens Energy, KBC Group, Bayer, Vodafone, Imperial Brands, EnBW, Uniper, HAL Trust…

See more news from UK listed companies here

Analyst Recommendations:

  • Chesnara Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 339 to GBX 373.
  • Shell Plc: Berenberg maintains its buy recommendation and reduces the target price from EUR 47 to EUR 46.
  • Wh Smith Plc: Berenberg maintains its hold recommendation and reduces the target price from GBX 634 to GBX 574.
  • Helios Towers Plc: Peel Hunt initiates a buy recommendation with a target price of GBX 290.
  • Trustpilot Group Plc: Morgan Stanley downgrades to market weight from overweight with a price target raised from GBX 265 to GBX 275.
  • Burford Capital Limited: Deutsche Bank downgrades to hold from buy and reduces the target price from USD 7 to USD 5.
  • Icg Plc: UBS maintains its neutral recommendation and reduces the target price from GBX 2250 to GBX 2150.
  • Stellantis N.v.: Goldman Sachs maintains its neutral recommendation and reduces the target price from EUR 7 to EUR 6.
  • Sig: Berenberg maintains its hold recommendation and raises the target price from CHF 9.50 to CHF 13.
  • Commerzbank Ag: DZ Bank AG Research upgrades to buy from hold with a price target raised from EUR 34 to EUR 42.
  • Leonardo S.p.a.: DZ Bank AG Research maintains its buy recommendation and reduces the target price from EUR 72 to EUR 70.
  • Hannover Re: RBC Capital maintains its sector perform recommendation and reduces the target price from EUR 280 to EUR 270.
  • Banco Santander, S.a.: RBC Capital maintains its outperform recommendation and raises the target price from EUR 12.50 to EUR 12.75.