EMEA Morning Briefing : Global Bond Rout Eases

MARKET WRAPS

Watch For:

Flash PMI data for eurozone, U.K., France, Germany; EU consumer confidence index; trading updates from Easyjet, Generali, BT Group, Pepco Group, Valterra Platinum, Tate & Lyle, ConvaTec, ICG, LondonMetric Property

Opening Call:

European stock futures were mixed, in tandem with mixed trading in Asian stock benchmarks. U.S. Treasurys edged lower; the dollar strengthened. Gold and oil rose.

Equities:

European equity futures were mixed early Thursday as traders digest U.S.-Iran talks. President Trump said negotiations with Iran were advancing, spurring hopes of a deal to end the conflict.

Meanwhile, three tankers passed through the Strait of Hormuz, a key waterway through which one-fifth of the world's oil is typically transported, which facilitated Wednesday's decline in crude oil prices and bolstered market sentiment.

The global bond selloff is taking a breather as investors latch onto hopeful signs that oil could begin flowing again through the Strait of Hormuz, potentially easing inflation pressures.

Forex:

The U.S. dollar gained. U.S. President Trump told reporters that talks with Iran were in their "final stages."

However, "Iran was reportedly still reviewing the text of any proposed agreement and had not yet formally responded as of Wednesday evening," MUFG Bank's Michael Wan said. This leaves the "durability of the rally [in some markets] the central question for today's session," the senior currency analyst added.

Bonds:

Yields on government bonds ticked lower, though they remain elevated.

Inflation fears as a result of recent surging oil prices and dimming prospects of the Federal Reserve cutting interest rates have left Treasurys more vulnerable to bouts of selling that have sent their yields higher.

U.S. Treasurys have seen their traditional safe-haven status fade since the onset of the U.S.-Iran conflict, said Greg Gizzi, head of fixed income and municipal bonds at Nomura Asset Management International.

Energy:

Oil futures rose early Thursday on a likely technical recovery after the futures posted back-to-back losses overnight. The decline in oil futures came as President Trump said the U.S. is in the "final stages" of negotiating a peace deal with Iran, analysts said. This "may result in the Strait of Hormuz being re-opened," CBA's Vivek Dhar said.

"Risks are skewed to the downside largely because of the net long future positions taken on oil and refined products," the analyst said.

Metals:

Gold gained, but may be weighed by the still high U.S. Treasury yields, which typically diminish the allure of the non-yielding asset.

"Gold performance is anticipated to remain primarily a function of yield trajectories, which may limit meaningful upside in the near term absent a clear downshift in rates," DBS Group Research's Sherilyn Chew said.

"ETF holdings and speculative positioning are relatively light, with investors largely on the sidelines amid skepticism over near-term upside, " the multi-asset strategist added.

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Copper gained. Market sentiment is being supported by a strong rally in Chinese stock markets, driven by computer chip manufacturers, ANZ Research analysts said. "This raised hopes that demand for metals emanating from the [artificial intelligence] investment boom would be boosted," they said.

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Iron ore futures were lower. The supply and demand of iron ore look balanced for now, Nanhua Futures analysts said. However, the upside was limited as valuations are relatively high. Market sentiment for commodities remains soft overall, weighed by limited prospects of policy easing in China in the near term, they said.

TODAY'S TOP HEADLINES

The Furious Chip Rally Was Petering Out. Now Wall Street Turns to Nvidia.

The massive gains in chip manufacturers from South Korea to Silicon Valley have hit a volatile stretch.

Chip makers, including Intel, Micron and AMD, closed Monday on their worst two-session skid since March, an abrupt halt to a torrid weekslong rally. Yet they were back on the rise Wednesday, after signs of progress in reopening the Strait of Hormuz sparked a broad rally that lifted the Dow Jones Industrial Average, S&P 500 and Nasdaq composite by more than 1% each.

Trump, Netanyahu Hold Testy Call Over Iran

President Trump and Israeli Prime Minister Benjamin Netanyahu held a contentious call Tuesday evening, people familiar with the matter said, with Netanyahu railing against a pact to end the war with Iran and Trump defending the diplomatic process.

Israel has long expressed skepticism that Iran would abide by any agreement to dismantle its nuclear work and refrain from attacks on regional nations. Netanyahu reiterated those points with Trump in the Tuesday call and an earlier one on Sunday, the people said.

Nvidia Rides Blistering Chip Sales to Another Record Quarter

Chip giant Nvidia reported record sales and income Wednesday, driven by surging demand for data-center computing and the astronomical rise of artificial-intelligence agents.

Sales for the April quarter reached $81.6 billion, up 85% from the year-earlier period and beating the $78.9 billion that analysts polled by FactSet had forecast by 3.4%. Net income was $58.3 billion for the quarter, more than three times the year-earlier result and 36.5% higher than the $42.9 billion analysts had predicted.

Mind-Blowing Growth Is About to Propel Anthropic Into Its First Profitable Quarter

Anthropic's revenue is set to more than double to $10.9 billion in the second quarter, an explosive rate of growth that will help it turn an operating profit for the first time.

The company disclosed the figures to investors as part of an ongoing funding round that is likely to push its valuation above OpenAI's. The projections, which were reviewed by The Wall Street Journal, provide a window into the meteoric rise of a startup that was once a laggard in the artificial-intelligence race, and defy the conventional wisdom that AI companies' huge spending needs hamper near-term profitability.

SpaceX Fires Starting Gun on Its Blockbuster IPO

The clock is officially ticking on SpaceX's huge stock offering.

SpaceX on Wednesday revealed new details about its financials and how Chief Executive Elon Musk will try to grow a sprawling enterprise dedicated to advancing cutting-edge technologies in space and back on Earth.

OpenAI Is Preparing to File for an IPO Very Soon

ChatGPT-maker OpenAI has been working with bankers to prepare to file for an initial public offering in the coming days or weeks, according to people familiar with the matter.

Bankers at firms including Goldman Sachs and Morgan Stanley have been helping the artificial-intelligence giant on a draft IPO prospectus it plans to file confidentially with regulators soon, possibly as early as Friday, some of the people said.

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Expected Major Events for Thursday

04:30/NED: Apr Unemployment

04:30/NED: May Consumer confidence survey

06:00/DEN: May Consumer expectations

06:00/NOR: Apr Labour force survey SA, incl unemployment

06:00/SWE: Apr Labour Force Survey

06:30/SWI: 1Q Industrial production

06:30/POR: Mar Balance of Payments

07:00/SPN: Mar Industrial Orders & Turnover

07:15/FRA: May France Flash PMI

07:30/GER: May Germany Flash PMI

08:00/EU: Mar Euro area balance of payments

08:00/BUL: 1Q Labour force survey

08:00/POL: Apr Average gross wages

08:00/POL: Apr PPI

08:00/POL: Apr Industrial Production Index

08:00/EU: May Eurozone Flash PMI

08:30/UK: 1Q Mortgage and landlord possession statistics

08:30/UK: May Flash UK PMI

09:00/EU: Mar Construction output

09:00/ITA: Mar Balance of Payments

10:00/UK: May CBI Industrial Trends Survey

10:00/FRA: 1Q OECD Quarterly National Accounts: GDP growth

10:00/IRL: 1Q Labour Force Survey

14:00/EU: May FCCI Flash Consumer Confidence Indicator

17:59/POR: Mar ICSG Copper Report

23:01/UK: May UK Consumer Confidence Survey

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

05-21-26 0015ET