The weekend was first marked by the crash of an F-15 in Iran on Friday, and the race against time to locate the two pilots who managed to eject. While the first was rescued quickly, the search for the second took considerably longer. But it all ended well. Donald Trump announced on Sunday morning that the second pilot had been recovered and that no Americans had been killed in the rescue operations. For the US military, it is a genuine operational success that once again demonstrates its superiority. Donald Trump was quick to underline the point, but it is also fair to say that he has come through this well himself. The story this morning would have looked very different had the pilot been captured by Iran.

Alongside that dramatic episode, Donald Trump has put another ultimatum back on the table. On Saturday, he gave Iran 48 hours to reach an agreement or reopen the Strait of Hormuz, failing which strikes would target energy infrastructure. On Sunday, he pushed that deadline back to this evening. Yesterday, during a rather combative press conference, Trump reiterated his ultimatum, saying in his characteristically colourful language that "the entire country could be wiped out in a single night". His remarks did not add much in the way of new information, but they did allow for a few of the tangential flourishes for which the US president is well known. He even wrapped up by reminding his audience that he remains interested in Greenland. None of that was enough to move Wall Street, which was open yesterday. US indices ended the session slightly higher. The VIX volatility index remains in a zone of stress.

Markets have reacted only modestly because the situation could shift dramatically in the coming hours. A major escalation is possible, but so too is a diplomatic breakthrough. Axios reported over the weekend that talks on a 45-day ceasefire were under way. But Iran is said to have responded with a ten-point "maximalist" peace plan, which would make the chances of an agreement by this evening more remote. There is still a great deal of conditional language in all this, but that is standard when navigating between Donald Trump's outbursts and Iran's deliberately provocative counter-proposals.

On the macro front, investors digested Friday's US employment figures. They were rather unexpected: 178,000 jobs were created in March, against a consensus forecast of 65,000. The unemployment rate edged back down to 4.3%, versus expectations of 4.4%. This surprise is perhaps partly a correction after the previous month. In February, the report had shown 92,000 job losses, but it was also distorted by negative technical factors such as strikes and weather conditions. There is still a great deal of volatility in these figures, but they remain broadly reassuring. There is no immediate risk on the jobs front. The Fed is therefore comfortable maintaining its wait-and-see stance while it seeks greater clarity on the inflationary effects of the energy shock. The next key data point for investors will in fact be March CPI, due on Friday. Inflation is expected to move back above 3%.

Oil remains relatively stable, but elevated, at around USD 110 a barrel. OPEC countries announced on Sunday an increase in their production quotas of 206,000 barrels a day from May onwards. That announcement needs to be kept in perspective, since in practice several million barrels a day from Gulf producers are currently missing from the market. Even so, it is still a signal to the market. The other positive sign is that several cargo vessels have passed through the Strait of Hormuz in recent days. Traffic is now at its highest level since the conflict began, according to Bloomberg. Even though we remain a long way from anything resembling normal conditions.

The other developments not to miss after the long weekend:

  • The finance ministers of Germany, Austria, Spain, Italy and Portugal are advocating the creation of an exceptional tax on the profits of oil and gas companies to offset rising prices.
  • The 100% surtaxes on medicines decided by Donald Trump do not apply to countries that already have agreements in place, particularly the EU and Switzerland.
  • Lawmakers from both sides in the United States are proposing tighter restrictions on exports to China of equipment used in semiconductor manufacturing.
  • On the macro calendar, there is a heavy flow of US data this week: durable goods orders today, minutes from the latest Fed meeting on Wednesday, household income and spending together with PCE inflation on Thursday, and core inflation on Friday. China will also publish its annual inflation data overnight from Thursday to Friday.
  • On the corporate calendar, this week remains quiet, with activity set to pick up the following week.

Across Asia-Pacific, markets are mixed this morning. Japan and India are down modestly. South Korea is managing to add 0.3%, while Australia and Taiwan are up more than 1.5%. The Hong Kong market is closed for several more days for Easter and will not reopen until tomorrow morning. Leading indicators point to a slight rise at the open in Europe, even though US futures are in negative territory.

Today's economic highlights:

See the full calendar here.

  • GBP / USD: US$1.32
  • Gold: US$4,639.37
  • Crude Oil (BRENT): US$111.06
  • United States 10 years: 4.35%
  • BITCOIN: US$68,612.3

In corporate news:

  • JetBlue and Barclays updated the JetBlue Premier World Elite Mastercard with new spending incentives and travel benefits.
  • Madison Air announced plans for a U.S. IPO targeting a valuation of up to $13.2 billion.
  • BP Plc is urging its shareholders to approve changes to its climate reporting. ISS recommends voting against the proposal.
  • Iberdrola is launching a program worth over €13.7 billion to modernize the Scottish grid.
  • Italy is set to appoint the new CEO of Leonardo as early as this week, according to Bloomberg. Alessandro Ercolani and Stefano Donnarumma are among the favorites.
  • U.S. lawmakers are reportedly seeking to limit China’s access to chip manufacturing equipment, which would be bad news for ASML and its peers.
  • Siemens AG is halving its stake in Siemens Energy, reducing it to 5.5%.
  • Alcon is launching its new intraocular lens in the United States.
  • Stadler Rail is withdrawing its appeal against the awarding of a contract to Siemens.
  • Seadrill announced the extension of the West Polaris contract in Brazil.
  • OpenAI, Anthropic, and Google are reportedly collaborating to try to curb Chinese competitors, according to Bloomberg.
  • Microsoft has committed to investing $10 billion to strengthen its AI and cybersecurity capabilities in Japan.
  • Apple’s foldable iPhone is facing technical hurdles, and delivery delays are possible, according to Nikkei Asia.
  • Tesla has ambitions in Japan.
  • Broadcom and Google have signed an agreement to supply TPUs and network solutions through 2031.
  • Amazon has reached a delivery agreement with the U.S. Postal Service, according to the WSJ.
  • Elbit Systems has secured a $750 million contract to supply rocket launchers to Greece.
  • CrowdStrike is ramping up its $500 million share buyback plan.
  • Neurocrine Biosciences is set to acquire Soleno Therapeutics for $2.9 billion.
  • The restart of Three Mile Island is being held up by delays in power transmission projects, according to Constellation Energy.
  • OpenAI’s CFO has expressed doubts about the viability of an IPO in 2026.
  • SpaceX is reportedly in talks with the Saudi sovereign wealth fund PIF for a $5 billion investment during its IPO, according to Reuters.

See more news from UK listed companies here

Analyst Recommendations:

  • Pets At Home Group Plc: RBC Capital maintains its underperform recommendation and reduces the target price from GBX 195 to GBX 170.
  • Ashmore Group Plc: Morgan Stanley maintains its underweight recommendation and reduces the target price from GBX 208 to GBX 193.
  • Jupiter Fund Management Plc: Morgan Stanley maintains its equalwt recommendation and reduces the target price from GBX 189 to GBX 170.
  • Man Group Plc: Morgan Stanley maintains its equalwt recommendation and reduces the target price from GBX 291 to GBX 270.
  • Intercontinental Hotels Group Plc: UBS maintains its neutral recommendation and reduces the target price from GBX 150.50 to GBX 150.
  • Whitbread Plc: UBS maintains its buy recommendation and reduces the target price from GBX 3605 to GBX 3575.
  • Molten Ventures Vct Plc: JP Morgan maintains its overweight recommendation and reduces the target price from GBP 63 to GBP 59.
  • Fresnillo Plc: JP Morgan maintains its overweight recommendation and reduces the target price from GBP 55 to GBP 54.
  • Hochschild Mining Plc: JP Morgan maintains its overweight recommendation and reduces the target price from GBP 9.90 to GBP 9.50.
  • The Berkeley Group Holdings Plc: Jefferies maintains its buy recommendation and reduces the target price from GBX 5093 to GBX 4598.