Global equities advanced and currency markets reflected a softer dollar on bets the conflict in the Middle East could be approaching a pause, with investors pushing risk assets higher in early trade.
U.S. President Donald Trump posted on Truth Social that direct talks between Israel and Lebanon "will happen tomorrow", a development that traders interpreted as a sign of possible de-escalation. That sentiment helped send the MSCI All-Country World Index 0.3% higher to an all-time peak late in Asian trade.
Regional moves were pronounced. The MSCI gauge of Asia-Pacific shares outside Japan rose 1.2%, while the Nikkei 225 climbed 2.2% to a fresh record. S&P 500 e-mini futures were trading up 0.2% as U.S. markets prepared to follow. In early European sessions, pan-region futures were up 0.3%, German DAX futures nudged up 0.2% and FTSE futures were 0.1% higher.
Catalyzing the risk-on tone, Chinese equities gained 0.9% and the yuan held steady in offshore trading in Hong Kong after data showed Asia’s largest economy grew 5.0% in the first quarter compared with a year earlier. That outturn exceeded analysts’ expectations and supported regional risk appetite even as policymakers continued to monitor fallout from the Iran war.
Market attention was also on Taiwan Semiconductor Manufacturing Co., a bellwether for the AI and advanced semiconductor complex. TSMC is set to report quarterly results later on Thursday, with consensus expectations pointing to a roughly 50% surge in net profit as demand for its advanced chips remains robust.
Currency traders pushed the U.S. dollar lower for a ninth consecutive day, with the U.S. dollar index down 0.1% as geopolitical worries eased and market participants brought forward expectations of eventual monetary easing from the Federal Reserve.
Political tension between the White House and the Federal Reserve emerged as another market variable. On Wednesday, Trump threatened to fire Fed Chair Jerome Powell from his separate seat on the U.S. central bank’s Board of Governors if Powell does not vacate that post as well when his term as Fed chief ends on May 15. That intensifying standoff has disrupted the Fed’s normally seamless transition of leadership and revived concerns about central bank independence.
Markets also took note of generational change in emerging markets investing after the death of Mark Mobius on Wednesday at the age of 89. The veteran investor remained active in public commentary as recently as January, when he discussed the potential for fresh opportunities in Venezuela should leadership change materialize.
Events and data likely to influence markets on Thursday include:
- Corporate earnings: TSMC, Netflix, PepsiCo, Tesco and Schroders are due to report.
- Economic releases: UK data covering a GDP estimate, services, industrial output, manufacturing output and the goods trade balance for February; the euro zone final HICP for March.
- Debt auctions: France is offering 3-year, 5-year, 6-year, 7-year, 12-year, 13-year, 17-year and 27-year government debt; the UK has a 23-year government debt sale scheduled.
Whether the market rally continues will depend on follow-through in diplomatic developments, incoming economic data and corporate results. For traders and investors, scheduled earnings from technology and consumer staples names, alongside major debt auctions and key macro prints from the UK and the euro zone, will provide the next set of market-moving information.
If current momentum holds, it will test the durability of the recent dollar weakness and influence cross-asset positioning across equities, currencies and sovereign debt markets.
See the trade on TSM, but couldn’t pull the trigger? Most traders can read a chart. The hard part is the moment: entry window open, pattern forming, and you're still waiting for more confirmation. That's the conviction gap - and our chart analysis closes it. Unlike other AIs that just read data, our Vision AI literally "sees" your charts and hands you a complete trading plan: entry, stop-loss, and profit target in under 60 seconds. Know exactly what to do next, every time. Try Chart Analysis for TSM