Global markets are trading on a positive trend following US President Donald Trump's announcement that a deal with Iran will be finalized in the coming days, saying the Iranian side approved the agreement, and it will be signed within a few days, fueling hopes that the conflict could be resolved soon.
The Iranian press reported no draft agreement for a potential deal with the US was approved by Tehran yet.
Despite conflicting reports about peace in the region, optimism that tensions would end peacefully triggered sharp movements in oil and the bond market.
The US 10-Year Treasury yield fell around 10 basis points to 4.47% on Thursday.
Investors want to see concrete developments in the region, remaining optimistic but cautious despite Trump’s decisive tone in statements, analysts say.
Money market estimates shifted away from the certainty that the Fed would hike rates once by the end of the year, but the bank is still expected to raise its policy rate by 25 basis points at its December meeting with a 77% probability.
The US Producer Price Index (PPI) rose 1.1% month-on-month and 6.5% on an annual basis in May, above estimates, showing that rising energy costs continued driving up producer inflation.
The continued rise in the PPI indicated that inflationary pressures could intensify in the near term.
Some assessments show that the growing adoption of artificial intelligence (AI) in business models could lead to downward pressure on costs by boosting efficiency in companies.
Meanwhile, initial public offerings (IPOs) by major US firms have come to the fore.
SpaceX, founded by American billionaire Elon Musk, raised $75 billion, marking the largest IPO in global financial history. The shares are expected to begin trading today on the Nasdaq Global Select Market and the Nasdaq Texas exchanges under “SPCX,” while the IPO is projected to be completed on June 15, subject to customary closing conditions.
SpaceX’s potentially successful IPO could encourage other major tech firms, boosting demand for shares of firms linked to space technology.
Following these developments, the US 10-Year Treasury yield is trading flat at 4.46%, and the US Dollar Index is also flat at 99.7 on Friday.
Gold rose 3.4% on Thursday to $4,211 per ounce, while it is trading 0.7% down at $4,183 on Friday.
The S&P 500 rose 1.75%, the Nasdaq 2.54%, and the Dow Jones 1.86% on Thursday, while American indexes started Friday positive.
Meanwhile, all eyes turned to the UK’s growth data and Germany’s inflation to be announced in Europe.
The European Central Bank (ECB) hiked rates on Thursday for the first time since September 2023, taking the decision after 21 meetings due to inflationary pressures driven by the Middle East war.
ECB President Christine Lagarde said the escalating war is causing inflationary pressures in global markets, while leading indicators point to a slowdown, particularly in the services sector, but the manufacturing sector has held up so far due to rising inventories to cope with supply chain pressures and rising defense spending.
The ECB upwardly revised its average inflation forecast from 2.6% to 3% for this year, while aiming to maintain its 2% price stability target.
The bank expects inflation to be at 2.3% in 2027, while the 2% target is not expected to be reached until 2028.
The euro/US dollar exchange rate rose 0.3% to 1.1580.
German Bundesbank President Joachim Nagel said all options are open for the July meeting amid these developments.
The FTSE 100 fell 0.48%, the DAX 40 0.06%, the CAC 40 0.48%, and the FTSE MIB 30 0.95% on Thursday. European indexes started Friday on a mixed trend.
Expectations that the Middle East conflict would end soon dominated Asian markets on Friday, as a buying trend emerged in the region.
Japan's industrial production increased 2% year-on-year and 0.5% month-on-month in April, slowing from the previous month.
Japan’s capacity utilization rate fell 0.8% in the same month.
The Nikkei 225 rose 3.2%, the Kospi Index 6.9%, the Shanghai Composite Index 1.4%, and the Hang Seng Index 1.7% near the close on Friday.
*Writing by Emir Yildirim
