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Five Things You Need to Know to Start Your Day: Europe
Good morning. Oil rallies amid mounting Middle East tensions, traders await US jobs and Samsung’s chip turnaround. Here’s what people are talking about.
Oil Above $90
Crude’s rally is roiling global markets. Brent climbed toward $91 a barrel, trading near their highest since October, as mounting geopolitical tensions around the Middle East spur risk aversion. Israel has increased preparations for potential retaliation by Tehran after Monday’s strike on an Iranian diplomatic compound in Syria. Meanwhile, President Joe Biden told Israeli Prime Minister Benjamin Netanyahu that US support for his war in Gaza depends on new steps to protect civilians.
Jobs Day
The advance in US Treasuries, despite a hawkish tone from Federal Reserve Bank of Minneapolis President Neel Kashkari, may face a key test later in the day with the much-awaited payrolls data due stateside. Kashkari said rate cuts may not be needed this year if progress on inflation stalls. After more than half a dozen Fed policymakers spoke Thursday, more officials are talking Friday. Investors will be keen to stay tuned for clues on the central bank’s next move.
Ueda Hint
The yen builds on Thursday’s gains from rising geopolitical risks. Bank of Japan Governor Kazuo Ueda signaled a chance of an interest rate increase in the second half of 2024 by highlighting in an interview with local media the possibility inflation momentum will strengthen. After the publication, the Japanese currency hit a two-week high Friday, touching 150.81 per dollar in Tokyo, as Ueda’s comments pointed to the chance US-Japan rate differentials will narrow.
Billionaire Spared Jail
A visibly shaking Joe Lewis, the 87-year-old UK billionaire who pleaded guilty to insider trading, was spared jail time by a federal judge in New York. US District Judge Jessica Clarke at a hearing Thursday sentenced Lewis to three-years’ probation and a $5 million fine. An attorney for Lewis said that any incarceration would be “catastrophic.”
Samsung Boost
Samsung Electronics is seeing a turnaround in the chip sector. The world’s largest memory chipmaker’s profit rebounded sharply in the first quarter of 2024. The results underscore how demand for memory chips that power modern electronics is starting to rebound after a severe downturn in the industry. In a similar vein, the world is “grossly” underestimating how much the demand for artificial intelligence is going to expand the global market for data centers over the next five years, said the co-founder of the cloud-computing unicorn CoreWeave.
Coming Up…
European equity futures are lower amid risk aversion across markets in Asian trading. Before Friday’s highlight of US jobs data later, traders await euro-zone retail sales along with Germany’s factory orders after the European Central Bank’s March meeting account showed Thursday the case for a rate cut strengthening. Today’s Fed speakers include Collins, Barkin, Logan and Bowman.
What We've Been Reading
This is what's caught our eye over the past 24 hours.
Israel arms debate opens fresh rift in Sunak’s fractious cabinet
Famed oil trader Andurand bet on cocoa just before price surge
BlackRock unveils incentive awards as part of succession plans
Money-market cash rises to fresh all-time high with Fed on hold
Trump loses bid to toss Georgia case on free speech grounds
China’s real estate tycoons lost $100 billion in the housing collapse
Ray Dalio likened Bridgewater handoff to raising successful kids
And finally, here's what Sam is interested in this morning:
One of the top market debates heading out of the first quarter and into the second is whether the tech-driven rally in US stocks has overheated, what would be needed for it to continue and where else investors could go.
https://www.bloomberg.com/news/newsletters/2024-04-05/stock-markets-today-oil-rallies-yen-rises-samsung-profit-rebounds