As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Japan intervened in FX markets as yen broke 160, oil hit $126 before pulling back, and mixed Fed/earnings signals left US stocks flat — cross-asset volatility stayed high into Thursday's European session.
In Asian Equity Markets stocks traded lower on Thursday as investors remained cautious around the oil shock, central bank policy and renewed volatility in the yen. Regional risk appetite was weaker, with Japan’s Nikkei down around 1 percent and South Korea’s KOSPI falling 1.4 percent, while broader Asian trading reflected concern that higher energy costs could keep inflation sticky and pressure margins. Sentiment was also shaped by the previous day’s mixed Wall Street session, where the Dow fell while the S&P 500 and Nasdaq were broadly flat, and by continued uncertainty around the Middle East conflict and the Strait of Hormuz.
In Currency Markets the Japanese yen surged after sources said Japan intervened to support the currency, following a move in dollar-yen above the closely watched 160 level. The dollar fell sharply against the yen, briefly moving toward 155.5, marking one of the largest single-day yen rallies since 2022. The move dragged the dollar index lower by around 1 percent, even as broader FX markets remained focused on the diverging pressure facing central banks: slowing growth risks on one side, and oil-driven inflation on the other. The euro and sterling were supported by the softer dollar, while markets also digested the ECB and Bank of England decisions to keep rates unchanged.
In US Equity Markets stocks ended mixed on Wednesday as investors weighed the Federal Reserve’s rate decision, elevated oil prices and a heavy week of technology earnings. The Dow Jones Industrial Average fell around 0.6 percent, while the S&P 500 and Nasdaq finished broadly flat. Seven of the 11 S&P 500 sectors declined, although energy gained around 2.4 percent as crude prices remained elevated. After the close, early earnings reactions were mixed, with Alphabet moving higher in after-hours trading while Meta came under pressure, leaving investors focused on whether mega-cap technology earnings could offset the macro drag from higher oil and tighter financial conditions.
In Commodities Markets oil remained the key driver of cross-asset volatility as traders continued to price the risk of supply disruption linked to the Middle East conflict. Brent crude had traded as high as $126.41 a barrel before paring gains, while U.S. crude also remained elevated, with markets reacting to limited transit through the Strait of Hormuz and the absence of a clear agreement to reopen the waterway. Gold was firmer as safe-haven demand returned, with spot gold trading above $4,600 per ounce after its previous decline. The combination of higher oil and resilient precious metals kept the commodities complex central to the inflation and policy debate.
In European Equity Markets stocks moved higher by late morning on Thursday, helped by stronger corporate earnings and relief that oil prices had eased from their most extreme intraday levels. The pan-European STOXX 600 was up more than 1 percent, with Germany’s DAX and the UK’s FTSE also stronger, as investors looked through near-term geopolitical uncertainty and focused on a better earnings backdrop. Industrials, healthcare and utilities were among the stronger areas, while banks were more mixed after softer French banking results. Rolls-Royce gained after maintaining its profit outlook, while heavyweight healthcare names including AstraZeneca and Novo Nordisk also supported the index.
In Bond Markets government bonds were better bid as the pullback in oil from its highs reduced some immediate inflation pressure, although markets remained sensitive to any renewed energy spike. U.S. Treasury yields moved lower, with the two-year yield down around 4.9 bps at 3.883 percent and the benchmark 10-year yield down around 2.8 bps at 4.388 percent. European front-end yields also eased, with German two-year yields snapping an eight-day rise, as investors balanced still-elevated inflation risks against the possibility that the energy shock could weigh on growth. Central banks remained cautious, with the Fed, ECB and Bank of England all keeping policy restrictive while signalling concern over renewed price pressure.
