The Global Markets Monitor is a daily IMF report covering major global financial and economic developments.
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- Global oil inventories could hit modern day low
- Collapse in market volatility raises doubts
- US corporations deliver very strong earnings in Q1
- Surging Chinese tech IPOs in Hong Kong SAR draw attention
- UK announces measures to broaden T-Bill market
- Markets in Colombia underperform regional peers
Markets Turn Cautiously Optimistic on Hopes That Middle East Tensions Will Recede
Stocks in Europe were higher and US equity index futures pointed to a positive opening as Monday’s tensions in the Persian Gulf appeared to recede. However, the UK was down as HSBC and other local companies reported disappointing earnings. Oil prices were slightly lower, although uncertainties about the supply situation persist. Global equity markets have been supported by very strong corporate earnings, with US companies in the lead, and sentiment remains quite positive. However, market participants are keeping a wary eye on global interest rates, which are trending steadily higher. The UK 30-year gilt yield crossed 5.75%, the highest since 1998, while the US 30-year long bond is trading at 5.02%, not far from the post-GFC high of 5.13% reached back in 2023. A continued rise in interest rates could put severe pressure on risk assets, given widespread worries about the fiscal challenges facing the US, EU, UK, and other advanced economies.
