The abduction of Nicolás Maduro, the attempt to impeach Jerome Powell, the conclusion of the process to appoint his successor, threats to annex Greenland, fears of disruption from AI, the Supreme Court's striking down of tariffs, concerns over private credit, and finally the conflict in the Middle East: the first quarter had already felt interminable. On the morning of 9 April, we are not much more optimistic about the second quarter.

Let me begin with a brief recap of the past 48 hours. On Tuesday, the world was apparently on the brink of the abyss, as Donald Trump declared that an "entire civilisation" was about to disappear. By Wednesday, all was suddenly well again. Oil tumbled, equities surged, and a former MarketScreener intern even had croissants delivered to us, thank you Arthur. I move from the annihilation of a civilisation to croissants in a single sentence, just to prove that AI is not yet writing my copy.

In between, that is to say between the war and the market rally, let us forget the croissants and return to serious matters, Donald Trump reached for his favourite tactic: the familiar two-week deadline. It feels as though we have seen this film 50 times before. And that is not just an impression. With him, we move from one deadline to the next, knowing full well that he may ignore his own ultimatums, postpone them, or decide to act well before the deadline expires. The only certainty is that he will declare victory in the end.

In the meantime, the sense of relief was unmistakable across financial markets. The risk of near-term escalation has receded. And the market is beginning to price in a resumption of shipping through the Strait of Hormuz. Oil prices therefore fell sharply yesterday, before stabilising at around USD 96 this morning. Equities, meanwhile, rallied strongly. The CAC 40, the DAX and the Stoxx 600 rose by between 4.5% and 5%. It was the strongest gain for European indices since March 2022. On Wall Street, the S&P 500 closed up 2.5% and the Nasdaq gained 2.9%.

Most sectors took part in the rebound. The stocks that had suffered most since the start of the conflict were also the biggest beneficiaries of the move, from luxury names to airlines and banks. Energy stocks fell sharply in line with oil prices.

While the 15-day ceasefire has given markets some breathing space, it will probably take longer to reach a full settlement. Talks are due to begin in Pakistan on Friday. On the US side, they will be led by JD Vance. The vice-president has never concealed his opposition to deploying the US military in overseas operations of the kind carried out since the end of February. That he should now find himself in this role is therefore both logical and faintly absurd, depending on one's preferred degree of cynicism.

In the meantime, hostilities could resume at any moment. Indeed, the fighting did not stop yesterday. Iran notably attacked Saudi Arabia's East-West pipeline, a key piece of infrastructure that allows the Saudis to export a large share of their oil via the Red Sea and thereby bypass Hormuz.

Adding to the uncertainty, Israel continues to strike Lebanon, despite backing the ceasefire with Iran. It even carried out its largest wave of strikes against Lebanon in six weeks. In response, Iran said the ceasefire had been violated and announced a halt to tanker traffic through the Strait of Hormuz.

Yet none of these developments dented the rebound in equity indices. For now, the market is focusing on the prospect of an eventual way out, and that is what matters in the short term. We also know that ceasefires can take a little time to bed in. That is what happened during the 12-day war between Israel and Iran last June.

As for oil, although prices have already come off sharply, it will take time for energy supplies to return to normal. Gulf countries have been forced to suspend part of their output, in addition to dealing with infrastructure damaged by Iranian strikes. And the longer the stoppage lasts, the longer it takes to get production back up to speed. According to the Energy Information Administration, oil production in the Middle East is expected to be down by 9.1 million barrels per day in April, after a decline of 7.5 million barrels per day in March. The production and logistical disruptions also extend to other raw and processed goods, such as nitrogen fertilisers and aluminium. Here too, it will take a little time for the dust to settle, assuming of course that the conflict does not flare up again.

Today, investors will get the February PCE inflation reading in the United States. The figure is likely to be largely overlooked, since it relates to the period before the conflict in Iran. The key release will be March CPI, due tomorrow. Last night, the minutes of the Fed's latest meeting underlined the extent to which officials are torn between risks to employment and risks to inflation, and that the war in Iran has only made that dilemma more acute. Markets therefore reacted little to the statement, which reinforces the central case of an extended status quo.

Across Asia-Pacific markets, yesterday's euphoria has given way to a measure of caution. Purists would no doubt call it "technical consolidation", shorthand for a market that is both digesting the previous day's gains and questioning whether the situation in the Middle East is really stabilising. Australia and Taiwan are trading in negative territory, though very close to flat. India, Hong Kong and mainland China are down 0.5% and 0.1%, respectively. Japan is off 0.5% and South Korea is losing 1.8% after posting strong gains yesterday. Leading indicators are slightly lower in both Europe and the United States.

Today's economic highlights:

On today's agenda: consumer confidence in Japan; in Germany, monthly exports, trade balance, and industrial production; in the United States, weekly jobless claims, monthly PCE price index, monthly personal income, final quarterly GDP price index, monthly core PCE price index, yearly PCE price index, monthly personal spending, and final quarterly GDP growth rate. See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$4,712.21
  • Crude Oil (BRENT): US$97.02
  • United States 10 years: 4.3%
  • BITCOIN: US$71,012.1

In corporate news:

  • Shell provided updated Q1 guidance, expecting lower production compared to Q4, with shares dropping over 5% in premarket trade.
  • GSK received Chinese regulatory approval for its respiratory drug Exdensur for treating chronic rhinosinusitis with nasal polyps.
  • Close Brothers stated it can absorb a £320 million motor finance hit from the UK Financial Conduct Authority's final verdict.
  • Wickes initiated a £10 million share buyback program to reduce its share capital.
  • Renishaw appointed John Shipsey as its new CFO and confirmed David Grant as its permanent chair for two years.
  • Intuitive Investments agreed on a potential reverse takeover deal with Acceler8 Ventures, valuing the firm at £600 million.
  • BP plc announced a gas discovery offshore Egypt with fast-track potential.
  • Glencore chartered a supertanker to load Middle Eastern crude for Asia following the U.S.-Iran ceasefire.
  • Raiffeisen Bank has made an offer to acquire its compatriot Addiko at €23.05 per share.
  • AMG Critical Materials has completed a capital increase via a private placement at €34 per share.
  • Elliott Investment Management has declared a 21.67% stake in Integrated Diagnostics.
  • Landis+Gyr finalises the sale of its EMEA operations to Aurelius.
  • Temenos completes a share buyback programme worth CHF 100 million.
  • Meta is launching a new AI model, its first since its restructuring.
  • Walt Disney is planning to cut up to 1,000 jobs in the coming weeks, the WSJ has learned.
  • Delta Air Lines expects fuel costs to rise by more than $2 billion through to June due to the war in Iran.
  • ISS is advising Warner Bros shareholders to vote against golden parachutes at the special meeting.
  • AbbVie is taking legal action against a drug discount programme deemed ‘obsolete’.
  • Exxon Mobil expects its oil production to fall by around 6% in Q1.
  • Hungary is set to acquire HIMARS systems (Lockheed Martin) for $700 million.

See more news from UK listed companies here

Analyst Recommendations:

  • Shell Plc: Wells Fargo maintains its equalweight recommendation and raises the target price from USD 77 to USD 94.
  • Ceres Power Holdings Plc: Peel Hunt downgrades to sell from hold and raises the target price from GBP 1.90 to GBP 2.
  • Standard Chartered Plc: Citi maintains its neutral recommendation and raises the target price from GBP 18.30 to GBP 18.60.
  • Hsbc Holdings Plc: Citi maintains its buy recommendation and reduces the target price from HKD 163.30 to HKD 153.40.
  • Greatland Gold: Goldman Sachs maintains its sell recommendation and raises the target price from AUD 11.70 to AUD 12.80.
  • Aj Bell Plc: Goldman Sachs maintains its neutral recommendation and raises the target price from GBX 475 to GBX 495.
  • Fresnillo Plc: Morgan Stanley maintains its underweight recommendation and reduces the target price from GBX 2690 to GBX 2400.
  • Rio Tinto Plc: Morgan Stanley maintains its equalwt rating and raises the target price from GBX 6330 to GBX 6900.
  • Glencore Plc: Morgan Stanley maintains its overweight rating and raises the target price from GBX 570 to GBX 610.
  • Antofagasta Plc: Morgan Stanley maintains its underweight rating and reduces the target price from GBX 2930 to GBX 2880.
  • Rightmove Plc: Citi upgrades to neutral from sell and reduces the target price from GBP 5.20 to GBP 4.55.