Sterling Dips, Tesla Earnings in Focus Amid PMIs

Equities

On Monday, the FTSE 100 put in big gains, rising by 1.6% and reaching levels not seen since February 2023. Among the standout performers in the UK market, Tyman surged an impressive 34.0% following the announcement of a $976 million buyout by Quanex Building Products. The construction and materials index reflected this positivity, jumping 3.3%. Another notable mover was Hipgnosis Songs Fund, which climbed 11.6% on news of a potential $1.5 billion acquisition offer from Blackstone. This offer could potentially enhance Hipgnosis' position in owning music rights, including those to songs by well-known artists such as Shakira and Red Hot Chilli Peppers.

Marks & Spencer also enjoyed a significant uptick, with its shares increasing by 4.4% after an upgrade to "Buy" from "Hold" by Jefferies. This optimism was slightly tempered by Mobico, whose shares fell 9.8% amid news that its finance chief would step down in June following a challenging financial year with profits down by over 14%. Another downturn was seen in Chill Brands, which saw its shares plummet 17.5% after its CEO was suspended due to allegations related to the misuse of inside information.

In the US, Wall Street also ended the day on a positive note, with major indices showing significant gains. The S&P 500 advanced by 0.87%, while the Nasdaq Composite increased by 1.11%, and the Dow Jones Industrial Average rose by 0.67%. These gains were largely driven by rebounds in tech and financial sectors, with the technology index leading the way.

Notable movements in US stocks included Nvidia, which recovered 4.4% following a previous 10% drop. This rebound was linked to optimistic technical expectations ahead of its earnings report. Conversely, Tesla's shares declined by 3.4% after the company announced price cuts across several major markets, including China and Germany, to boost demand.

Forex & Commodities

On Monday, the US dollar reached a new 34-year high against the Japanese yen, peaking at 154.85 yen, indicating robustness tied to expectations of sustained high US interest rates. Market observers remain watchful for any potential intervention by Japan as the yen approaches critical levels, particularly ahead of the Bank of Japan's policy meeting on Friday.

Simultaneously, the British pound saw a slight decrease, trading down by 0.1% to $1.2352 against the dollar overnight.

In commodities, gold prices declined sharply, dropping more than 2% to a one-week low at $2,330.51 per ounce. This significant fall in gold prices came as geopolitical tensions in the Middle East appeared to ease, reducing the appeal of the metal as a safe-haven asset. Similarly, oil prices also experienced a downturn, with Brent crude futures decreasing by 0.6% to $86.8 per barrel following the de-escalation of immediate conflict risks between Israel and Iran.