USDJPY touches 160, Tesla's Beijing Talks

Equities

The FTSE 100 enjoyed a robust performance, recording its fourth consecutive record high last week. The blue-chip index climbed by 0.8% to close at an all-time peak of 8,146.79 points, buoyed by strong earnings reports from major US technology companies.

In the UK stock market, NatWest stood out with a significant rise. The bank's shares surged 6.1% on Friday, reaching a more than one-year high after it reported a first-quarter profit drop of just 27%, which was less than expected.

Another notable mover in the UK market was Anglo American. Despite rejecting a hefty 31.1 billion pound takeover proposal from BHP Group, citing undervaluation, Anglo American's shares advanced by 3.2%. This increase came after activist fund Elliott Management disclosed a $1 billion stake in the mining company, signalling strong investor confidence in its future prospects.

Conversely, Convatec Group experienced a decline, with its shares falling 6.5% after being downgraded by Peel Hunt from "add" to "reduce."

Turning to the US, the S&P 500 gained ground, spurred by robust earnings reports from tech giants like Microsoft and Google's parent, Alphabet. The index recorded its biggest weekly gain since early November, now having risen approximately 7% in 2024 and 24% since late October.

Meta Platforms, however, saw a sharp decline, with its shares tumbling over 10% after the company forecasted weaker-than-expected future earnings. Similarly, industrial heavyweight Caterpillar faced a 7% drop in its stock price following a sales warning, highlighting the market's dwindling patience for earnings disappointments amidst high valuations.

The coming week promises more action, with major earnings reports expected from Amazon and Apple, which could further influence market dynamics.

Forex & Commodities

The Japanese yen put in a significant rally against the US dollar early Monday, reversing from a multi-decade low of 160.245 to 155.01, following suspected intervention by Japanese authorities to support the currency. This sudden strengthening was particularly notable as markets in Japan were closed for a public holiday, suggesting strategic timing by the Bank of Japan to maximise impact during low liquidity conditions.

In other financial markets, gold prices saw a slight decrease, with spot gold falling 0.3% to $2,328.20 per ounce. This decline was influenced by a modest uptick in the US dollar, which edged up by 0.1% against its major counterparts.

Oil prices also experienced a downturn, with Brent crude futures dropping 1.1% to $88.50 a barrel and West Texas Intermediate futures decreasing by 1% to $83.01 a barrel.

The Federal Reserve is in focus this week, with its upcoming policy review on May 1 expected to adopt a more hawkish tone in light of recent US inflation data, which showed a 2.7% increase over the past 12 months, exceeding the Fed's target.