Nicolas Laroche

Global equities extended their rally, powered by significant technology sector strength and a standout earnings season: S&P 500 Q1 earnings per share (EPS) growth reached +27.7%, double initial expectations. Emerging markets outperformed, led by Taiwan and South Korea.

Global equities advanced, driven by strong US technology earnings, while fixed income markets slipped as yields moved higher and central banks maintained a cautious stance.

Global markets are navigating a fragile balance between resilient growth, persistent geopolitical tensions and cautious central banks.

Investors reacted positively to a further de-escalation in the Middle East last week.

Following the announcement of a two-week US–Iran ceasefire on Tuesday, 7 April, risk assets were supported by the perception that the worst may have been avoided.

Headlines about a potential ceasefire in the Middle East have started to appear, though visibility on the geopolitical outcome remains limited.

The recent escalation in the Middle East has materially changed the tone of markets and prompted us to revise our base case scenario, notably on energy.

As the Middle East conflict enters its fifth week, recent developments are pointing to a clear shift from an initial oil disruption towards a broadening supply shock.

The prospect of a prolonged Middle East conflict is unsettling financial markets, as investors weigh the potential macroeconomic consequences.