Global markets opened the day with measured trading after reports that the United States and Iran have reached terms to extend a ceasefire and to reopen the Strait of Hormuz, a deal that still requires final approval from U.S. President Donald Trump. For now Asian markets moved only modestly as participants awaited confirmation of the political step.
The dollar held largely unchanged while sovereign bonds kept gains achieved earlier in the week. Market participants are watching fuel-price dynamics closely - some investors believe rising energy costs could constrain the U.S. president's flexibility to abandon the agreement.
Rising global interest rates were cited as an additional driver pressing for stability in the Middle East - higher borrowing costs are a concern because they could intensify economic pressure and negatively affect risk assets if geopolitical uncertainty persists.
On the data front, inflation reports are scheduled across Europe on Friday. Although expectations point to only modest increases, those readings are likely to reinforce market assumptions that a policy rate increase is probable in June.
Japan's inflation figures for Tokyo showed prices remaining below the country's 2% target for the fourth month running. At the same time, a rebound in factory output has left the argument for a policy rate increase in Japan next month substantively on the table.
The yen was trading slightly stronger than the 160-per-dollar mark, a level that is keeping traders cautious. Market participants appear reluctant to test whether authorities will intervene to defend the currency.
Equities benefited from continued enthusiasm around artificial intelligence. Dell raised its forecast for AI server revenue, prompting a dramatic jump of 39% in after-hours trading. In Hong Kong, computer maker Lenovo climbed 18% during the session and posted a near 50% gain on the week - the most pronounced weekly rise recorded since 1997.
Market movers to watch on Friday:
- Inflation releases from Germany, France and Italy
- Canadian gross domestic product
- Progress or final confirmation on the U.S.-Iran ceasefire agreement
These items are likely to shape short-term sentiment across bond, currency and equity markets as investors reconcile geopolitical developments with evolving inflation and growth signals.