A look at the day ahead in European and global markets from Wayne Cole.
Thursday's new headlines have been dominated by a ceasefire agreement between Israel and Hamas that is touted as a first step to ending the two-year conflict and the ultimate rebuilding of war-torn Gaza. Much could still go wrong, but the easing of geopolitical risk was enough to see oil prices slip 0.6% or so.
In equity markets, the AI effect was still dominant as tech shares lifted the Nikkei <,N225> back to near record peaks, while Taiwan (.TWII) climbed 1.2% to an all-time high.
Chinese blue chips (.CSI300) returned from holidays with gains of 1.7%, reaching levels last seen in early 2022. Analysts cautioned early reads on holiday spending were "underwhelming", though the data is very patchy.
Beijing continued playing hard ball with rare earth minerals, tightening export controls on processing technology, while barring unauthorised overseas cooperation and underlining its intention to limit exports to overseas defence and semiconductor users.
The minerals have been a flash point in trade talks with the United States and the new restrictions might not be taken well by the White House.
Futures for S&P 500 and Nasdaq were steady after hitting more record highs overnight, led by chip stocks. Analysts at JPMorgan noted estimates for the looming Q3 reporting season see earnings growth in the tech sector of 20.9%, up from 15.9% back in June.
Some 81% of stocks in the tech sector have seen estimates increase, led by Nvidia (NVDA.O) and Apple (AAPL.O). Earnings overall are expected to grow 8%, with revenue up 6.3%.
Currencies have been calmer as the U.S. dollar digests a chunky 3.6% gain on the yen so far this week. It's holding around 152.50 , having briefly tested 153.00 overnight.
It's fast approaching levels that usually draw howls of complaints from the finance ministry, though it was notable that an economist advising the policy circle of Japan's likely new premier had touted the benefits of a weaker currency.
The euro was parked at $1.1650 , having just survived a test of $1.1600 support after some dire industrial data from Germany. Markets are now waiting to see if French President Macron can name a prime minister who will last more than a few days in the search for a budget deal.
Markets will again keenly feel the loss of U.S. economic data, in the knowledge the longer the government shutdown lasts the more likely future releases will get pushed back too.
Key developments that could influence markets on Thursday:
