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EUR/USD rose to 1.1717 on Wednesday, snapping a three-day losing streak. Pressure on the US dollar stems from growing expectations that the US will reach a negotiated settlement with Iran, reducing demand for the USD as a safe-haven asset.

US authorities have confirmed that the truce, now in effect for nearly a month, remains intact. Military operations have concluded, and the focus is shifting towards securing shipping lanes in the Strait of Hormuz. Donald Trump also announced a pause in operations to facilitate the extraction of stranded vessels, providing room for negotiations.

Against this backdrop, oil prices have moderated, lowering inflation risks and reducing expectations of further policy tightening by the Federal Reserve.

Investor attention now turns to ADP private-sector employment data for April, which precedes Friday's key labour market report.

Technical Analysis

On the H4 chart of EUR/USD, the pair is trading within a consolidation range around 1.1742, currently extending down to 1.1729. A move lower below this level is likely, with potential downside towards 1.1690 and possibly 1.1636. Technically, this scenario is confirmed by the MACD indicator, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.

On the H1 chart, EUR/USD has reached the 1.1742 level and is now moving lower. A decline towards 1.1695 is likely, followed by a possible rebound to 1.1711 before a further move lower towards 1.1650 and potentially 1.1636. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below 80 and pointing firmly downwards.

Conclusion

The US dollar has lost ground amid rising geopolitical optimism, as markets increasingly price in the likelihood of a negotiated settlement between the US and Iran. With the truce holding for nearly a month and military operations paused, the focus has shifted to securing shipping in the Strait of Hormuz, while moderating oil prices have eased inflation concerns and reduced expectations of Fed tightening. This has supported a rebound in EUR/USD after three days of declines. However, technical indicators suggest the broader bearish momentum for the pair may still be intact, with potential for further downside towards 1.1690 and 1.1636. The near-term direction will likely be influenced by US labour market data due later this week.

UK services activity rebounded in April, with PMI Services finalized at 52.7, up from March’s 11-month low of 50.5. PMI Composite also improved from 50.3 to 52.6, signaling a modest recovery in private sector growth after the slowdown seen in the previous month. The pickup suggests domestic activity has regained some momentum despite growing geopolitical and inflation-related headwinds.

However, the underlying picture remains mixed. According to S&P Global, new business growth stayed subdued as weaker export demand and deteriorating confidence weighed on order books. Survey respondents frequently cited the Middle East conflict and related supply chain disruptions as major concerns, with firms reporting softer business and consumer sentiment compared with earlier in the year.

At the same time, inflation pressures intensified sharply. Higher fuel and transportation costs pushed average cost burdens to their fastest pace since November 2022, while many companies introduced fuel surcharges for customers. As a result, prices charged inflation accelerated to its highest level in more than three years.

Full UK PMI services final release here.

Market Overview

The crypto market capitalisation has risen by 0.75% over the past 24 hours, reaching $2.69 trillion. The top three performers are Zcash (+29%), Toncoin (+23%) and Filecoin (+16%). The underperformers are Ethereum (−0.4%), Algorand (−0.5%) and Basic Attention Token (−4.6%).

Bitcoin is approaching $81.5K, continuing its movement within an upward channel and hitting new highs since February. This positive momentum can easily be linked to the continued rise in stock indices, which is boosting risk appetite and bringing a more significant technical battle into view. The leading cryptocurrency is approaching its 200-day moving average (currently at $83.3K); a firm consolidation above this level would be a further sign of bullish dominance. We saw the first such sign – consolidation above the 50-day moving average – exactly one month ago. It is quite likely that, as Bitcoin approaches $83K, a short-term profit-taking phase awaits, allowing some of the gains to be taken.

The performance of altcoins clearly shows how BTC’s steady growth is encouraging increased risk-taking. First Toncoin, and today Zcash, have gained nearly 30% over the past 24 hours. The latter has been rising every day since 3 April, gaining 80% during this period; it was one of the first major cryptocurrencies to climb out of the slump at the end of January and reach highs last seen in November of last year. The key pivot zone in 2018 and 2025, near $800, looks well within reach in the coming days.

News Background

The total USDT market capitalisation has increased by $5.9 billion over the last 60 days, whereas prior to March, the market was losing around $2 billion monthly, notes analyst Darkfost. The inflow of capital into the crypto market is boosting asset values.

Morgan Stanley suggests that US banks may be able to hold Bitcoin on their balance sheets in the future, despite current regulatory barriers. The bank recently launched a Bitcoin-based exchange-traded product (ETP). Later this year, Morgan Stanley will launch spot trading in cryptocurrency on its Wealth platform.

The international payment system Western Union has launched its own stablecoin, USDPT, on the Solana blockchain. Integration with SOL will allow the company to speed up settlements and move away from traditional interbank systems, which are prone to delays.

BitMine has increased its Ethereum reserves to $13 billion, purchasing over 100,000 ETH for the third week in a row. The company’s reserves have reached 5,180,131 ETH, or 4.29% of the Ethereum supply.

Toncoin (TON) jumped by 45% amid fee reductions and the reorganisation of TON. Pavel Durov announced that Telegram would take over management of the TON crypto project from the current operator, the TON Foundation. The entrepreneur promised to reduce fees on the TON network sixfold and turn the eponymous token into a mass-market product.

Eurozone private sector activity slipped back into contraction in April, with the Services PMI finalized at 47.6, down sharply from 50.2 in March and marking a 62-month low. Composite PMI fell from 50.7 to 48.8, its weakest reading in 17 months and the first contractionary print in nearly a year and a half. The data suggest the recovery momentum that had been building earlier this year has been derailed by escalating tensions in the Middle East.

The downturn was concentrated in services, particularly consumer-facing sectors, as surging energy costs and disruptions to travel weighed heavily on demand. According to S&P Global’s Chris Williamson, the ongoing conflict is delivering a “double whammy” to the sector through higher fuel prices and weaker mobility. Meanwhile, manufacturing has remained relatively resilient, though much of the support appears to be driven by precautionary stock building amid fears of future supply shortages and further price increases. At the same time, inflation pressures intensified significantly, with prices charged rising at the fastest pace in three years.

The weakness was broad-based across the region’s largest economies. Germany and France both recorded their sharpest declines in private sector activity in more than a year, while Spain saw its steepest downturn since August 2023. Only Italy and Ireland remained in expansion territory.

Williamson warned that the current slowdown could deepen further if the geopolitical crisis persists. He noted that rising ECB interest rate expectations are already weighing on real estate and financial services activity, while higher borrowing costs risk amplifying the broader decline in business confidence.

Full Eurozone PMI services final release here.

AUD/USD started a fresh increase above 0.7175 and 0.7200. NZD/USD is also rising and might aim for more gains above 0.5950.

Important Takeaways for AUD USD and NZD USD Analysis Today

• The Aussie Dollar started a steady increase above 0.7150 against the US Dollar.
• There was a break above a bearish trend line with resistance at 0.7190 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is consolidating gains above the 0.5925 pivot zone.
• There was a break above a bearish trend line with resistance at 0.5900 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from 0.7100. The Aussie Dollar was able to clear 0.7100 to move into a positive zone against the US Dollar.

There was a break above a bearish trend line with resistance at 0.7190. There was a close above 0.7200 and the 50-hour simple moving average. Finally, the pair tested 0.7245. A high was formed near 0.7245 and the pair remains elevated for more gains.

On the downside, initial support is near the 23.6% Fib retracement level of the upward move from the 0.7135 swing low to the 0.7245 high at 0.7220. The next area of interest could be near 0.7190 and the 50% Fib retracement.

If there is a downside break below 0.7190, the pair could extend its decline toward the 0.7175 zone and the 50-hour simple moving average. Any more losses might signal a move toward 0.7135.

On the upside, the AUD/USD chart indicates that the pair is now facing resistance near 0.7245. The first major hurdle for the bulls might be 0.7260. An upside break above 0.7260 might send the pair further higher. The next stop is near 0.7320. Any more gains could clear the path for a move toward 0.7350.

NZD/USD Technical Analysis

On the hourly chart of NZD/USD on FXOpen, the pair started a fresh increase from 0.5855. The New Zealand Dollar broke the 0.5875 barrier to start the recent rally against the US Dollar.

More importantly, there was a break above a bearish trend line with resistance at 0.5900. The pair settled above 0.5925 and the 50-hour simple moving average.

It tested 0.5945 and is currently showing signs of more gains. The NZD/USD chart suggests that the RSI is now just above 70. On the upside, the pair might struggle near 0.5945. The next major hurdle is near the 0.6000 pivot level.

A clear move above 0.6000 might even push the pair toward 0.6050. Any more gains might clear the path for a move toward the 0.6140 zone in the coming days.

On the downside, immediate support is near the 0.5925 level and the 23.6% Fib retracement level of the upward move from the 0.5856 swing low to the 0.5945 high.

The first key zone for the bulls sits at 0.5900 and the 50% Fib retracement. The next important level is 0.5875 and or 50-hour simple moving average. If there is a downside break below 0.5875, the pair might slide toward 0.5855. Any more losses could lead NZD/USD into a bearish zone to 0.5820.

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Bitcoin’s move above $80,000 may be the moment this rally changes character. What started as another rebound alongside surging tech stocks is now beginning to look more like a genuine momentum breakout—one that could pull institutional money back into the market aggressively.

The backdrop is almost ideal for crypto bulls. NASDAQ and S&P 500 are pushing to fresh record highs, risk appetite has returned sharply after the latest Middle East de-escalation, and investors are once again in “buy everything” mode. In that kind of environment, Bitcoin naturally becomes one of the beneficiaries.

But this rally is no longer relying on sentiment alone. The technical picture has improved meaningfully. Bitcoin has broken above the upper boundary of its near-term rising channel, signaling upward acceleration rather than just steady recovery. It has also pushed through 80,492 resistance, turning a key former ceiling into a potential launchpad for the next move higher.

That is why the $80K level matters so much. Major round numbers in Bitcoin are never just psychological—they often become structural. If Bitcoin can stabilize above this area, it changes how institutional investors and systematic strategies react to the market.

And that is where the ETF story becomes critical. A sustained break above $80K could trigger a fresh wave of momentum-driven ETF inflows. Higher prices attract more institutional buying, which then supports further gains, reinforcing the breakout and drawing in additional capital. It is the kind of feedback loop that can accelerate moves very quickly once it starts.

Markets may already be entering that phase. The breakout itself is improving confidence, and confidence is improving flows. That dynamic can become self-reinforcing, especially when broader macro conditions are supportive and liquidity is flowing back into risk assets.

None of this guarantees that Bitcoin has fully escaped its larger bearish structure. The rally from 59,866 could still eventually prove to be corrective relative to the collapse from the 126,289 record high. But the important point is that momentum is clearly expanding, not fading.

Technically, as long as 74,880 support holds, further upside remains favored. The next key objective sits at 38.2% retracement of 126,289 to 59,866 at 85,239. That level is likely to become the next major battleground between bulls and sellers.

How Bitcoin behaves there could define the entire medium-term outlook. A sharp rejection would support the argument that this is still just a powerful bear market rebound. But if Bitcoin can consolidate above $80K first and continue attracting ETF demand, traders may begin treating the current move as the early stage of a much larger reversal.

In other words, the real question is no longer whether Bitcoin can break $80K. It already has. The question now is whether the market is ready to treat $80K as the new floor—and build the next institutional buying wave on top of it.

Key takeaways

• Intervention-driven downside resumes: USD/JPY plunged 2.4% to a two-month low after Japan’s ~$34.5B intervention on Thursday, 30 April, with a sharp intraday drop on today, 6 May, hinting at a possible second round of intervention.
• Rebound likely a dead cat bounce: The 1.5% recovery to 157.94 appears corrective within a newly formed short-term downtrend, rather than a reversal.
• Bearish technical breakdown confirmed: Price broke below an “ascending wedge” at 157.55, reinforcing downside bias below 157.30/55, with key supports at 155.55, 154.65, and 154.05 in focus.

After the “final verbal warning” and actual FX intervention by Japanese authorities last Thursday, 30 May 2026 (Bloomberg reported that Japan spent $34.5 billion to buy up the yen), the USD/JPY plummeted by 2.4% (its worst daily loss since 20 December 2022) to hit a two-month low of 155.49 on Friday, 1 May 2026.

Thereafter, the USD/JPY staged a rebound of 1.5% in the next three sessions to print an intraday high of 157.94 in today’s (Wednesday, 6 May’s start of the Asian session).

The 1.5% rebound of the USD/JPY is likely a minor corrective rebound (aka dead cat bounce) within a minor downtrend phase, as the latest Japanese authorities' intervention has triggered the start of a short-term bearish trend.

Technical elements also suggest the end of the three sessions of rebound, and a return of the bearish impulsive down move sequence for the USD/JPY.

In today’s Asian session (Wednesday, 5 Ma) at the 12 pm SGT hour mark, the USD/JPY plummeted swiftly in a span of 15 minutes (a drop of close to 2 big figures from 157.83 to 155.80 at this time of writing). It smells like a second round of intervention.

Let’s focus now on the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

USD/JPY – Bearish Breakdown Below “Ascending Wedge” Support at 157.55

Fig. 1: USD/JPY minor trend as of 6 May 2026 (Source: TradingView).

Trend bias: Bearish below 157.30/55 short-term pivotal resistance (see Fig. 1).

Supports: 155.55, 154.65, 154.05 (also 200-day MA), and 152.65 (also a Fibonacci extension)

Next resistances: 158.10 and 158.60 (also 50-day MA)

Key Elements to Support the Near-Term Bearish Bias on USD/JPY

• The rebound on the USD/JPY from its 1 May 2026 low of 155.55 has taken on the form of a bearish “Ascending Wedge” corrective configuration.
• Price actions have broken below the “Ascending Wedge” support at 157.55, reinforcing the start of another bearish impulsive down move sequence within its ongoing minor downtrend phase.

Markets

A violent sell-off hit UK Gilts as local markets reopened following Monday’s Spring Bank Holiday. In a catch-up move to weakness in core bonds on Monday, UK yields jumped 9 to 10 bps across the curve. Contrary to the move in the EU and the US, the curve move was a parallel shift rather than bear flattening. The UK 30-yr yield hit its highest level since May 1998 (5.78%). The UK 10-yr yield moved back above 5% and came within 2 bps from the highest level since June 2008. This set-up suggests that Bank of England governor Bailey better avoids being too complacent on the need to tighten monetary policy in the face of looming inflation risks. Especially given the fragile political situation with the ruling Labour party set to lose big in tomorrow’s UK local elections. It might be the straw that breaks PM Starmer’s back while also raising questions around Chancellor Reeves’ authority to pursue fiscal discipline. Sterling didn’t suffer from rising UK risk premia with a new bullish shift in risk sentiment adding some counterweight.

Key European and US benchmarks gained 1-2% as oil prices erased Monday’s increase. Brent crude is back at where it started the week ($108/b). Markets took comfort from US comments that the ceasefire was still in place despite a day of clashes around Hormuz after US President Trump announced the start of “Project Freedom”. Iran’s foreign minister immediately labeled it “Project Deadlock”. The US didn’t walk its talk that any new Iranian violence would be met with great US fury. It’s also telling that President Trump after two days already said that he would pause the project to guide ships through the Straight, boasting “great progress” toward “a complete and final agreement with representatives in Iran”. The latter not being confirmed from the Iranian side. High-level talks between Iran and China suggest something might be brewing when US President Trump and Chinese President Xi Jinping meet next week.

Asian stock markets extend their rally this morning with South Korea significantly outperforming thanks to Samsung. The company hit the $1tn valuation mark on the memory chip boom. Japanese markets remain closed for holidays, but that didn’t stop officials from more FX interventions. They pushed USD/JPY from 158 to 155 as the current JPY-valuation remains out of line with fundamentals. As long as oil prices stay this high, we fear Japanese officials to fight an uphill battle. Today’s eco calendar contains the monthly ADP employment report. Weekly data suggest another solid outcome which could trigger more repositioning on US money markets. Since last week’s Fed meeting, they went from erring on the side of a rate cut as the next central bank move to erring on the side of a hike. The US quarterly refunding announcement might draw some attention too in light of huge and still rising US budget deficits. In line with the situation in the UK, watch out for any vulnerability at the (very) long end of the curve. The US 30-yr yield at the end of last week briefly moved beyond the psychological 5% barrier.

News & Views

South Korean inflation accelerated in April to 0.5% M/M and 2.6% Y/Y, the fastest pace since July 2024 (from 0.3% M/M and 2.2% Y/Y). Core inflation was unchanged at 2.2%. Transportation costs rose 3.4% M/M. Prices for recreation and culture added 1.5%. Food prices declined by 0.9% M/M to slow to 0.3% Y/Y. Inflationary tendencies were slowed by government measures to cap the rise in fuel prices. The Bank of Korea (BoK) indicated that it expects inflation to rise further in May as higher oil price might feed through to other products. Yesterday, the deputy governor of the BoK suggested that the combination of ongoing resilience in economic activity and higher inflation might cause it to consider raising rates. The BoK kept its policy rate unchanged at 2.5% since May 2025. It meets next on May 28.

Over the previous session, the NOK/SEK cross rate challenged the psychological parity barrier and touched the highest levels since end may 2024. The NOK outperformance over the SEK comes as both central banks will announce results of their regular policy meetings tomorrow. At its March meeting, the Norges Bank indicated that the inflation outlook might make It appropriate to raise the policy rate at one of the forthcoming meetings. Money markets see a 50% chance for a 25 bps move tomorrow, with a hike fully discounted by June. A high oil price also supports NOK outperformance. Regarding the Riksbank, expectations that it might give in to rate hike pressures are much more modest. The central bank at its previous meeting signaled that it expected the policy rate to stay at 1.75% for some time to come, even as uncertainty is high. This assessment was supported by modest March CPI figures. April CPI figures will be published today.

The Project Freedom was paused, meaning that the US abandons the idea to escort ships out of the Strait of Hormuz – as the initiative didn’t fare well with Iran. And the lack of further escalation in the Middle East was enough to divert investors’ attention back to earnings. The rally that paused for a few hours resumed.

The S&P 500 and Nasdaq pushed to fresh record highs, while the Stoxx 600 rebounded from its 50-DMA. Gains were led by technology stocks on both sides of the Atlantic. VanEck’s Semiconductor ETF traded at a fresh record, ASML rebounded 3.5%, and Infineon Technologies, a German chipmaker and one of Europe’s largest semiconductor companies, rose more than 8% to a record high before announcing earnings.

Today, the Kospi index confirms that optimism with more than a 6.5% jump at the time of writing.

So the market mood now flip-flops between AI optimism and Middle East headlines, with geopolitical worries having a smaller and shorter-lived impact as investors become used to the war headlines. I believe there is a certain underpricing of the risks here, but the reality is that the perfect calm for entering a position doesn’t exist. We are either confronted with geopolitical crises, trade wars or high valuations.

Today, it’s a mixture of all three, yet the major indices are doing well, including EM. MSCI’s EM index also hit a record high yesterday. The stock rally itself is serving as a hedge against inflation, though the risk of a sharp reversal cannot be ruled out given the uncertainties. Oh well.

Trade, war and tech worries haven’t really shown up in earnings so far. More than 80% of S&P500 companies have reported better-than-expected revenue so far. In Europe, around 45% of Stoxx600 companies surpassed revenue expectations. The gap is certainly due to the differing tech exposure of the two continents.

Again yesterday, AMD delivered a strong earnings beat, with Q1 revenue rising 38% YoY to $10.3 billion and data-centre sales surging 57% thanks to booming AI infrastructure demand. The company also guided Q2 revenue above expectations, reinforcing optimism around its AI accelerator and server CPU businesses. The market reaction was equally positive: AMD shares jumped 16% in after-hours trading as investors cheered the strong AI-driven growth outlook and improving visibility on future demand.

Super Micro Computer also jumped around 18% in after-hours trading after delivering mixed results: earnings beat expectations comfortably, helped by improving margins and strong AI server demand, but revenue missed estimates as some customer deployments were delayed. The company nevertheless issued upbeat guidance for the current quarter, signalling confidence that AI infrastructure spending remains robust. Investors focused on the stronger profitability and guidance rather than the revenue miss, as confirmation of the strength of the renewed AI-led optimism.

So this morning, with no further escalation in the Middle East and falling oil prices, US and European futures point to a positive start.

That relief is also notable in the US dollar index, which is trading lower this morning against most major currencies. The EURUSD is pushing above the 1.17 mark, while the USDJPY eased back toward 155.

On the data front, US figures were mixed yesterday. ISM data pointed to softer activity in March, while job openings fell less than expected in March and new home sales rose compared with a month earlier. Today, eyes will be on the ADP report, where expectations are that the US economy may have added around 118K private jobs in April.

What’s interesting is that predictions diverge. On one hand, the thousands of job cuts announced by big (and smaller!) tech companies due to AI replacement weigh on estimates. On the other hand, these same companies are spending hundreds of billions of dollars building massive AI infrastructure that also creates jobs — but those investments don’t hit headlines as hard as Big Tech layoffs do. So the question is whether job losses are stronger or softer than the job gains. I guess we will see.

The way the market processes the news will certainly be impacted by the positive vibes of the moment. Softer-than-expected jobs data could revive Federal Reserve (Fed) dovishness, pull yields lower and support a further equity rally. Meanwhile, stronger-than-expected figures could confirm that the US economy is not doing that badly after all, cement optimism and push equities to fresh highs.

Given the market’s resilience to bad news and enthusiasm around good news, I certainly don’t see the bears taking the upper hand for now. But selloffs happen suddenly.

One interesting point, though: some analysts note that the positive reaction to earnings beats is smaller than the negative reaction to earnings misses. That is confirmation that valuations are high and US equities remain expensive.

The question is whether this optimism could spread to other markets. The answer is: it depends. Middle East tensions have clearly shifted capital flows toward technology names, both inside and outside the US. European and UK stocks lagged behind tech-heavy indices like the Kospi and Taiex. Rising energy costs initially hit Asian indices harder, but the negative impact on market sentiment tends to last longer in Europe.

Given investors’ appetite for hiding from the war under the tech roof, the underperformance of European indices will likely remain in play until there is more clarity in the Middle East and, ideally, a notable retreat in energy prices. Otherwise, European economies could also face higher interest rates alongside a slowing economic outlook — and for cyclical European indices, that is not good news.

In focus today

In Sweden, flash CPI figures are set for release, with a decline expected due to the VAT reduction on food from 12% to 6%. CPIF excluding energy is forecast to fall to 0.3% y/y, down from 1.1% in March, reflecting the tax impact. CPI and CPIF are affected in the same way, but high fuel prices keep CPIF at 1.2%. More indicators suggest rising prices, while tax effects may mask higher underlying inflation over the coming year.

In the US, ADP will release its monthly estimate of private-sector employment growth for May. Weekly 'pulse' estimates from ADP suggest a strong rebound in job growth during the reference period, despite ongoing uncertainties around energy supply.

In the euro area, the final services and composite PMI are revealed today. The preliminary composite PMI stood at 48.6, with the services sector acting as the main drag as its PMI fell further to 47.4. The manufacturing PMI, released on Monday, held steady at 52.7, matching the preliminary figure.

In Poland, the National Bank of Poland (NBP) is set to announce its policy rate decision, with consensus anticipating that the NBP base rate will remain unchanged at 3.75%.

Today at 10.00-10.30 CEST, we will host a webinar on the Strait of Hormuz closure and its implications for markets. Topics include the severity of the energy supply shock, prospects for recovery, and the broader economic impact.

Economic and market news

What happened overnight

In the US-Iran conflict, Iranian Foreign Minister Abbas Araghchi met with China's Foreign Minister Wang Yi in Beijing to discuss bilateral relations and regional developments, amid Iran's diplomatic efforts to rally international support. Meanwhile, Trump announced a temporary pause to "Project Freedom," a naval operation in the Strait of Hormuz, indicating a potential de-escalation. Oil prices declined following the announcement and continued to fall overnight, driven by expectations of progress toward a peace deal with Iran, as hinted by Trump. Trump's upcoming visit to China adds further complexity, given Beijing's close ties with Tehran and its economic reliance on oil transit through the strait.

What happened yesterday

In the US, March JOLTs and April ISM Services came in close to expectations, with limited market impact expected. JOLTs figures were mixed, as hiring increased to 5.6M while layoffs rose to 1.9M, and the job openings-to-unemployed ratio remained steady at 0.95, indicating little change in labour market balance over the past six months. ISM Services also delivered mixed signals, with unchanged prices, weaker new orders, and improved business activity and employment indices. Overall, the releases offer no clear directional signals.

In Switzerland, April CPI aligned with expectations, as headline inflation climbed to 0.6% y/y from 0.3% in March, driven by increased prices for petrol, diesel, and heating oil. Core inflation softened to 0.3% y/y, below the consensus forecast of 0.5%. With domestic inflation pressures remaining muted, this outcome is unlikely to influence the SNB's policy stance, and we anticipate the central bank will keep the policy rate unchanged at 0%.

Equities: Equities rebounded on Tuesday. S&P 500 0.8% and small cap Russell 2000 1.8%. Tech continued to lead the market, but preference shifted from software to semis. Intel, Qualcomm and Micron all surged, up 11-13%. Semi heavy Korea is surging 6% this morning (70% ytd, 180% LTM) and Shenzhen 2.5%, following the holiday yesterday. While Stoxx 600 gained 2% the last month, S&P 500 rallied 10%. Sector composition explains this underperformance, not energy prices alone.

So, tech continued in jaw dropping speed, with Asia and US the prime beneficiaries. However, general cyclicals also rebounded yesterday, along with small caps, following reassuring comments about the ceasefire from the US admin. Regional banks, materials and industrials were up between 1-2%. Stoxx 600 gained 0.7%

FI and FX: There was a modest rebound in the global bond market as the oil price declined yesterday. The truce between US and Iran seems to be holding up and the risk of an escalation seems to be diminished, and we have seen a combination of rising equity prices and decline in bond yields. Hence, the 30Y Treasury yield is trading around the 5% level. However, in UK government yields continue to increase given the higher energy costs as well as the political uncertainty with the upcoming local elections. Here the level for the 30Y government bond yield is at 5.78%, which is the highest level since 1998. The dollar has been range-trading around the 117-level versus the Euro and moved above the 157-level versus the JPY.