- Yesterday's session on Wall Street was characterized by a negative sentiment despite initial gains driven by better performance of benchmarks from the Old Continent.
- This behavior is reflected in the Asian and Pacific markets today. Nikkei is down over 2.4%, Hang Seng is down 1.3%, and KOSPI is down nearly 1.6%.
- The weakness in the market is primarily driven by the armed conflict in the Middle East, where Israel responded forcefully to recent missile attacks by Iran.
- Around 10 am Tokyo time, there were numerous reports of explosions in Syria, Iraq, and Iran. However, larger media agencies and Iran itself later denied rumors of heavy military attacks.
- Tehran airport has imposed restrictions on operations and air traffic control.
- The second factor contributing to the market weakness was the reaction to Netflix's quarterly results.
- Netflix reported results that were significantly higher than expected. The consensus exceeded most key measures for the company, such as earnings per share, user earnings, and subscriber growth. However, the company's stock lost 4% after the close of Wall Street because the management plans to stop disclosing data on new subscription growth from 2025.
- Japanese CPI inflation data for March were roughly in line with expectations. The headline index came in slightly lower at 2.7% YoY compared to the previous reading of 2.8%. However, the core data matched the previous reading at 2.6% YoY.
- FED Bostic stated that the US economy is slowing down, but at a slow pace. These comments open the window for delaying the timing of the first rate cut.
- Geopolitical uncertainty is impacting the markets today. Brent and WTI crude oil are currently up over 2.5%. Futures contracts indicate significant declines at the start of the session in the US and Europe. Bitcoin is down nearly 2%. Safe-haven currencies are leading in the FX market, including the Swiss franc, the Japanese yen, and the US dollar.
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