Morning wrap: Trump expects an agreement with Iran as soon as this weekend 📌

Geopolitics: Iran, the US, Hormuz, and the Middle East

• Oil prices are down between 1.10% and 1.20% following comments from Donald Trump suggesting that a potential agreement with Iran could be reached as early as this weekend. At the same time, Iran carried out an attack on an airport in Kuwait, while the United States conducted strikes near the Strait of Hormuz. The situation remains tense.
• According to reports, Trump told his advisers that he would only escalate the conflict into a full-scale war if American troops were killed. This suggests that Washington may tolerate limited military clashes while keeping the negotiation channel open.
• The United States announced that Israel and Lebanon have agreed on a ceasefire framework and the creation of security zones in southern Lebanon. The previous ceasefire ultimately failed, so the durability of the new agreement remains uncertain. Nevertheless, the development is significant because Iran had linked any potential agreement with the United States to the situation on the Lebanese front.
• The US House of Representatives passed a war powers resolution aimed at preventing further strikes on Iran. It was the first vote of this kind since the conflict began. The White House downplayed the significance of the resolution, meaning it should primarily be viewed as a symbolic political gesture.

Commodities: Oil and Supply Risks

• Investment banks are warning that a prolonged closure of the Strait of Hormuz could lead to a severe oil supply shortage. HSBC described the situation as a "super-squeeze," while Morgan Stanley's models suggest Brent crude could rise as high as $150 per barrel if the blockade remains in place for an extended period.
• JPMorgan still expects Hormuz to reopen in June, mainly due to the rapid depletion of oil inventories.
• Kuwait estimates that once Hormuz reopens, it will be able to restore around 70% of its oil production within 6–8 weeks. However, a full recovery of output is expected to take considerably longer.

Equities: Asia Under Pressure

• Asian stock markets came under pressure, with JP225, SG20cash, and major Chinese indices posting modest declines.

Forex: USDJPY Near the 160 Level

• USDJPY remains trading around the 160 level, although movements across the broader foreign exchange market remain relatively limited.

Economy and Central Banks: Australia and the RBA

• Australia's economy expanded by 0.3% in Q1, bringing annual growth to 2.5%. However, economists at the Commonwealth Bank of Australia expect growth to slow to around 1.5% by year-end, reflecting weaker consumption and a cooling housing market.
• Governor Michele Bullock and other RBA officials are scheduled to appear before Parliament following three consecutive interest rate hikes. It will be the first major opportunity for lawmakers to question policymakers about the latest monetary tightening cycle.

Equities and AI: Massive Technology Investments

• Goldman Sachs estimates that Meta, Microsoft, Amazon, and Alphabet will collectively spend approximately $5.3 trillion on capital expenditures by 2030. Total spending on artificial intelligence infrastructure could reach $7.6 trillion over the next five years. The scale of these investments exceeds the annual GDP of economies such as Japan or the United Kingdom.
• Broadcom reported earnings that exceeded expectations, yet its shares fell nearly 14% in after-hours trading following yesterday's US session. Revenue from AI-related semiconductors increased significantly, but investors had been expecting an even stronger positive surprise. Similar market reactions were previously seen in companies such as CrowdStrike and Palo Alto Networks.