Morning Wrap- Wall Street Records and Oil Stabilization (01.05.2026)

• Wall Street indices finished yesterday's session in the green, recovering all losses from the previous two sessions and reaching new all-time highs. Today, contracts are opening even higher; the US500 is trading above 7250, up 0.18%, while the US100 is rising 0.12% to reach 27630 points.

• It is worth noting that the vast majority of European markets are closed today due to Labor Day. The British market remains open, where the UK100 contract is gaining 0.16% an hour and a half before the cash market opens.

• Apple reported strong Q2 fiscal 2026 results, showing an EPS of $2.01 (vs. expectations of $1.93) and revenue of $111.18 billion (vs. expectations of $108.92 billion). The company reported a robust 20% growth in iPhone sales. Notably, the company recently underwent a change in the CEO position. Apple shares rose slightly by 2.44% during the initial post-market trading phase.

• Japan's Manufacturing PMI rose to a 4-year high, but this is primarily linked to the inventory index, which is surging due to the Middle East crisis. The index reached 55.1, up from 51.6.

• Japan gave ambiguous signals regarding a currency intervention on the Yen after it briefly spiked above the 160 level. USDJPY dropped to 155 at one point, though it has currently rebounded to around 157.

• Senior Ministry of Finance official Atsushi Mimura indicated that speculators should remain cautious throughout Golden Week, stating that the excessive weakening of the Yen is speculative in nature.

• Tokyo inflation came in at 1.5% y/y for April, below expectations of 1.6% y/y, though up from 1.4% y/y in March. On the other hand, core inflation landed at 1.5% y/y (expected 1.8% y/y; previous 1.7% y/y). Such data provides the BoJ with more comfort following the recent lack of rate hikes.

• Donald Trump received a briefing regarding potential bombing targets in Iran. The plan reportedly includes strikes on infrastructure, the seizure of the Strait of Hormuz, and the deployment of a special unit to secure enriched uranium.

• The RBA is expected to deliver its third consecutive interest rate hike next week due to further inflation growth prospects. Interestingly, Australian producer inflation (PPI) fell to 3.0% from 3.5% in the first quarter, but this is not expected to stall the rate hike.

• Conversely, New Zealand's consumer confidence index fell to a 3-year low, nearing 2022 levels, driven by a 30% increase in fuel prices. The index hit 80.3, dropping 20 points over the last two months, and remains well below pre-pandemic levels.

• AUDNZD continues its upward trend, testing the 1.22 level. Based on movements from two decades ago and assuming further monetary divergence, the potential range for this move could reach 1.30–1.38.

• EURUSD is pulling back slightly today to 1.1720. Yesterday, Christine Lagarde signaled an open door for a June hike, though this will depend on data. Meanwhile, Morgan Stanley has pushed its expectations for a Fed hike to 2027. However, forecasting remains difficult until we see the first actions from Kevin Warsh.

• According to Deutsche Bank, gold prices could nearly double to $8000 per ounce due to strong demand from EM central banks. This target is set for the next 5 years. Interestingly, major buyers are expected to include Saudi Arabia, Qatar, the UAE, and Egypt. Gold purchases are linked to the ongoing dedollarization of global reserves.

• Gold is rebounding slightly at the end of the week, trading near $4600 per ounce.

• Brent crude is stabilizing after yesterday's sharp movements related to the closing of the June futures contract. Today we see an opening at $111 per barrel, similar to yesterday and Wednesday's close. WTI crude ultimately saw a clear pullback yesterday and is currently trading at $105 per barrel.

US500 reached all new time high yesterday and opens even higher at the beginning of the new month. Source: xStation5