By Mike Dolan
April 28 (Reuters) -
What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
This week’s pack of major central bank meetings got off to a hawkish start with the Bank of Japan. While it kept interest rates unchanged, three of its nine policymakers voted to hike interest rates and it also lifted its inflation forecast. Bets on another rise in Japan’s policy rate as soon as June are increasing.
Now attention will turn to the other G7 central bank meetings
this week - including the Bank of England, European Central Bank and Federal Reserve. None are expected to alter interest rates, but, like the BOJ, they may signal more hawkish policy ahead.
I’ll get into that and more below.
But first, check out my latest column, where I ask whether markets are really "seeing through" the Iran war - or are simply conditioned for a world of permacrisis.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
TALONS ON SHOW
The yen firmed a touch on the BOJ decision to around 159 per dollar but later unwound those gains, and the Nikkei stock benchmark fell back 1%.
Stateside, the S&P 500 and Nasdaq notched their latest in a series of record closing highs after rising modestly on Monday. That came even as oil prices leapt to a three-week high, a rise that continued into Tuesday as Brent crude crossed $111 per barrel.
That reflects the continued disruption to traffic through the Strait of Hormuz and the lack of a material breakthrough in the Iran stalemate. Most recently, Reuters reported that President Trump was unhappy with an Iranian proposal to end the war that would set aside nuclear discussions until after the situation in the Gulf is resolved.
But even though investors may be warily eyeing energy markets, most are focusing more on this week’s central bank decisions and the mega-cap U.S. earnings due Wednesday and Thursday.
Tech and chip stocks remain buoyant, with Qualcomm jumping 13% on Monday on reports of a link-up with OpenAI on new smartphone processors. Nvidia surged to new records, having added back more than a trillion dollars of market cap over the past month. And South Korea’s chip-heavy KOSPI hit yet another record on Tuesday - even as other Asia markets slipped back.
Elsewhere, the Chinese government on Monday ordered that Meta unwind its acquisition of Chinese-founded, Singapore-based AI startup Manus. That shows how strategically sensitive the sector is to Beijing.
In other AI news, a renegotiated deal between Microsoft and OpenAI will allow the ChatGPT creator to sell products to Microsoft’s competitors - a sweeping but expected change to what’s been one of the AI era’s most consequential alliances. Microsoft, for its part, will aim to reduce its reliance on OpenAI by developing its own AI models.
Chart of the day
As markets await this week's sweep of results from the U.S. mega-caps, Microsoft and OpenAI's renegotiated pact clears the way for OpenAI to strike new deals with other large tech companies. Microsoft's early investment, totaling $13 billion since 2019, helped pave the way for OpenAI’s ascent as an AI pioneer and powered growth at its Azure cloud-computing business.
Today's events to watch
* U.S. Federal Reserve's FOMC begins its two-day policy meeting
* U.S. Conference Board Consumer Confidence Index for April (10 a.m. EDT)
* U.S. 2-year and 7-year note auctions
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan)
