MORNING NOTE: Markets Reopen as Trump’s Iran Deadline Nears, Tensions Rise
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Global markets return from the holiday period under heightened tension as U.S. President Donald Trump’s deadline for Iran approaches. Investors remain cautious amid rising geopolitical risks and surging energy prices, while Asian markets show a mixed performance. Strong earnings from Samsung offer limited support, but overall sentiment remains fragile.
Mixed Start in Asia, Samsung Earnings Stand Out
Asian markets opened with a mixed tone as geopolitical uncertainty continues to weigh on sentiment. On the positive side, Samsung Electronics delivered a strong first-quarter performance, significantly boosting investor confidence in the technology sector.
The company reported profits nearly eight times higher year-on-year, driven by robust demand from AI data centers. Rising chip prices and supply constraints supported margins, while the depreciation of the South Korean won to a 17-year low against the dollar further boosted overseas earnings.
- Samsung shares rose 1.4%
- South Korean and Japanese markets traded broadly flat
- Taiwan equities gained around 1.5%
Despite these gains, concerns remain about whether such strong performance can be sustained amid ongoing geopolitical risks and cost pressures.
U.S. Futures Slip, Oil Prices Surge
While Asia showed pockets of resilience, U.S. equity futures pointed lower:
- Nasdaq futures declined around 0.6%
Investors appear reluctant to take new positions as uncertainty surrounding the Middle East conflict intensifies.
Energy markets remain the key focus:
- WTI crude climbed above $114 per barrel
- Brent crude rose past $111 per barrel
Concerns over prolonged disruptions in the Strait of Hormuz and Trump’s escalating rhetoric—including threats targeting Iranian infrastructure—are fueling market anxiety and pushing oil prices higher.
Brokerages Warn Inflation Risks Persist Despite Softer Data; Limited Room for Rate Cuts
Dollar Holds Firm, Yen Near Critical Level
In currency markets, the U.S. dollar remains supported by safe-haven demand:
- Dollar index holds above the 100 level
- EUR/USD trades sideways near 1.1530
- USD/JPY hovers close to the critical 160 threshold
Rising bond yields in Japan, coupled with inflation concerns, are increasing expectations that the Bank of Japan may be forced to tighten policy. This raises the risk of a carry trade unwind, which could further dampen global risk appetite.
Japan’s 10-year government bond yield climbed to 2.43%, its highest level since 1997.
Gold Under Pressure, Silver Consolidates
Gold prices continue to struggle under the weight of rising yields and a stronger dollar. After falling more than 11% in March, gold has started the new month on a weak footing.
Technically:
- A sustained move above $4,700 is needed to signal renewed upside momentum
Silver, meanwhile, remains range-bound around $71, with downside risks increasing if support levels break.
Türkiye Markets Show Relative Resilience
Despite global volatility, domestic markets in Türkiye displayed relative strength:
- Borsa Istanbul closed 1.4% higher
- USD/TRY remained stable around 44.60
Recent data shows continued appreciation in the real effective exchange rate, while signs suggest that the decline in central bank reserves has begun to stabilize.
Supported by swap transactions and stable gold prices:
- The Central Bank of the Republic of Türkiye (CBRT) saw its net reserves (excluding swaps) rise to around $10 billion
Inflation Risks Mount as Energy Prices Climb
Rising energy prices are increasingly threatening Türkiye’s disinflation process. While March inflation data reflects past conditions, recent hikes in electricity and natural gas prices point to stronger inflationary pressures ahead.
In bond markets:
- The 2-year benchmark yield remains elevated at around 41%
This suggests that the disinflation path is becoming more challenging amid global energy shocks.
Opportunity Amid Crisis?
The ongoing energy crisis may also create strategic opportunities for Türkiye. Disruptions in the Strait of Hormuz are likely to accelerate the search for alternative energy routes.
In this context:
- Türkiye’s geopolitical position could gain importance
- Its role as an energy transit hub may strengthen
- Regional dynamics, including Eastern Mediterranean energy routes, could shift
Key Watch: Data and Geopolitics
As markets fully reopen, attention will focus on:
- Trump’s Iran deadline and potential escalation
- U.S. inflation data later this week
- European services PMI releases
For now, geopolitical developments remain the dominant driver of global market direction.
By Emre Değirmencioğlu, Kıbrıs İktisat Bank
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