WS #6276
The dominant narrative remains the Iran war and its impact on oil prices and inflation, with new escalations in this window. Oil prices hit a four-year high of $126/barrel after reports that Trump will be briefed on new Iran options, and Ukrainian drone strikes continue to hit Russian oil infrastructure, including the Tuapse refinery and Perm oil pumping station. California gas prices have surpassed $6/gallon, and US inflation accelerated to 3.5% in March due to energy costs. The ECB left rates unchanged but signaled a potential June cut, while Lagarde noted inflation is expected to fluctuate near current levels before declining. In corporate earnings, Google Cloud growth was the standout among the big three, with 63% revenue growth, while Meta's post-earnings plunge (down 9%+) on raised capex guidance contrasts with the broader tech rally. Apple reports after the bell today, with expectations of 20% iPhone growth. The ECB's steady hand and the potential for a June rate cut provide a counter-signal to the bearish oil narrative, but the overall geopolitical risk remains elevated.
Key developments
- Oil prices hit four-year high above $126/barrel as Trump prepares new Iran options
- ECB holds rates, signals potential June cut as inflation remains elevated
- Google Cloud revenue surges 63% to $20B, beating estimates; Meta plunges 9% on capex raise
- US inflation accelerates to 3.5% in March, Q1 GDP grows 2% annualized
- Apple reports Q2 earnings after bell; iPhone growth expected at 20%