Oil jumps as the US-Iran ceasefire lapses, and the long bond keeps climbing

Crude, yields and the ceasefire clock

The expiry of the US-Iran ceasefire set the tone before London opened. City A.M. reported oil surging on the news and UK stocks expected to dip at the bell. Monday in New York had already carried the same signature: the Wall Street Journal recorded oil prices and Treasury yields rising together on Middle East concerns, with the 30-year Treasury yield reaching a fresh high.

Two of the Journal's Monday reports framed the move around Iran tensions specifically, rather than around any domestic data. That is a change of driver from recent weeks, and it lands at the long end of the curve rather than the short.

Asia followed the American close rather than leading it. The Nikkei fell 0.7% on Tuesday, tracking Wall Street's losses. Japanese government bonds were reported falling amid expectations of a faster pace of Bank of Japan rate increases, with the Journal noting policy uncertainty and inflation fears keeping yields under upward pressure.

Gold moved the other way from the bond market's implied hawkishness. It gained as easing Federal Reserve hike expectations pressured the dollar — a separate reading of the same 24 hours, and one that sits awkwardly beside a record-high 30-year yield. China published its five-year plan for the oil and gas sector into this backdrop, per the South China Morning Post.

Who is still holding the AI trade

Norway's sovereign wealth fund, the largest single equity owner on the planet, used Monday to warn of an AI-driven stock market bubble, DW reported. It was not alone in adjusting its stance in public.

Euronews examined what Nvidia's $500 billion Wall Street deal signals about the AI boom. The South China Morning Post, meanwhile, reported Chinese hedge funds rotating out of Nvidia and the US hyperscalers in what it called an evolving AI trade, and a separate piece described several US billionaire investors reshuffling their Chinese technology holdings amid the same boom. Money is moving between the two ends of the AI complex rather than simply leaving it.

There was a casualty too. The Journal published an account of how Wall Street sussed out that Situational Awareness was on the ropes — a post-mortem on positioning rather than a market report.

Supply keeps arriving regardless of the mood. Ingenic launched its initial public offering in Hong Kong, joining what the SCMP described as a wave of mainland Chinese chipmakers raising funds in the city. Hong Kong's pipeline is being helped along by tax reforms for treasury centres, which PwC told the paper would lure multinationals and mainland firms. Elsewhere in Chinese equities, the SCMP reported that the state-backed 'national team' had ditched Kweichow Moutai, adding to the distiller's valuation troubles.

Company news and the London argument

BHP reported higher annual profit, lifted by record copper prices — the clearest single company read on the commodity complex in Tuesday's material.

In London, Pulsar Group, listed on AIM, was hit with a High Court petition by HMRC, City A.M. reported. The same paper carried a City law firm suing a prominent Emirati business family, and a piece on the FTSE 100's newest bank, whose management observed that they had 'been ignored for most of our life'. This is Money reported a Mastercard payment firm returning to the black with a £7.3m profit.

The tax debate around UK equities gained another voice. A Labour backbencher added to criticism of stamp duty on shares, and a City A.M. comment piece argued that domestic policies are choking UK businesses. Robert Jenrick claimed welfare cuts worth £50bn would allow the triple lock pension to be paid sustainably.

Across the Atlantic, the BBC described US-Canada trade talks as 'intense' with a new tariff deadline approaching. In private markets, General Atlantic is eyeing an initial public offering again, according to the Journal.

Two regulatory notes closed out the day. City A.M. reported a watchdog taking aim at lawyers who blame junior staff for errors produced by artificial intelligence. And the Solicitors' side of the AI question aside, UBS flagged four risks to Hong Kong's property recovery, asking whether it is running out of gas.