Market Commentary: Friday 22nd May

Asian equities are ending the week on a firmer note, with the MSCI Asia Pacific Index rising 1%. The move is being led by a broader rotation into AI-linked names. Japan’s Nikkei rallied 2.7%, while SoftBank surged 11%. Lenovo hit a multi-decade high after strong AI-related earnings. US and European futures are also pointing higher, suggesting the AI theme continues to provide strong support for risk appetite.

Geopolitical caution remains. Brent crude has rebounded above $105 after three days of declines, as comments from Iran around uranium stockpiles and Strait of Hormuz tolls clouded optimism over a breakthrough in talks with the US. While there are still signs that negotiations are moving in a more constructive direction, markets remain sensitive to any indication that energy flows could stay disrupted, keeping oil and inflation risks in focus.

Elsewhere, the dollar is steady to slightly firmer as investors await Fed commentary, while Treasuries are little changed and gold has edged lower. The yen remains near 159 against the dollar after Japan’s key inflation gauge slowed more than expected. With a holiday approaching on Monday, markets remain cautious about the risk of further intervention.

• Bitcoin fell 0.1% to $77,553.01
• Ether fell 0.3% to $2,130.76
• Spot gold fell 0.3% to $4,525 an ounce

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