Summary: Financial markets moved into the weekend with risk sentiment frayed by a sharp exchange of threats between the United States and Iran and by fresh doubts over liquidity at listed private equity vehicles. While scheduled economic releases - including U.S. inflation and GDP data - and a slate of corporate results sit on the immediate calendar, investors appeared most concerned about geopolitical developments and potential spillovers for oil and the dollar.
Traders were broadly cautious as U.S. President Donald Trump set a 10 to 15 day deadline for Iran to reach a deal over its pursuit of nuclear weapons, warning that failure to comply would lead to "really bad things". Market participants described the remarks as characteristic political theatre - a phrase used by some to explain why broader asset prices had yet to shift dramatically - but the United States has nonetheless positioned military assets in the region. Aircraft carriers, warships and jets have been sent to the area, a deployment that left traders braced for a scenario in which any escalation might push energy prices and the dollar higher.
Iran has said it would respond if attacked. In line with the heightened geopolitical tension, Brent crude futures rose above $72 a barrel, reaching a six-and-a-half month high as traders reacted to the possibility of supply disruption. The dollar strengthened in the Asia session and was on track for its largest weekly advance in four months, reflecting safe-haven flows amid uncertainty.
Concurrently, market nerves were amplified by developments in listed private equity. Shares in the sector declined after Blue Owl revealed a plan to return capital from a relatively small debt fund, an action that unsettled investors. The firm reported selling $1.4 billion in assets to return some proceeds to investors and removed, on a permanent basis, an option that had allowed quarterly redemptions at one of its funds. That move fed into existing concerns about valuations and liquidity in private equity vehicles and pressured related stocks.
Other market-moving items flagged for the immediate future included a cluster of economic and corporate releases. U.S. core personal consumption expenditures (PCE) and GDP figures are due, alongside global purchasing managers' index (PMI) surveys. On the corporate front, earnings from Danone, Air Liquide and Anglo American are scheduled, providing company-specific news that could influence sector flows.
In the political sphere, President Trump also posted about aliens on social media, saying he would direct Pentagon chief Pete Hegseth and other agencies to release government files related to aliens and unidentified flying objects. Observers noted the timing of that post amid the other developments.
Retail commentary filtered through the market as well, with Walmart’s new chief executive characterizing consumer spending more cautiously during remarks on Thursday, which added a layer of attention to the consumer outlook.
Key near-term developments that could sway markets:
- U.S. PCE and GDP data
- Global PMI surveys
- Earnings from Danone, Air Liquide and Anglo American