Good morning and welcome to FirstFT Americas. In today’s newsletter:
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Wall Street warns of long-term scars in commodities and bond markets
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Financial figures discuss the threat posed by Anthropic’s new AI model
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China tells Taiwan that unification is a ‘historical inevitability’
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And the country that can’t say no to the White House
The Middle East war will leave long-term “scar tissue” in commodities and bond markets, Wall Street has warned, as investor anxieties grow about the fragile US-Iran ceasefire.
What to know: Energy prices remain far above pre-war levels, as damage to Gulf infrastructure and the loss of confidence after Iran’s de facto closure of the Strait of Hormuz threaten to weigh on recovery. Bond yields, which surged as traders lowered their bets on interest rate cuts by the major central banks, are still elevated.
Israeli strikes on Lebanon after the US-Iran truce have undermined investor optimism. Although Lebanon was originally part of the deal, it was ultimately taken out after a phone conversation between Israeli Prime Minister Benjamin Netanyahu and President Donald Trump, a person familiar with the matter said. Israel has since vowed to start direct negotiations with Beirut.
The focus today will shift to Pakistan, where US vice-president JD Vance is set to arrive ahead of potential talks tomorrow with Iranian negotiators to discuss a more longstanding peace. US special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner will be in tow, marking Islamabad’s highest-profile diplomatic event in decades. Follow the latest on the FT live blog.
Here’s what else we’re keeping tabs on today and over the weekend:
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Hungary: Voters decide whether to keep Prime Minister Viktor Orbán in power in Sunday’s parliamentary election.
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US: March CPI inflation rate and real earnings data. Court of International Trade to consider the legality of Trump’s latest round of global tariffs, in lawsuits filed by 24 states and two small businesses.
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Vatican talks: Pope Leo XIV meets French President Emmanuel Macron today.
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War in Ukraine: Ahead of Orthodox Easter this weekend, the Kremlin announced a 32-hour ceasefire, which Kyiv said it would abide by. (Reuters)
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. US Treasury secretary Scott Bessent this week gathered the leaders of major US banks to discuss the cyber threat posed by Anthropic’s latest AI model, according to people familiar with the matter. Claude Mythos Preview, which has only been released to select partners, can detect decades-old software vulnerabilities, an ability which banking figures fear could pose a risk to the financial system.
2. Xi Jinping told the visiting chair of Taiwan’s opposition Kuomintang party that unification with the mainland is a ‘historical inevitability’ and warned against moves towards “independence”. “The great tide of cross-strait compatriots drawing closer and coming together will not change,” the Chinese president said.
3. Canada is pushing to participate as an “observer” in the Global Combat Air Programme, a UK-Italy-Japan advanced fighter jet development partnership, according to people familiar with the matter. Canada’s inclusion would help it “diversify defence procurement and grow partnership with like-minded allies”, an Ottawa official told the FT.
4. Europe fears that Trump could use the decision by some European countries to restrict US access to military bases as a pretext to scale back Washington’s commitment to Nato, after the Iran war exposed a deepening rift within the strategic alliance.
5. China recorded its first year-on-year increase in factory gate prices since 2022 as the impact of the Iran war ricochets across supply chains. The producer price index increased by 0.5 per cent year on year in March, compared with a fall of 0.9 per cent in February.
The Big Read
Japan is the country that cannot say no to Trump, according to today’s Big Read. Tokyo is in need of a plan B to dependence on an unpredictable White House. But it has quickly realised there might not be one.
We’re also reading . . .
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US diplomacy: In Saudi Arabia, the United Arab Emirates, Qatar and Kuwait, there is no US ambassador present. Now’s the time to send them in, writes former US deputy assistant secretary of state Daniel Benaim.
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Doomsday risks: How can investors price unimaginable disasters? Gillian Tett offers six lessons.
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Military might: Ukraine has confirmed that its electronic warfare systems and interceptors were used to take down Iranian attack drones in the Gulf.
Chart of the day
North Sea oil prices hit a record high after Iran’s hold over the Strait of Hormuz triggered European and Asian refineries to secure cargoes.
Take a break from the news . . .
It was on a typewriter from his father’s bankrupt business that a teenage Arthur Miller first tried his hand at writing, writes Sarah Hemming. Today, an array of new productions of the US playwright’s works shows that his moral force is still much needed.
