Benjamin Jones, Global Head of Research at Invesco, noted that over the past week, tensions in the Middle East have remained elevated, while there have also been signs of diplomatic progress. The fragile ceasefire agreement has been tested multiple times. The firm believes that despite sporadic clashes, both the United States and Iran currently appear unwilling to resume full-scale hostilities. Meanwhile, the US and Iran are gradually moving toward negotiations.Markets seemed to have priced in the possibility of a potential agreement last week, but the risk of escalation remains high. Emerging market equities outperformed global markets. The US Dollar Index (DXY) fell to its lowest level since the outbreak of the conflict.Related NewsInflation Rate MoM for Apr in China is 0.3%, higher than the previous value of -0.7%. The forecast was -0.1%.The firm is closely monitoring the summit between Xi Jinping and US President Donald Trump. In the coming week, Trump and Xi may reach some form of agreement in Beijing, under which China would exert pressure on Iran to make concessions on certain US demands, thereby creating a breakthrough in negotiations and eventually restoring trade flows. However, uncertainties remain over how the situation will evolve.Over the medium term, Invesco maintains a positive view on equities, with a preference for non-US markets over the US market, and expects the US dollar to weaken further before year-end. Nonetheless, as developments are evolving rapidly, investment positioning should remain prudent rather than overly committed to a single view. (su/da)
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