Repricing

• Markets are preparing for the upcoming US Consumer Price Index (CPI) report, focusing on inflation expectations and their impact on cross-asset repricing. • Analysis centers on the interplay between economic resilience, which supports earnings and growth, and persistent inflation that threatens to drive up yields. • Key assets under observation include Gold Spot, the US Dollar Index, S&P 500, and WTI Crude Oil futures to gauge investor positioning.

• The European Central Bank (ECB) warned in its bi-annual Financial Stability Review on Wednesday that financial markets face the risk of a sudden and sharp correction. • The ECB noted that asset prices remain "stretched by historical standards" and that investors are currently underestimating significant downside risks. • Key threats cited include geopolitical tensions, specifically the war in Iran, as well as fiscal and macro-financial instabilities.

• Oracle reported earnings that exceeded expectations, lifting its stock price, while Adobe continues to face investor skepticism over its AI strategy and competitive positioning amid broader tech sector repricing. • Morningstar downgraded Adobe's economic moat rating alongside Salesforce and ServiceNow, citing concerns that AI disruption could erode traditional software competitive advantages and justify lower valuation multiples. • The broader earnings season reveals a disconnect between traditional valuation metrics and AI disruption risks, prompting investors to reassess which software companies can sustain pricing power and market share in an AI-transformed landscape.