The IMF has lowered its global economic growth expectations. The Chinese yuan continues to strengthen

On Tuesday, the US stock market showed positive dynamics for the second session in a row. By the end of the day, the Dow Jones Index (US30) rose by 0.66%. The S&P 500 Index (US500) increased by 1.18%. The Technology Index NASDAQ (US100) closed higher by 1.96%. The main driver of optimism was hopes for the resumption of diplomatic dialogue between Washington and Tehran, which could lead to de‑escalation of the conflict and the lifting of the blockade of the Strait of Hormuz. The main inflow of capital was concentrated in the communication services and consumer‑goods sectors, while energy companies were among the underperformers due to falling oil prices.

The IMF revised its expectations for global economic development in 2026, lowering the growth outlook to 3.1%. This is 0.2 percentage points below previous estimates and is attributed to the negative impact of the prolonged conflict in the Middle East. At the same time, the prediction for 2027 remained unchanged at 3.2%. IMF experts emphasize that the current energy crisis caused by the confrontation with Iran is comparable in scale to the oil shock of 1974, although the modern economic system has a higher degree of resilience.

On Tuesday, the European stock market closed in the green. By the end of the day, Germany’s DAX (DE40) rose by 1.27%, France’s CAC 40 (FR40) closed up 1.12%, Spain’s IBEX 35 (ES35) gained 1.46%, and the UK’s FTSE 100 (UK100) closed the trading session up 0.25%. The positive dynamics were driven by hopes for de‑escalation of the Middle East conflict: reports emerged about a possible return of US and Iranian delegations to the negotiating table in Islamabad as early as this week. An additional factor that made the market question the long‑term viability of strict measures was criticism of the maritime blockade of Iranian ports from Saudi Arabia and China, which cast doubt on the effectiveness and sustainability of such restrictions. Siemens shares led the gainers, rising more than 4%.

On Tuesday, WTI oil prices showed a sharp decline, falling more than 7% lower to below 92 dollars per barrel, the lowest level in the past three weeks. Donald Trump allowed for the resumption of negotiations in Pakistan within the next two days, and Tehran expressed readiness to temporarily suspend restrictions in the Strait of Hormuz to facilitate the diplomatic process. These developments outweighed concerns related to the officially imposed maritime blockade of Iranian exports by the United States. At the same time, IEA experts expressed serious concern about the long‑term outlook for the market. According to the agency, the prolonged confrontation threatens to completely offset global oil‑demand growth this year, potentially leading to the first annual decline in consumption since the pandemic.

In Asia, Japan’s Nikkei 225 (JP225) fell by 0.74% for the trading week, China’s FTSE China A50 (CHA50) rose by 0.30%, Hong Kong’s Hang Seng (HK50) closed down 0.90% yesterday, and Australia’s ASX 200 (AU200) declined by 0.39%.

On Wednesday, the offshore yuan traded near 6.81 per dollar, holding close to its highest levels in the past three years. The strengthening of the Chinese currency is driven by a combination of domestic economic success and a favorable external environment. According to the current prognosis, China’s GDP will grow by 4.8% year‑on‑year in the first quarter of 2026. This indicates a gradual recovery of activity after slowing to 4.5% at the end of last year, when indicators reached their lowest point since the post‑pandemic reopening of the economy.

Notably, Beijing has managed to minimize the negative consequences of the Middle East conflict. Thanks to consistent efforts toward energy independence and diversification of resource supplies, the impact of geopolitical instability on domestic prices and production remains limited.