InvestMacro

On Thursday, the US stock market surged sharply. By the end of the day, the Dow Jones (US30) jumped 1.62%, the S&P 500 (US500) gained 1.02%, and the tech-heavy Nasdaq (US100) closed 0.89% higher. The S&P 500 and Nasdaq recorded their strongest monthly gains since 2020. Investor optimism was fueled by strong corporate earnings, which managed to overshadow concerns about an oil shortage and disruptions in the Persian Gulf.

The corporate sector split into clear winners and losers: Alphabet (+10%) and Intel became the stars of the day – the former thanks to record performance in cloud technologies and its Gemini AI, and the latter due to strong demand for its 18A chips. They were joined by Caterpillar (+9.8%) and Eli Lilly (+10%), which raised its profit outlook amid strong demand. Apple also supported the positive sentiment by reporting better‑than‑expected results after the market closed. Meanwhile, Meta and Microsoft continued to decline as markets remained skeptical about their massive spending on AI infrastructure. However, the PCE Inflation Index rose to 3.5%, which, combined with the Federal Reserve’s hawkish stance, sets the stage for a prolonged period of high interest rates. The market is effectively celebrating corporate efficiency while ignoring rising stagflation risks and geopolitical tensions.

The Mexican peso (MXN) stabilized around 17.5 per dollar, remaining near a three‑week low. Pressure on the currency increased after GDP data showed that Mexico’s economy contracted by 0.8% in Q1 2026 – significantly worse than expected. The downturn affected all key sectors, including services and manufacturing.

On Thursday, European markets broke an eight‑session losing streak. Germany’s DAX (DE40) rose 1.41%, France’s CAC 40 (FR40) gained 0.53%, Spain’s IBEX 35 (ES35) added 0.78%, and the UK’s FTSE 100 (UK100) closed 1.62% higher. Support came from the ECB and the Bank of England keeping interest rates unchanged, as well as a decline in oil prices. However, regulators signaled that future decisions will depend on economic conditions: the ECB pointed to persistent risks to inflation and growth, and its president confirmed that a rate hike had been discussed. The Bank of England, in turn, did not rule out tougher measures if the consequences of the conflict with Iran intensified pressure on the economy. Fresh data showed eurozone inflation accelerating to 3%, the highest in several years, while economic growth at the start of the year was weaker than expected.

Silver prices (XAG) posted a strong rebound, rising to $73 per ounce after falling to a monthly low. The recovery was supported by temporary stabilization in oil prices, which cooled government bond yields and revived investor interest in precious metals. Despite ongoing tensions between the US and Iran, the market temporarily shifted its focus from geopolitical risks to fundamental demand factors.

WTI crude prices moved lower after briefly climbing to nearly a four‑year high of around $111 per barrel. Pressure on prices emerged following reports that Donald Trump may be presented with a detailed military options report regarding Iran. The document, prepared by military leadership, reportedly includes scenarios for resuming the conflict, including the possibility of a short but intense series of strikes. Despite the formally active ceasefire, tensions in the region remain high. Restrictions imposed by both the US and Iran have effectively disrupted the functioning of the key oil supply route through the Strait of Hormuz, through which a significant share of global crude exports passes. As a result, the market is facing a severe supply shortage, which international energy agencies describe as unprecedented. Against this backdrop, US oil exports have surged to record levels as buyers seek alternative sources.

In Asia, Japan’s Nikkei 225 (JP225) fell 1.06%, China’s FTSE China A50 (CHA50) slipped 0.08%, Hong Kong’s Hang Seng (HK50) closed negative 1.28%, and Australia’s ASX 200 (AU200) declined 0.24%.

On Friday, the Australian dollar (AUD) hovered near 0.72 USD, ending the week with gains as markets prepare for the upcoming central bank rate decision. The regulator is expected to raise the rate by 25 basis points, marking the third consecutive hike and bringing it to 4.35%. Expectations of further tightening later in the year are growing, as inflationary pressures remain elevated, partly due to global supply disruptions linked to restrictions in the Strait of Hormuz.

The New Zealand dollar (NZD) traded near 0.59 USD after rising about 1.3% in the previous session, supported by a notable weakening of the US dollar. Markets still consider the possibility of further tightening by the Reserve Bank of New Zealand (RBNZ). However, expectations of a rate hike in May have dropped significantly – investors now see the probability at below 30% after the central bank governor stated that core inflation in Q1 remained within the target range. Meanwhile, expectations of tightening in the summer are already largely priced in.

On Wednesday, the U.S. stock market declined. By the end of the day, the Dow Jones index (US30) fell by -0.57%. The S&P 500 index (US500) slipped by -0.04%. The tech index Nasdaq (US100) closed slightly higher at +0.04%.

The Federal Reserve kept the federal funds rate in the 3.5-3.75% range, but the decision revealed an unprecedented split within the leadership. The 8-4 vote became the largest internal protest since 1992: one official demanded an immediate rate cut, while three others opposed any signals of easing. The regulator directly linked the high uncertainty to the ongoing conflict in Iran, which threatens price stability. Jerome Powell confirmed he will remain on the Board of Governors after his term as Chair ends, ensuring continuity during the crisis.

Markets interpreted the meeting as a sign that the period of tight policy may last longer due to deep disagreements within the Committee itself. The Canadian dollar (CAD) stabilized at 1.37 per U.S. dollar after synchronized decisions by the Bank of Canada (BoC) and the Fed to maintain current monetary‑policy settings. The Canadian regulator kept the rate at 2.25%, noting that although gasoline and food prices are pushing inflation toward 3%, long‑term expectations remain anchored. Meanwhile, the U.S. dollar received safe‑haven support due to the lack of progress in negotiations between Washington and Tehran.

On Wednesday, European markets closed in the red for the eighth consecutive session. Germany’s DAX (DE40) fell by -0.27%, France’s CAC 40 (FR40) closed down -0.39%, Spain’s IBEX 35 (ES35) dropped by -0.74%, and the UK’s FTSE 100 (UK100) ended the session down -1.16%. The European banking sector showed resilience thanks to strong earnings from HSBC, whose shares rose 3.5% after announcing a buyback and high profits. Today, investors await tomorrow’s decisions from the Bank of England and the ECB. Given the record jump in eurozone inflation expectations to 4%, market participants fear that Christine Lagarde may take a more hawkish stance than previously expected. Fresh inflation data complicates the situation for the European regulator: Germany’s rate rose to 2.9%, and Spain’s to 3.5%, the highest in two years. The UAE’s exit from OPEC has added volatility to commodity markets but has not yet pushed WTI oil below 100 dollars per barrel.

On Wednesday, WTI oil prices surged more than 7%, exceeding 107 dollars per barrel. The sharp jump was triggered by Donald Trump’s statement that the naval blockade of Iran will continue until a new nuclear deal is reached, eliminating any remaining hope for reopening the Strait of Hormuz. The situation is worsened by the UAE’s exit from OPEC and U.S. data showing a critical drop in inventories amid record exports above 6 million barrels per day. The enormous demand for U.S. crude confirms a global supply deficit caused by the paralysis of Middle Eastern logistics, pushing prices to new multi‑year highs.

In Asia, Japan’s Nikkei 225 (JP225) did not trade yesterday, China’s FTSE China A50 (CHA50) rose by +0.79%, Hong Kong’s Hang Seng (HK50) closed up +1.68%, and Australia’s ASX 200 (AU200) fell by -0.27%.

The offshore yuan stabilized at 6.84 per dollar, preparing to end the month in positive territory thanks to unexpectedly strong Chinese data. Despite global instability, China’s manufacturing sector showed impressive resilience: the private PMI jumped to 52.2, the highest since late 2020, and the official index remained in expansion territory for the second month (50.3). The country’s economy is effectively cushioning the Middle East crisis through strategic oil reserves and an aggressive shift toward renewable energy. Markets are now focused on Donald Trump’s upcoming visit to China on May 14-15.

The New Zealand dollar (NZD) stabilized at 0.583, attempting to recover after falling to a three‑week low. The kiwi weakened due to a sharp revision of expectations for the RBNZ rate decision: after comments from Anna Breman about stable core inflation, the probability of a May rate hike fell from 60% to 45%. The situation is worsened by the business climate, which in April turned negative for the first time in three years amid the energy shock and falling exporter profits. The future of the kiwi now depends entirely on whether recession fears outweigh the need to fight inflation at the upcoming central‑bank meeting.

On Tuesday, the US stock market declined. By the end of the day, the Dow Jones Index (US30) fell by 0.05%. The S&P 500 Index (US500) dropped by 0.49%. The Tech Index Nasdaq (US100) closed lower by 1.01%. The main blow to the artificial‑intelligence sector came from The Wall Street Journal’s reports about slowing growth at OpenAI. The company’s revenue and user inflows came in below expectations, raising doubts about the payback of massive spending on computing power. This news triggered a sell‑off in the semiconductor sector: Broadcom plunged more than 4%, AMD lost 3%, and market leader Nvidia fell by 1.5%. Oracle and Intel also closed in the red, losing 3% and 1% respectively. Tech giants Meta, Microsoft, and Alphabet traded in negative territory amid nervousness ahead of their earnings releases.

Tuesday marked the seventh consecutive day of decline for European markets. By the end of the day, Germany’s DAX (DE40) fell by 0.27%, France’s CAC 40 (FR40) closed down 0.46%, Spain’s IBEX 35 (ES35) rose by 0.46%, and the UK’s FTSE 100 (UK100) closed up 0.11%. The main fear for investors remains the threat of stagflation: a combination of a stalling economy and sky‑high prices for imported energy, which continue to rise despite the sensational exit of the UAE from OPEC and OPEC+.

WTI oil prices have consolidated at 100 dollars per barrel, rising for the seventh consecutive session. The market reached April highs despite the headline event – the UAE’s withdrawal from OPEC and OPEC+. This move by Abu Dhabi, aimed at gaining production freedom, has not cooled prices because any additional oil volumes cannot be delivered to consumers due to paralyzed logistics. The ninth week of the conflict has turned the Strait of Hormuz into a “dead zone”: whereas it previously carried 20% of global oil traffic, vessel movement is now nearly zero. The mutual naval blockade by the US and Iran has created an unprecedented supply deficit that outweighs any news about OPEC disunity. As Washington and Tehran exchange ultimatums, the global economy continues to balance on the edge of a stagflationary shock.

Silver prices (XAG) collapsed by more than 3%, falling to 73 dollars per ounce – the lowest level in a month. The sharp drop was triggered by the failure of another diplomatic attempt: US officials confirmed that Donald Trump rejected Iran’s “Pakistan proposal.” This decision shattered hopes for a quick reopening of the Strait of Hormuz and stabilization of the energy market. The situation creates a paradox for precious metals. On one hand, 100‑dollar oil fuels inflation, which investors traditionally hedge with silver and gold. On the other hand, the same inflation forces central banks to prepare for a new tightening cycle. Since silver does not generate interest income, the prospect of “high rates for longer” makes it less attractive compared to government bonds.

In Asia, Japan’s Nikkei 225 (JP225) fell by 1.02%, China’s FTSE China A50 (CHA50) slipped by 0.01%, Hong Kong’s Hang Seng (HK50) closed down 0.95%, and Australia’s ASX 200 (AU200) declined by 0.64%.

The Australian dollar (AUD) corrected below 0.72 USD but remains near four‑year highs. The main support factor is record inflation, which reached 4.6% in March due to a sharp rise in fuel prices amid the Strait of Hormuz blockade. Markets have almost fully priced in a 25‑basis‑point rate hike by the Reserve Bank of Australia next week. The slight decline in the currency was caused by inflation data coming in slightly below the most pessimistic projections, as well as general risk aversion among investors. While major G7 central banks prepare to pause, the Australian regulator is forced to act aggressively to contain the price shock.

The New Zealand dollar (NZD) lost recent gains on Tuesday, falling to 0.588 USD. After the release of high Q1 inflation data, the probability of a rate hike by the Reserve Bank of New Zealand (RBNZ) at the May meeting is estimated by the market at more than 60%. Inflationary pressure is expected to intensify further in Q2, as current extremely high fuel costs begin to be fully reflected in the statistics.

On Monday, the US stock market showed mixed dynamics. By the end of the day, the Dow Jones Index (US30) fell by 0.13%. The S&P 500 Index (US500) rose by 0.12%. The Tech Index NASDAQ (US100) closed higher on Friday by 0.20%. Investors are balancing between expectations for tech‑giant earnings and worrying signals from the energy market, where oil prices added another 2% despite diplomatic maneuvering around the Strait of Hormuz. The high‑tech sector became the main engine of growth, fueled by the AI and microchip frenzy: Nvidia jumped 4%, reinforcing its status as the favorite in the AI race ahead of key earnings this week. Investors are preparing for a “super‑week” that will set the trend for the entire next month. The main events will be central‑bank meetings led by the US Federal Reserve, as well as financial results from Microsoft, Amazon, and Meta. While the tech sector and financial companies show resilience, allowing indices to remain near record highs, inflation risks linked to the ninth week of the oil shock remain the main barrier to broad market growth.

The Mexican peso (MXN) retreated from its six‑month highs, stabilizing at 17.4 per US dollar. The main driver of the currency’s weakness was fresh inflation data that came in below expectations, giving the Bank of Mexico room for further monetary easing. Annual inflation in Mexico in the first half of April slowed to 4.53%. Even more notable was the decline in core inflation to a five‑month low of 4.27%. These figures confirm that the regulator’s recent unexpected decision to cut rates to 6.75% (a four‑year low) was justified and aimed at supporting domestic growth.

European stock markets continue a prolonged decline: Monday marked the sixth consecutive session of losses. By the end of the day, Germany’s DAX (DE40) fell by 0.19%, France’s CAC 40 (FR40) closed down 0.19%, Spain’s IBEX 35 (ES35) rose by 0.01%, and the UK’s FTSE 100 (UK100) ended the session down 0.56%. Although news of a new diplomatic proposal from Iran via Pakistani intermediaries brought a glimmer of hope, the actual situation in the Strait of Hormuz remains deadlocked. Oil and gas shipments remain paralyzed, keeping fuel prices at levels that threaten Eurozone price stability. Under these conditions, traders are almost certain that the ECB will keep rates unchanged this week, and a significant part of the market is pricing in further rate hikes this quarter to contain inflationary risks.

On Monday, the oil market was hit by a new wave of volatility: WTI prices jumped more than 2%, reaching 96.5 dollars per barrel. The dramatic rise in prices is driven by the effective paralysis of the Strait of Hormuz – a key global energy artery. Despite the formal ceasefire in place since early April, mutual naval blockades have nearly halted tanker traffic in the region. The situation is worsened by the diplomatic deadlock between Washington and Tehran. The IEA describes the current events as the most unprecedented supply shock in the history of observations. The ninth week of the conflict has led not only to raw‑material shortages in key markets but also to rising risks of a global recession.

In Asia, Japan’s Nikkei 225 (JP225) rose by 1.38%, China’s FTSE China A50 (CHA50) fell by 0.43%, Hong Kong’s Hang Seng (HK50) closed down 0.20%, and Australia’s ASX 200 (AU200) declined by 0.23%. The labor‑market situation in New Zealand in March 2026 showed temporary resilience: employment rose by 0.3%, reaching a 14‑month high of 2.35 million people. This increase was the result of the delayed effect of low interest rates that previously supported businesses, but the overall picture remains troubling. Despite recovering 14,600 jobs since last summer, current employment levels are still 39,000 below those of two years ago. But the positive March dynamics are already facing severe macroeconomic challenges. The sharp rise in fuel prices caused by the ninth week of the Strait of Hormuz conflict has begun to undermine economic activity at the end of Q1. Business confidence in the country has collapsed to mid‑2024 lows, as rising costs erode company profits and force them to begin cutting staff.

By the end of the day, the Dow Jones Index (US30) fell by 0.16% (weekly result -0.39%). The S&P 500 Index (US500) rose by 0.80% (weekly result +0.67%). The Tech Index NASDAQ (US100) closed higher on Friday by 1.95% (weekly result +2.41%). This week, the Federal Reserve is expected to keep the federal funds rate in the 3.50-3.75% range while the regulator analyzes new inflation risks caused by the surge in oil prices. This meeting will be symbolic, as it will likely be Jerome Powell’s last as Fed Chair before his term ends on May 15. Analysts expect cautious rhetoric and a signal that the rate‑cutting cycle will be paused until the new Chair officially takes office.

The US economic calendar will also include key data, most notably the preliminary estimate of Q1 GDP. Growth is expected to accelerate sharply to 2.1% compared to the modest 0.5% at the end of last year, though experts warn this may be temporary due to one‑off increases in government spending. Investors will also closely watch the PCE Index – the Fed’s preferred inflation gauge. Core prices in March are expected to rise by 0.3%, slightly below February’s reading, while personal spending is projected to increase by 0.9%.

In Canada, the Bank of Canada is expected to keep its rate at 2.25% this week, closely monitoring the impact of the Strait of Hormuz conflict on the national economy.

On Friday, Germany’s DAX (DE40) fell by 0.11% (weekly -1.05%), France’s CAC 40 (FR40) closed down 0.84% (weekly -1.88%), Spain’s IBEX 35 (ES35) dropped by 1.09% (weekly -3.11%), and the UK’s FTSE 100 (UK100) ended the session down 0.75% (weekly -2.71%). Europe faces a busy week with major central‑bank decisions and key GDP and inflation releases. The focus will be on the ECB meeting, where analysts expect rates to remain unchanged. However, the hawkish tone from Christine Lagarde and Isabel Schnabel suggests the pause may be temporary. The main source of concern will be the Eurozone inflation report. April inflation is expected to reach 2.9% – the highest in two and a half years. The primary driver is energy prices, which may show double‑digit growth due to the blockade of the Strait of Hormuz and the conflict in Iran. Against this backdrop, Q1 2026 GDP data is expected to confirm a very fragile recovery. The projected 0.2% growth for the Eurozone looks weak. In the UK, analysts expect the BoE to keep rates at 3.75%, though internal disagreement within the Monetary Policy Committee is possible.

Iran has expressed readiness to extend the temporary ceasefire and resume shipping in the Strait of Hormuz. In exchange, Tehran demands the lifting of the US naval blockade of its ports, offering to move nuclear‑program discussions into a separate negotiation track. This led to a decline in WTI prices to 95 dollars per barrel after a brief spike to 96.7 dollars. Despite Monday’s local pullback, Brent and WTI remain at extremely high levels, fueling global inflation and forcing central banks to reconsider their strategies in favor of further tightening.

The US natural‑gas prices (XNG) continued to fall, dropping by 3.6% to 2.52 dollars per MMBtu, hitting new lows not seen since October 2024. The main pressure factor remains the unusually mild spring, which has nearly eliminated heating demand while cooling demand has not yet begun. As a result, storage injections have accelerated significantly: as of April 24, inventories exceeded the seasonal norm by 8%, one percentage point higher than the previous week. The market shows a persistent bearish trend despite producers’ attempts to stabilize the situation. Over the past 18 days, US gas production has fallen by 4.1 billion cubic feet per day, reaching an 11‑year low of 108.1 billion cubic feet.

In Asia, Japan’s Nikkei 225 (JP225) rose by 1.52% for the week, China’s FTSE China A50 (CHA50) gained 0.50%, Hong Kong’s Hang Seng (HK50) closed the week down 0.86%, and Australia’s ASX 200 (AU200) slipped by 0.08%.

The Asia‑Pacific region enters a week of high volatility, with inflationary pressure and industrial‑sector resilience as key themes. In China, investors await PMI data, which is expected to show slowing factory‑activity growth. Meanwhile, from April 27 to 30, the Standing Committee of the National People’s Congress will meet to set legislative priorities amid global instability. These political signals, combined with corporate earnings reports, will shape the dynamics of the yuan and mainland Chinese stock markets.

Australia is preparing for troubling inflation news. Analysts prognose a sharp jump in annual inflation to 4.7% (from 3.7% the previous month), significantly increasing pressure on the RBA. Producer‑price data and commodity‑cost dynamics will reveal how deeply the energy shock has penetrated the country’s economic structure and whether another round of monetary tightening should be expected.