Global Economic Snapshot

• China Services PMI eases to 52.1 (prev. 56.7)
• China Manufacturing PMI at 50.8 (prev. 52.1)
• Japan Services PMI slips to 53.4 (prev. 53.8)
• Japan Manufacturing PMI cools to 51.6 (prev. 53.0)
• Tokyo Core CPI at 1.7% y/y, below 1.8% expected
• Australia Manufacturing PMI falls back into contraction at 49.8 (prev. 51.0)
• US Initial Jobless Claims at 202K vs 212K expected
• US Trade Balance at -57.3B vs -61.0B expected
• US Crude Inventories surge +5451K vs +814K expected
• US ISM Manufacturing at 52.7 vs 52.5 expected
• US Retail Sales +0.6% vs +0.5% expected
• US Consumer Confidence jumps to 91.8 vs 88.0 expected
• JOLTs Job Openings at 6.882M vs 6.918M estimate
• Eurozone Manufacturing PMI at 51.6 vs 51.4 prelim

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Trump Keeps Markets Guessing on Iran

Trump offered no new Iran signals, leaving markets cautious after the speech. He framed US operations as broadly successful, pointing to significant degradation of Iran’s military capabilities and suggesting the main objectives had largely been achieved. He also indicated that US involvement could wind down over the coming weeks, while preserving flexibility for further targeted strikes if needed.

Crucially, there was no meaningful update on reopening the Strait of Hormuz, leaving a key market-sensitive issue unresolved. Trump also said Iran may be seeking a ceasefire, but Tehran continues to deny any direct negotiations, underscoring the gap in messaging. With no confirmed update on US ground troop deployment, a major escalation risk was removed for now, but geopolitical risk remains embedded without a clear de-escalation framework.

Fed Signals Caution

Powell said policy is in a good place to wait and see how the situation plays out, while reiterating that the Fed is committed to getting inflation back to 2% on a sustained basis. He said tariffs are likely to create a one-time inflation increase of between 0.5% and 1.0% and stressed that the Fed tends to look through supply shocks while keeping close watch on inflation expectations.

Goolsbee warned that an oil surge could become “pretty serious” if it lasts, noting that gasoline spikes can feed into inflation expectations and make the policy path more difficult. Williams said monetary policy is well-positioned to manage risks, while Musalem said policy should hold for “some time” and flagged both hiking and cutting scenarios depending on how the shock evolves. Schmid struck the most hawkish tone, saying inflation is the more salient risk and that the Fed cannot assume oil-driven inflation will be transitory.

Strait Of Hormuz Risk Builds

FT reported that Gulf countries are reportedly exploring new pipelines to reduce reliance on the Strait of Hormuz, as Iran’s threat to the waterway raises vulnerability across the region. Saudi Arabia’s East-West pipeline is already acting as a relief valve, but it only offers about 7 million barrels per day, roughly one-third of the volume that passes through the Strait.

The wider problem is that pipeline alternatives are costly, politically messy, and slow to build, which means they cannot fully offset a disruption in the near term. Even so, the renewed focus suggests Gulf producers are thinking more seriously about contingency routes as the risk environment worsens.

IEA Warns of Deeper Supply Losses

IEA chief Fatih Birol said the oil crisis is worse than the 1970s shocks and the 2022 Russia-related disruption combined. He said around 40 key energy assets have been damaged in the Middle East, more than 12 million bpd of supply has already been lost, and the oil loss in April is expected to be twice that of March.

The most immediate pain point is jet fuel and diesel, with Asia already affected and Europe set to feel the impact into April and May. That keeps pressure on refined product markets even if crude volatility stabilizes, and it raises the odds of further strategic reserve releases.

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Market Highlights

• Tesla Q1 deliveries at 358K vs 372K expected.
• SpaceX reportedly in talks with Saudi PIF for a $5B anchor stake ahead of a 2026 IPO.
• Iran reiterates threat to close the Strait of Hormuz long-term for the US and Israel.
• European diesel futures surge to $200 per barrel amid supply disruption.
• Crude closes the week above $111.
• S&P 500 snaps a five-week losing streak to end in positive territory.

Disclaimer

The information in this article is for general information only and does not represent financial or investment advice. Markets are unpredictable, and past performance does not guarantee future results. Before making any financial decisions, please do your own research or consult a licensed financial advisor. We are not responsible for any loss or damage caused by reliance on this content.