Australia seeks fuel security in Singapore as Hormuz disruption hits supplyJapan wholesale inflation jumps as BOJ flags stagflation risk from oil shockJapan to release more oil reserves, shift supply away from Hormuz routesChina inflation turns but signals “bad inflation” as energy costs rise and demand lagsBoJ flags stagflation risk if Middle East shock deepens, but says Japan not there yet.Japan finmin Katayama: govt ready to take decisive action but won’t elaborateChina March 2026 CPI 1.0% y/y (expected 1.2%) PPI 0.5% y/y (expected 0.4%)PBOC sets USD/ CNY reference rate for today at 6.8654 (vs. estimate at 6.8313)Bank of Korea holds policy rate at 2.5%, as expected.Powell, Bessent flag systemic risk from advanced AI modelsADB warns Asia growth to slow sharply if Middle East disruptions persistJapan’s Katayama signals no urgency on oil risks, backs G7 stance on conflictJapan data, March PPI 2.6% y/y (expected 2.4%, prior 2%)Massive Dos Bocas fire adds refining risk. Mexico’s flagship refinery stays below capacityZandi warns payrolls mislead, VCI signals rising US recession risk (what's VCI, you ask?)NZ PMI stays in expansion but confidence drops sharply as global risks build.Warsh Fed hearing delayed by paperwork holdup (Powell set to stay longer?)White House warns staff not to bet on Iran war, raises (lack of) ethics concernsTrump touts oil flow recovery, but Hormuz chaos tells another storyTrump warns Iran over Hormuz transit fees as shipping tensions escalateIMF warns Iran war fuels inflation surge and global growth slowdowninvestingLive Americas market news wrap: Steps toward ceasefire in Lebanon lift the moodSummary:Iran denies Islamabad talks, pushing back on WSJ report and linking talks to Lebanon ceasefire Japan’s Katayama escalates FX rhetoric, flags readiness for intervention Fed leadership timeline slips as Warsh hearing delayed → policy continuity BoJ flags stagflation risk if Middle East shock persists South Korea holds rates amid inflation-growth trade-off China data confirms “bad inflation” dynamic (PPI up, CPI soft) Markets steady: Asia equities firmer, USD slightly stronger, oil rangeboundIranian state media denied that a delegation had arrived in Islamabad for weekend talks with the U.S., pushing back on earlier reporting and reiterating that Tehran has no plans to engage until a ceasefire is established in Lebanon. The denial reinforces the theme of conflicting signals around diplomacy, keeping uncertainty elevated despite the broader ceasefire backdrop.In Japan, Finance Minister Katayama stepped up verbal intervention, warning authorities are prepared to act “on all fronts” against market moves, citing heightened speculative activity across crude oil and FX. The rhetoric signals growing discomfort with currency volatility, though no concrete measures were outlined.On the Fed front, the Senate Banking Committee dropped plans for a hearing on nominee Kevin Warsh next week due to missing paperwork, effectively delaying the confirmation timeline. The development points to continued leadership continuity for now, removing a near-term policy uncertainty.Central bank messaging across Asia continues to reflect the same core dilemma. Bank of Japan Deputy Governor Himino said Japan is not currently in stagflation but warned that a prolonged Middle East conflict could push up inflation while weighing on growth. Similarly, South Korea’s central bank held rates steady, maintaining a cautious stance as policymakers balance rising price pressures against downside risks to activity.China’s latest data reinforced the emerging inflation narrative. Producer prices returned to growth (+0.5% y/y), ending a multi-year deflation streak, while consumer inflation undershot expectations (+1.0% y/y), highlighting the divergence between rising input costs and weak domestic demand.Markets were relatively steady. Asia-Pacific equities were mostly firmer, extending gains seen on Wall Street following ceasefire optimism, despite sporadic flare-ups. The US dollar edged higher, while major pairs were broadly stable. Oil traded in a tight range and gold was little changed, suggesting markets remain in a holding pattern as geopolitical uncertainty persists. This article was written by Eamonn Sheridan at investinglive.com.

Australia turns to Singapore for fuel security as Hormuz disruption tightens supply.Summary:PM Anthony Albanese in Singapore to secure fuel supply amid Hormuz disruption Singapore supplies ~55% of Australia’s petrol imports (South Korea supplies ~22% and India~11.5%) Australia imports ~84% of refined fuel, highlighting vulnerability Domestic diesel shortages already impacting mining and agriculture Singapore refining hub also under strain due to crude supply disruption Australia supplying ~1/3 of Singapore’s LNG, reinforcing mutual dependency Broader regional coordination underway as Asia scrambles for energy security Australia is intensifying efforts to secure fuel supplies as the disruption to global energy flows caused by the Middle East conflict exposes the country’s heavy reliance on imported refined products.Prime Minister Anthony Albanese is in Singapore for high-level talks with his counterpart Lawrence Wong, with energy security at the top of the agenda. The visit underscores the strategic importance of Singapore, which serves as Australia’s largest supplier of petrol and a key provider of diesel and jet fuel.The timing reflects growing urgency. With the Strait of Hormuz effectively shut and shipping activity still severely constrained despite a fragile ceasefire, supply chains across Asia remain under pressure. For Australia, the risks are particularly acute given its limited domestic refining capacity and high dependence on imports.Australia consumes roughly one million barrels of oil per day and imports the vast majority of its refined fuel needs. Over time, domestic refining capacity has declined sharply, leaving Australia reliant on regional hubs such as Singapore. Recent data shows that more than half of Australia’s petrol imports originate from Singapore alone, with additional supply coming from South Korea and India.The strain is already being felt domestically. Tight diesel supplies, critical for transport, mining, and agriculture, are beginning to impact key sectors of the economy. Australia’s geographic scale and distribution challenges amplify these pressures, making supply disruptions more difficult to manage.Singapore, while a critical partner, is not immune to the broader shock. As one of Asia’s largest refining centres, it depends on crude flows that have been disrupted by the conflict, limiting its ability to fully offset shortages elsewhere in the region.The relationship between the two countries is mutually reinforcing. Australia supplies a significant share of Singapore’s liquefied natural gas imports, creating a degree of interdependence that policymakers are now leaning on in a period of heightened stress.Canberra has also expanded engagement across the region, holding discussions with multiple Asian partners to diversify supply sources and ensure continuity.In effect, the episode highlights a structural vulnerability: Australia’s exposure to external supply shocks in refined fuels. While diplomatic efforts may ease near-term pressures, the broader lesson points to the importance of supply diversification and resilience in an increasingly fragmented global energy landscape. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s wholesale inflation surge highlights rising cost pressures, with the BoJ warning of potential stagflation risks amid the Iran-driven energy shock.Summary:Japan wholesale inflation (CGPI) rises 2.6% y/y, above expectations Input costs surge, with import prices jumping 7.9% y/y Broad-based price pressures driven by oil, metals, chemicals BOJ flags vigilance on stagflation risk but says Japan not there yet Markets price ~60% chance of rate hike at April meeting Iran war complicates policy: higher inflation vs weaker growth Consumer confidence deteriorating sharply, adding downside risk Japan’s wholesale inflation accelerated in March, reinforcing signs that cost pressures are broadening across the economy and sharpening the policy challenge for the Bank of Japan as it weighs its next move.The corporate goods price index rose 2.6% year-on-year, exceeding expectations and picking up from the prior month, while monthly price growth also strengthened. The data points to a widening pass-through of higher input costs, with firms raising prices across sectors including machinery and food as energy, metals and chemical costs climb. A key driver has been the sharp rise in import prices, which surged nearly 8% year-on-year. This reflects the impact of the Iran conflict on global energy markets, with oil prices rising significantly amid disruption to flows through the Strait of Hormuz. For Japan, which remains heavily dependent on imported fuel, the shock is feeding quickly into upstream pricing.Financial markets have responded by pushing yields higher, with shorter-dated government bond yields hitting record levels. Rate expectations have also shifted, with investors now assigning a meaningful probability to a near-term policy tightening.However, the policy outlook is far from straightforward. Bank of Japan Deputy Governor Ryozo Himino stressed that the economy is not currently in stagflation, noting that inflation remains around target and growth is still holding above potential. Nevertheless, he acknowledged that a prolonged conflict could create a difficult trade-off, with rising inflation coinciding with weakening economic activity.This dilemma is already beginning to take shape. While price pressures are building, consumer sentiment has deteriorated sharply, reflecting the strain of higher fuel costs on households. This suggests that the inflation impulse is being driven more by external shocks than by strong domestic demand.For the BoJ, the path forward hinges on how persistent the current shock proves to be. A temporary spike in costs may not warrant aggressive tightening, but a sustained period of elevated energy prices could push inflation higher while eroding growth—forcing a more complex policy response.In short, Japan is not yet in stagflation, but the risks are rising, and the central bank is increasingly navigating a narrow path between inflation control and economic support. This article was written by Eamonn Sheridan at investinglive.com.

Japan expands oil reserve releases and diversifies supply routes to mitigate Middle East disruption risks.Summary:Japan to release an additional 20 days of oil reserves from May Follows earlier 50-day release initiated in March Total reserves remain substantial at ~230 days Tokyo aims to source over 50% of imports outside Hormuz routes Diversifying supply across US, Latin America, Africa, and Asia Prioritising fuel allocation to critical sectors Move highlights growing energy security concerns amid Middle East disruptionJapan is stepping up efforts to safeguard its energy security, announcing plans to release an additional 20 days’ worth of oil from strategic reserves as it seeks to offset risks stemming from the Middle East conflict.Prime Minister Sanae Takaichi said the extra release will begin in May, adding to the 50 days of reserves already being made available since mid-March. The move is designed to stabilise domestic supply conditions while the government accelerates efforts to diversify import routes away from the Strait of Hormuz, a key chokepoint that has been heavily disrupted during the conflict.Despite the drawdown, Japan remains well-buffered. As of early April, the country held reserves equivalent to roughly 230 days of consumption, including a significant public stockpile. This provides policymakers with flexibility to manage short-term supply shocks without immediately compromising long-term energy security.A central pillar of the strategy is reducing reliance on Hormuz-linked supply routes. By May, Japan expects to secure more than half of its oil imports via alternative pathways, including shipments routed through ports on the Red Sea and the UAE that bypass the strait. At the same time, Tokyo has broadened its supplier base, reaching out to producers across the United States, Southeast Asia, Central Asia, Latin America, and Africa.The diversification push reflects Japan’s heavy dependence on Middle Eastern crude, which typically accounts for around 95% of imports. The current conflict has exposed the vulnerability of that concentration, particularly as disruptions to shipping flows and elevated insurance costs complicate logistics.Domestically, the government is also taking steps to manage distribution. Suppliers have been asked to prioritise deliveries to critical sectors such as healthcare, transportation, agriculture, and fisheries, ensuring that essential services remain insulated from supply disruptions.For markets, the significance of the move lies less in the immediate volume of oil released and more in what it signals. Japan is effectively shifting into energy-contingency mode, using reserves as a bridge while reconfiguring supply chains. This reinforces the broader narrative of tightening global energy logistics, even as countries with sufficient stockpiles attempt to cushion the impact. This article was written by Eamonn Sheridan at investinglive.com.

China exits factory-gate deflation, but weak consumer demand and rising energy costs highlight an uneven and fragile inflation backdrop.Summary:China PPI turns positive at +0.5% y/y, ending multi-year deflation CPI soft at +1.0% y/y, below expectations and slowing from prior Confirms earlier theme: imported energy inflation vs weak domestic demand Oil shock from Iran war driving factory-gate price rebound Japan CGPI accelerates to +2.6% y/y, import prices surge +7.9% y/y Highlights Asia-wide inflation impulse from energy, not demand Raises risk of “bad inflation” squeezing margins and consumptionChina’s March inflation data confirms a key turning point in its price cycle, with factory-gate prices returning to growth for the first time in over three years, even as consumer inflation remains subdued, underscoring the uneven nature of the current inflation impulse.Producer prices rose 0.5% year-on-year, breaking a prolonged period of deflation and marking a notable shift in the pricing environment. The rebound aligns with earlier signals that rising global energy costs, driven by the Iran conflict, are feeding through into industrial input prices. Oil markets have surged sharply since late February, with benchmark crude prices climbing significantly, creating a clear channel for imported inflation into China’s manufacturing sector.However, the consumer side tells a different story. Consumer inflation slowed to 1.0% year-on-year, missing expectations and easing from the prior month. This divergence highlights a critical imbalance: while upstream costs are rising, domestic demand remains relatively soft, limiting the pass-through to consumers.This dynamic reinforces the concept of “bad inflation”, price increases driven by supply shocks rather than strong economic activity. For Chinese manufacturers, this is particularly challenging, as higher input costs squeeze already thin profit margins without the offset of stronger demand.The data also fits into a broader regional pattern. In Japan, wholesale inflation accelerated more sharply, with corporate goods prices rising 2.6% year-on-year and import prices surging nearly 8%. This suggests that the energy-driven inflation impulse is being felt across Asia, though with varying degrees of transmission depending on domestic conditions.China’s position is somewhat more resilient relative to peers, supported by strategic energy reserves and diversified import sources. Even so, the outlook is becoming more complex. While the return of positive producer price growth may signal an exit from deflation, it does not necessarily point to a healthy recovery.Policymakers face a delicate balance. The inflation impulse reduces the urgency for aggressive monetary easing, while growth risks remain tilted to the downside, particularly if energy prices stay elevated. Recent adjustments to domestic fuel prices indicate that authorities are already allowing some of the external cost pressures to feed through.In essence, China is moving out of deflation, but into a less favourable inflation regime driven by external shocks rather than domestic strength, complicating both the growth outlook and policy response. This article was written by Eamonn Sheridan at investinglive.com.

Summary:BoJ’s Himino says Japan not currently in stagflation Warns prolonged Middle East conflict could create stagflation-like conditions Highlights policy dilemma: weaker growth vs rising inflation BoJ to assess scale and duration of shock before adjusting policy Reaffirms data-dependent approach at each meeting Signals flexibility, but no shift away from inflation target Bank of Japan Deputy Governor Ryozo Himino signalled a cautious but flexible policy stance, warning that a prolonged Middle East conflict could create difficult trade-offs for policymakers, even as he downplayed the risk of stagflation in Japan for now.Speaking in parliament, Himino emphasised that there is no strict definition of stagflation, but made clear that Japan’s current economic conditions do not fit that description. Inflation remains around the central bank’s 2% target, while economic growth is still running above potential, suggesting that the economy remains on relatively stable footing despite rising global risks.However, the outlook is becoming more uncertain. Himino warned that if the conflict in the Middle East persists, it could simultaneously weaken growth and push inflation higher—creating a policy dilemma for the central bank. Such a scenario would complicate decision-making, as traditional policy responses to inflation and growth shocks can pull in opposite directions.The key variable, according to Himino, is the scale and duration of the external shock. A short-lived disruption may have limited impact, but a prolonged period of elevated energy prices and supply uncertainty could materially alter Japan’s economic trajectory. Given Japan’s heavy reliance on imported energy, sustained price increases would feed directly into inflation while weighing on household consumption and corporate margins.Despite these risks, Himino reaffirmed that the BoJ will remain focused on achieving its inflation target in a stable and sustainable manner. Rather than pre-emptively adjusting policy, the central bank will continue to assess incoming data at each meeting, updating its forecasts and risk assessments as conditions evolve.This underscores a data-dependent approach at a time when the global environment remains highly fluid. The BoJ appears to be positioning itself to respond flexibly, balancing the need to support growth against the risk of inflation overshooting due to external shocks.In essence, while Japan is not currently facing stagflation, the risk is no longer theoretical. The trajectory of the Middle East conflict—and its impact on energy markets—will be critical in shaping the BoJ’s policy path in the months ahead.---The comments reinforce a cautious BoJ stance, with flexibility preserved. The acknowledgment of a potential stagflation dilemma may limit aggressive tightening expectations while keeping focus on energy-driven inflation risks and yen sensitivity. This article was written by Eamonn Sheridan at investinglive.com.

Japan finmin Katayama: Govt ready to take action on all fronts vs markets We are of the view that speculative action is heightening in crude oil, futures and FX markets I have been saying govt ready to take decisive action but won’t elaborate on future responseVerbal intervention effort. This article was written by Eamonn Sheridan at investinglive.com.

China inflation. PPI first positive y/y since September of 2022.I'll have more to come on this separately, detail, analysis etc. .. Here: China inflation turns but signals “bad inflation” as energy costs rise and demand lagsPPI m/m +1% This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate.PBOC injects 2bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%. This article was written by Eamonn Sheridan at investinglive.com.

Bank of Korea, the South Korean central bank, kept its policy interest rate steady at 2.5%, as expected.Eyeing fuel and domestic inflation, growth risks. Governor Rhee Chang-yong will hold a press conference at 0210 GMT. This article was written by Eamonn Sheridan at investinglive.com.

US regulators convene major banks over AI-driven cyber risks, highlighting growing concern over systemic vulnerabilities.Info via Bloomberg (gated).Summary:US Treasury Secretary Scott Bessent and Fed Chair Jerome Powell held urgent meeting with major banks Focus: cyber risks tied to advanced AI model “Mythos” Model reportedly capable of identifying and exploiting system vulnerabilities Regulators see AI-driven cyber threats as a top financial stability risk Systemically important banks urged to strengthen defences Controlled rollout via “Project Glasswing” to limit risk exposure Highlights emerging intersection of AI capability and systemic financial riskUS financial authorities have moved swiftly to address a growing threat at the intersection of artificial intelligence and financial stability, convening an urgent meeting with major Wall Street banks to assess emerging cyber risks.Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell brought together senior executives from the largest US banks in Washington this week, underscoring the seriousness with which regulators are treating the issue. The focus of the discussions was a new generation of AI systems, particularly a model known as “Mythos,” which is believed to possess advanced capabilities in identifying and exploiting vulnerabilities across widely used software and infrastructure.The meeting, organised at short notice, reflects rising concern that increasingly sophisticated AI tools could materially alter the cyber threat landscape. Regulators are worried that such systems, if misused, could enable more effective and scalable attacks on financial institutions, raising the risk of systemic disruption.All banks involved in the discussions are considered systemically important, meaning any compromise of their systems could have far-reaching implications for the broader financial system. By bringing these institutions together, policymakers appear to be aiming for a coordinated and pre-emptive response rather than reacting after vulnerabilities are exploited.The concerns are not purely theoretical. The developers of the model have themselves acknowledged both its offensive and defensive cyber capabilities, and have taken steps to limit its release. Access has initially been restricted to a small group of major technology and financial firms as part of a controlled rollout designed to strengthen system resilience ahead of wider deployment.This initiative, referred to as “Project Glasswing,” is intended to ensure that critical infrastructure is hardened before similar technologies become more broadly available. It reflects a growing recognition that advances in AI are not just productivity-enhancing, but also introduce new classes of risk.The issue also intersects with broader tensions between the technology sector and policymakers. The company behind the model is reportedly engaged in a legal dispute with US authorities over its classification as a supply-chain risk, highlighting the complex regulatory environment surrounding cutting-edge AI development.Overall, the episode signals a shift in regulatory focus. Cybersecurity risks driven by AI are increasingly being treated not just as operational concerns, but as potential threats to financial stability itself. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. Earlier:ING turns bullish on Chinese yuan, shifts USD/CNY forecast lower to 6.70–7.05Yuan seen strengthening to 6.8 as China resilience offsets seasonal weaknessComing up:Economic and event calendar in Asia 10 April 2026. Chinese inflation, huge news expected!China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

ADB warns prolonged Middle East disruptions could significantly slow Asia growth and drive a sharp rise in inflation.Summary:ADB warns Asia-Pacific growth could slow sharply if Middle East disruptions persist Growth seen at 4.7% in 2026 under prolonged disruption vs ~5.1% baseline Region could lose 1.3pp of growth over 2026–27 if conflict drags on Inflation projected to surge to 5.6% under worst-case scenario Fragile ceasefire and Hormuz risks remain key uncertainty Energy shock seen as major threat to region’s economic trajectory Policy focus: inflation control, financial stability, energy diversification Developing Asia and the Pacific faces a meaningful slowdown in growth alongside a renewed inflation surge if disruptions linked to the Middle East conflict persist, according to the Asian Development Bank.In its latest outlook, the ADB warns that the region’s economic trajectory is increasingly tied to the duration and severity of energy supply disruptions. Under a scenario where instability continues through the third quarter, growth across the region is projected to slow to around 4.7% in 2026, down from 5.4% previously, while inflation could accelerate sharply to 5.6%.The risks extend beyond a single year. If the conflict drags on for a full 12 months, the ADB estimates the region could lose approximately 1.3 percentage points of growth across 2026 and 2027 combined. This would mark a significant setback for a region that has been a key engine of global economic expansion.The warning comes against a backdrop of a fragile ceasefire and ongoing uncertainty around energy flows, particularly through the Strait of Hormuz. The waterway typically handles around one-fifth of global oil trade, and any sustained disruption has already driven sharp increases in oil and gas prices, feeding directly into regional inflation pressures.The ADB emphasised that the current environment represents a major test for Asia’s growth model, which remains highly sensitive to imported energy costs and global trade conditions. While a shorter disruption would result in only a modest slowdown—with growth closer to 5.1% and inflation more contained—the probability of a prolonged shock appears to be rising.Officials highlighted that markets themselves are signalling scepticism about the durability of the ceasefire, adding to the difficulty of forecasting the outlook. The persistence of elevated energy prices and supply uncertainty is already tightening financial conditions and weighing on business and consumer confidence.In response, policymakers are being urged to prioritise inflation containment and financial stability in the near term, while accelerating longer-term efforts to diversify energy sources and improve efficiency. The broader message is clear: Asia’s growth outlook remains resilient, but increasingly vulnerable to external shocks, with the Middle East conflict now a central risk factor. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Japan FinMin Katayama downplays immediate oil shortage risks despite war backdrop Signals limited urgency on energy contingency measures for now G7 aligned that Middle East conflict must not be prolonged Highlights upcoming focus on critical minerals at G7 Plays down risks from private credit, no signs of systemic stress Uncertainty remains on domestic policy impact (food tax cutsJapan’s Finance Minister Satsuki Katayama delivered a wide-ranging set of remarks that collectively point to a cautious but steady policy stance, even as global risks tied to the Iran conflict continue to build.On energy, Katayama struck a notably measured tone, saying Japan is not currently in a position to discuss emergency measures to address potential oil shortages. The comment suggests that, despite elevated geopolitical tensions and ongoing disruption risks around the Strait of Hormuz, Tokyo does not yet see conditions as severe enough to warrant immediate intervention. This likely reflects Japan’s relatively robust strategic reserves and established contingency frameworks, even as the situation remains fluid.At the same time, Katayama underscored a shared international concern about the trajectory of the conflict. She noted that G7 finance ministers are aligned in their view that the Middle East situation should not be prolonged, highlighting a coordinated desire to limit economic fallout from sustained energy market disruption. The message reinforces the broader policy priority of containing inflationary pressures tied to oil and supply chains.Looking ahead, Katayama flagged that Japan will co-chair discussions on critical minerals on the sidelines of the upcoming G7 meeting. This signals a growing focus on supply chain resilience beyond energy, particularly in areas linked to industrial policy, technology, and the green transition. It also reflects the widening scope of economic security concerns among advanced economies.On financial stability, Katayama played down risks from private credit markets, stating that Japan has no significant exposure and that there is no indication of a broader crisis at present. While the topic will feature on the G7 agenda, his comments suggest policymakers are monitoring developments rather than reacting to immediate stress.Domestically, Katayama also acknowledged uncertainty around the potential impact of a food sales tax cut, indicating that its effect on prices is difficult to assess at this stage. This highlights the challenge policymakers face in calibrating fiscal measures amid volatile inflation dynamics.Taken together, the remarks paint a picture of cautious vigilance. Japan is not yet in crisis-response mode, but is actively engaged in global coordination and preparing for a range of potential outcomes as geopolitical and economic risks evolve. This article was written by Eamonn Sheridan at investinglive.com.

Japan March PPI 2.6% y/y expected 2.4%, prior 2%and 0.8% m/mexpected 0.9%, prior -0.1%I'll have more to come on this separately, details and implications.ADDED:Japan wholesale inflation jumps as BOJ flags stagflation risk from oil shock This article was written by Eamonn Sheridan at investinglive.com.

Dos Bocas matters less as a global crude-supply swing factor than as a refining and fuel-security risk. In today’s market, that still matters.Summary:Dos Bocas is Mexico’s flagship new refinery and a core part of Pemex’s energy self-sufficiency push. Nameplate capacity is about 340,000 bpd, but recent runs have been closer to roughly 205,000 bpd, or about 60% utilisation. That means a fire matters more for refined products and regional balances than for outright global crude supply. In the current backdrop of Iran-war supply anxiety and fragile refining chains, even a local disruption reinforces the broader bullish energy-risk narrative. This last point is an inference based on the refinery’s role and current underperformance. A reported major fire at Mexico’s Dos Bocas refinery lands at an awkward time for energy markets, not because the site is big enough on its own to reshape the global crude balance, but because it adds another layer of fragility to an already tense refining and supply backdrop.Dos Bocas, also known as the Olmeca refinery, is Pemex’s flagship downstream project in Tabasco and one of the most politically important energy assets in Mexico. The refinery was built to reduce Mexico’s dependence on imported fuels and sits at the heart of the country’s long-running push for greater fuel self-sufficiency. Its design capacity is around 340,000 barrels per day. The problem is that the plant has struggled to run anywhere near that level. Reuters reported last month that it processed about 205,000 bpd in January, while more recent operating data cited by OPIS showed February throughput near 205,234 bpd, or roughly 60.4% of capacity, after hitting a high of 263,402 bpd in December. That operating profile shapes how markets should think about any fire. This is not a Strait-of-Hormuz-style event. Even at full design rates, Dos Bocas is not large enough to materially change the global crude equation on its own. But it is important to Mexican fuel supply, to Pemex’s refining strategy, and to the broader story of whether Mexico can replace imported products with domestic output. It also comes after a deadly March fire outside the refinery that killed five people, although Pemex said operations were not affected in that earlier incident. In market terms, the bigger significance is cumulative. When geopolitical risk is already elevated and product markets are sensitive to refining outages, another disruption at an underperforming but strategically important refinery adds to the sense that the global energy system has less buffer than usual. That supports the refining-tightness narrative more than the outright crude-supply narrative. This is an inference, but it is the most sensible way to frame Dos Bocas in the current context. This article was written by Eamonn Sheridan at investinglive.com.

ICYMI: Zandi warns the labour market is weaker than payrolls suggest, with his VCI indicator signalling recession risks may already be materialising.Summary:Mark Zandi warns March payrolls overstate labour market strength Job growth weak when stripping out distortions and healthcare hiring Recession risks remain elevated, near “coin flip” odds New “Vicious Cycle Index (VCI)” suggests more labour slack than headline data VCI already triggered recession signal in January Indicator implies economy may already be in downturn, despite resilient surface dataMark Zandi (Chief Economist at Moody’s) cautions against reading too much into the strong March payrolls report, arguing that underlying labour market conditions are significantly weaker than headline figures suggest. The latest employment gain follows a distorted February decline caused by severe weather and strike activity, meaning the recent rebound largely reflects volatility rather than genuine strength.Looking through the noise, Zandi’s assessment is that job growth has been minimal over the past year. In fact, excluding healthcare—a sector that continues to add jobs steadily—the broader economy would likely be experiencing outright job losses. This points to a labour market that is far more fragile than commonly perceived.Crucially, this weakness comes before the full economic impact of the Iran conflict has been felt. Rising energy costs and heightened uncertainty are expected to add further strain, reinforcing downside risks.Zandi places recession probabilities at close to 50%, supported by both traditional models and newer indicators. Among these is a newly developed measure—the Vicious Cycle Index (VCI)—which he argues provides a more accurate read on labour market conditions in the current environment.The key takeaway from his analysis is that the labour market may already be deteriorating beneath the surface, with official data lagging reality. As such, the March payrolls strength should be heavily discounted when assessing the true trajectory of the economy. Simplified explanation: VCI and what it meansAt its core, the Vicious Cycle Index (VCI) is an upgraded version of a well-known recession signal (the Sahm Rule), designed to better reflect today’s labour market dynamics.Step-by-step intuition: The Sahm Rule says a recession is underway if unemployment rises quickly (by ~0.5 percentage points). The idea: rising unemployment → less spending → more layoffs → recession spiral. The problem today: Labour force participation (people choosing to work) has been shifting a lot. When fewer people are in the workforce, the unemployment rate can look artificially low—even if conditions are weakening. What the VCI does differently: It adjusts for this by using a longer-term (5-year) average participation rate instead of the current one. This helps capture “hidden weakness”, people dropping out of the workforce rather than showing up as unemployed. Why it matters now: The VCI is currently higher than the official unemployment rate suggests (~5%) It implies more slack in the labour market than headline data shows It has already triggered a recession signal based on historical thresholds Key implication: Even if unemployment looks stable, the labour market may already be weakening, just in a less visible way. This article was written by Eamonn Sheridan at investinglive.com.

US February PCE inflation 2.8% y/y vs 2.8% expectedUS initial jobless claims 219K vs 210K estimateUS final Q4 GDP +0.5% vs +0.7% expectedNetanyahu opens up direct negotiations with LebanonTrump will ask Netanyahu to reduce bombing in Lebanon to help negotiationsIran wants a complete ceasefire in Lebanon before negotiationsStatement from Iran's Supreme Leader: Iran not seeking war but will not forfeit rightsTrump: Optimistic for a peace dealIran Pres. frames cease-fire as strength, not surrenderSenior Lebanese official says advocating for temporary ceasefire to allow for talksUS February wholesale inventories +0.8% vs -0.4% expectedIran deputy foreign min: Any peace must include Lebanon, the coming hours are criticalMarkets:WTI crude oil up $4.47 to $98.90US 10-year yields down 1 bps to 4.28%Gold up $53 to $4796NZD leads, JPY lagsS&P 500 up 0.6%The early mood was worrisome as Iran dug in on the necessity of a ceasefire in Lebanon and threatened to walk away from negotiations if that doesn't happen. That helped to boost WTI as high as $102.70 in a move that was increasingly weighing on risk assets.The mood shifted after a report said Trump asked Netanyahu to cool it on Lebanon followed by Bibi announcing that he'd instructed the start of direct negotiations with Lebanon. For now, there appears to be an Israeli plan to keep up strikes during those negotiations and that may lead to Iran keeping the Strait closed.In general, the market's optimism comes from Trump, who highlighted 'no nuclear weapons' as his goal but also said the US military is looking forward to "its next conquest". This article was written by Adam Button at investinglive.com.

While the data is not really the focus there is some big news expected from Chinese wholesale inflation data for March. China’s prolonged battle with deflation may be nearing a turning point, with early signs suggesting a return to positive price growth across key indicators. Rising global energy costs and base effects are expected to lift factory-gate prices and broader inflation measures, although the recovery remains uneven.Recent survey data indicate China’s producer price index (PPI) likely returned to growth in March, rising around 0.5% year-on-year and ending a 41-month streak of declines. The rebound has been largely driven by higher global oil prices, supported by geopolitical tensions in the Middle East, firmer demand, and speculative activity. These factors have pushed up input costs for manufacturers, feeding into producer prices.In contrast, consumer inflation remains subdued. The consumer price index (CPI) is expected to ease slightly to around 1.2% year-on-year, reflecting softer demand following the Lunar New Year period. Food prices, particularly pork, have declined amid ample supply, while services inflation has also moderated.This divergence underscores a key challenge for China’s economy: rising costs driven by external factors alongside weak domestic demand. While a return to positive inflation may signal the end of the deflationary cycle, the composition of that inflation is less encouraging. Much of the price pressure stems from imported inflation, especially energy, which can squeeze corporate margins and weigh on household purchasing power.Even so, moving out of deflation is an important step toward stabilisation. Persistent deflation has reflected structural imbalances between supply and demand, and policymakers generally have more tools to manage rising prices than falling ones.Looking ahead, broader measures such as the GDP deflator are also expected to turn positive in early 2026, potentially marking the first sustained period of price expansion in several years. Authorities are likely to rely on a mix of policy tools, including administrative controls and fiscal support, while continuing structural reforms aimed at improving supply efficiency.Overall, China may be exiting deflation, but the recovery remains fragile, driven more by external cost pressures than a meaningful rebound in domestic demand. This article was written by Eamonn Sheridan at investinglive.com.

Closing changes:S&P 500 +0.6%Nasdaq Comp +0.8%Russel 2000 +0.6%DJIA +0.6%Toronto TSX Comp -0.4%There were some large divergences today. Amazon was up 5.5% on a report that it may sell its AI chips to other companies, making it a direct competitor to Nvidia. Meta also continued to gain, climbing 2.7% as the market digests its new LLM. In general it was the "AI swallows the world trade".On the other side of that was software, as the IGV ETF cracked to a fresh low on big losses in Service Now, Intuit, Adobe and Palo Alto Networks. This article was written by Adam Button at investinglive.com.