The Federal Reserve held the federal funds rate at 3.50%–3.75% on March 18 by an 11–1 vote. The decision was expected, but the message shook Wall Street: the Dow plunged more than 750 points after Chair Jerome Powell admitted the Fed had “not made as much progress on inflation as hoped” and called the economic effects of the Iran conflict “uncertain.” The updated projections painted a complicated picture. The Fed raised its GDP growth forecast to 2.4% and its inflation outlook to 2.7% on both headline and core PCE. The median dot plot maintained one rate cut for 2026 and one more in 2027, but seven of 19 officials now see no cuts at all this year, up from six in December. Governor Stephen Miran was the sole dissenter, favoring a 25-basis-point cut — notably, Christopher Waller, who had also dissented in January, returned to the majority. Powell told reporters the Fed’s policy “is not on a preset course” and confirmed he would remain at the Fed at least through the DOJ investigation, serving as interim chair if Warsh is not confirmed by May 23. The backdrop was grim: 92,000 jobs lost in February, unemployment at 4.4%, Brent above $100 after the Strait of Hormuz blockade, and core PCE stuck at 3%. Ed Yardeni of Yardeni Research had pegged stagflation odds at 35%, calling the Iran conflict “the latest stress test of the U.S. economy’s resilience.” Goldman Sachs pushed its first-cut forecast to September, estimating each $10 rise in Brent trims GDP by 0.1 percentage point. Barclays projected just one reduction for the year. Chicago Fed President Austan Goolsbee described the situation as “exactly the kind of stagflationary environment that’s as uncomfortable as any that faces a central bank.” While institutional strategists parsed the dot plot and Powell’s language, the sentiment among active market practitioners reflected a more immediate conclusion. Tyler White, a trader with nine years of experience and founder of a trading community of over 30,000 members (tradingwithtyler.com), said the March 18 outcome confirmed what he had been telling his community: the Fed is in a policy dead end with no exit in sight. White sees the current situation as fundamentally different from anything the Fed has dealt with in the recent past. In his view, the crises of the last decade each presented the central bank with a clear binary choice. In 2018, it was a rate pause followed by a reversal. During COVID, the playbook was emergency QE and zero rates. In 2022–2023, the answer was aggressive hikes to crush inflation. Each time, the direction became obvious once the shock materialized. “Right now it’s a dead end. Stagflation,” White said. “The Fed needs to support the economy and hold rates at the same time. And that’s exactly what we saw on March 18: the Fed restraining rates with one hand and running QE with the other. It looks like panic.” White argued that the dot plot reinforced this diagnosis rather than resolved it. The fact that seven members now favor zero cuts while others still project easing tells him the committee is fractured in a way it hasn’t been since the pandemic. He described it not as healthy disagreement but as the absence of a shared framework — a central bank that has lost its internal compass because the standard models no longer produce clear answers. The 750-point Dow sell-off, in White’s reading, was not an overreaction but the market correctly processing what Powell could not say outright. “Powell tried to sound measured, but the market heard what it needed to hear: there is no relief coming anytime soon. Seven members see zero cuts this year — that’s not consensus, that’s a central bank that doesn’t know where it’s going.” White was particularly focused on the political dynamics surrounding the decision. With Trump publicly pushing for rate cuts, the DOJ investigating Powell, and Kevin Warsh waiting for Senate confirmation, the Fed chair is operating under pressure that extends well beyond monetary policy. White noted that this makes oil the single most important variable — not just for markets, but for Powell’s personal ability to justify holding rates. “The White House will pile even more pressure on the Fed,” White said. “But as long as oil stays elevated, Powell has a legitimate argument to hold. That’s the one card he can play. The question is whether he’ll still be there to play it after May.” For traders, White’s conclusion was blunt: the era of directional conviction is over, at least until the geopolitical picture clarifies. He told his community that the correct approach is to abandon trend-following entirely and instead work the range — buying support, selling resistance, and capturing volatility in both directions rather than betting on a breakout that may not come for weeks. “The traders who tried to guess the direction on March 18 got whipsawed. The ones who played both sides of the range navigated it well,” White said. “This market rewards discipline and adaptability, not conviction. Until the Strait of Hormuz situation is resolved or the Fed gives a clear signal, we are in a volatility regime, not a trend regime.” As of the March 18 close, the S&P 500 fell to 6,625 — a new 2026 low. Gold held above $5,300, Brent topped $109 intraday. Recession probability on prediction markets reached 37%. The next FOMC meeting is May 6–7. This article was written by IL Contributors at investinglive.com.

On possible release of more emergency oil reserves, "we are not there yet"However, it is definitely under considerationWe should prepare ourselves for volatile markets for some timeIf Strait of Hormuz is not reopened, we must prepare for significantly higher energy pricesWe estimate it will take approximately two years for overall oil production to reach pre-war levels againThe push for use of electric vehicles will increase faster than previously anticipatedIt looks like Japan will have to act in an isolated manner to push for their next round of emergency oil reserves release. With prices looking much calmer in the past week or so, you can bet that the US and Trump won't have as much appetite to force the issue this time around.As for the other comments, Birol is pretty much just stating the obvious for the most part. Even if the Strait of Hormuz reopens, it doesn't mean that supply issues will immediately get resolved. As mentioned before, it will be a slow trickle at best and it will take many more months for key energy facilities to run back at full capacity.In other words, it will take a long time before things actually normalise and that is assuming the war comes to an end and the strait is open for business in a meaningful way.And if not, the market optimism we're seeing here could really run into big trouble down the road with there being no change to the status quo on the Strait of Hormuz especially.Sure, more positive talks and a deal of sorts may look play well on the optics. But when the hard data hits, nothing will change for markets and the global economy until something changes on the Strait of Hormuz. That's the main thing still. This article was written by Justin Low at investinglive.com.

China signals loose policy, boosts fiscal and tech investment pushICYMI: IEA warns Europe may have ~6 weeks of jet fuelIndia ICYMI: RBI FX intervention intensifies, curbs refiners’ dollar buyingNZ PM Luxon rejects leadership challenge as political pressure builds - watch the kiwiPBOC sets USD/ CNY reference rate for today at 6.8622 (vs. estimate at 6.8206)Singapore exports surge on AI demand, beating forecastsJapan officials' 'no comment' when asked if BoJ hike delay could trigger sharp yen fallTrump pump again - says war in Iran "should be ending pretty soon"Bank of Japan Governor Ueda "no comment" on declining mkt expectations for April rate hikeTrump pump - says it'll be great for Hezbollah if they act nice and wellG7 warns on war’s economic risks, signals action on inflation, supply chainsUnverified reports Tehran plans to begin “initial steps” toward Bab al-Mandab blockNZ food prices fall, spending slows as RBNZ maintains cautious stanceECRI: Markets underestimating global inflation upswing beyond oilRBA breaks ranks, will hike again, as global central banks stay sidelined: RBCU.S. to delay weapons deliveries to Europe as Iran war strains stockpilesinvestingLive Americas market news wrap: Israel agrees to ceasefire in LebanonIran stresses need for full Israeli withdrawal from southern LebanonAt a glance:Mixed geopolitical signals: ceasefire talk offsets escalation risks (Bab al-Mandab threat unverified) Markets lean toward optimism on Trump ceasefire tone despite ongoing uncertainty BoJ flags oil-driven stagflation risk, keeps policy flexible and accommodative China reinforces easing bias and fiscal support; NZ political noise adds mild uncertainty FX subdued; equities softer as traders trim risk into weekendGeopoliticsGeopolitical headlines remained mixed, with tentative signs of de-escalation offset by lingering risks to key shipping routes.Iranian officials reiterated the need for a full Israeli withdrawal from southern Lebanon, while unverified reports suggested Tehran could begin “initial steps” toward blocking the Bab al-Mandab Strait from midday tomorrow. That latter development, if confirmed, would represent a significant escalation risk for global trade and energy flows, though markets treated it cautiously given the lack of verification.On the more constructive side, sentiment was supported by a series of optimistic remarks from U.S. President Donald Trump. He suggested the conflict could end “pretty soon” and pointed to positive developments around Lebanon, including ceasefire-related progress and the possibility of U.S.-Iran engagement over the weekend. While similar comments have been made repeatedly in recent weeks, markets appear increasingly willing to lean into the positive narrative.Overall, the tone remains fragile, with de-escalation hopes balancing against persistent tail risks.Central banks / macroCentral bank commentary reflected the growing complexity of the macro backdrop, particularly the inflation-growth trade-off stemming from higher energy prices.Bank of Japan Governor Kazuo Ueda emphasised that rising oil prices are acting as a drag on Japan’s growth while simultaneously pushing up inflation, highlighting a classic supply shock dilemma. He reiterated that monetary conditions remain highly accommodative, with low real interest rates, and stressed that policy decisions will remain data-dependent and assessed on a meeting-by-meeting basis. Ueda declined to be drawn on near-term rate expectations, reinforcing a cautious stance.In China, PBOC Governor Pan Gongsheng reaffirmed confidence in the country’s long-term growth outlook while signalling that policy will remain “appropriately loose.” This was complemented by the NDRC outlining a broad fiscal and industrial push, including support for consumption, high-growth sectors such as AI and the digital economy, and expanded energy security measures.In New Zealand, political developments added a layer of uncertainty, with Prime Minister Luxon pushing back against reports of a leadership challenge. While not immediately market-moving, softer polling trends and election-related risks could become more relevant over time.FXMajor FX was relatively subdued. The yen weakened modestly, with limited support from official commentary suggesting that broader dollar strength, rather than idiosyncratic yen weakness, is driving moves. Good luck with that.EquitiesAsia-Pacific equities underperformed, with traders trimming exposure into the weekend despite positive cues from Wall Street. The cautious tone reflects ongoing geopolitical uncertainty and reluctance to carry risk amid fluid headline risk.Houthis in Yemen will do the work to attempy po block Bab al-Mandeb if needed. This article was written by Eamonn Sheridan at investinglive.com.

China signalled continued policy support, with the PBOC maintaining a loose stance and officials accelerating fiscal spending and investment in tech and energy to support growth amid global risks.Summary:PBOC signals “appropriately loose” policy, prioritising consumption support China warns on global imbalances, protectionism, and policy spillovers NDRC rolls out large-scale fiscal and industrial support measures Focus on AI, digital economy, and private investment in high-growth sectors Energy security push intensifies amid global shock risks China’s central bank and top economic planners struck a coordinated policy tone, signalling continued monetary support, stepped-up fiscal deployment, and structural reforms aimed at stabilising growth and boosting domestic demand.Speaking at the G20 finance meetings, People’s Bank of China Governor Pan Gongsheng reiterated confidence in China’s long-term economic trajectory, while signalling that monetary policy will remain “appropriately loose.” The central bank will prioritise measures to support consumption, reflecting ongoing efforts to rebalance growth away from investment and exports.Pan also used the platform to deliver a broader message on the global economy, warning that rising protectionism, trade fragmentation, and structural weaknesses in the international monetary system are worsening global imbalances. He called for stronger G20 coordination to mitigate spillover risks from unilateral policy actions, underscoring China’s push for a more stable external environment.On the domestic front, China’s state planner, the National Development and Reform Commission (NDRC), outlined an expansive policy agenda aimed at reinforcing growth momentum. Authorities will accelerate deployment of 800 billion yuan in policy financial tools, alongside 755 billion yuan in central budget investment and around 1 trillion yuan in ultra-long special bonds, with much of the allocation expected by mid-year.Policy support is increasingly targeted toward high-growth sectors, with officials highlighting plans to boost private investment in areas such as the digital economy, artificial intelligence, and commercial space industries. This reflects a broader shift toward upgrading China’s industrial base and supporting emerging technologies.Energy security remains a parallel priority. The NDRC signalled plans to diversify energy imports, expand strategic reserves, and accelerate the build-out of non-fossil energy capacity, which is expected to double over the coming decade. Officials emphasised that domestic energy markets remain stable due to government intervention, even as global shocks persist.At the same time, structural reforms are set to deepen, including efforts to unify the national market, improve factor allocation, and curb excessive competition across industries.Overall, the policy mix points to a coordinated approach combining monetary easing, fiscal expansion, and industrial strategy, as Beijing seeks to underpin growth while navigating a more fragmented and uncertain global backdrop. Supports China growth expectations and risk sentiment, with positive spillovers for commodities and Asia equities. Policy focus on tech and energy transition may underpin industrial metals and clean energy sectors. This article was written by Eamonn Sheridan at investinglive.com.

IEA warns Europe may have just six weeks of jet fuel left as Hormuz disruptions hit supply, raising risks of higher inflation, flight cuts and a global economic slowdown.Summary:IEA warns Europe may have ~6 weeks of jet fuel left if Hormuz disruption persists Energy shock seen as “largest ever,” with global inflation and growth risks rising Flight cancellations, higher fares and fuel costs already emerging Developing economies expected to bear the brunt of the crisis Prolonged disruption risks recession and long-term damage to energy supply The global economy is facing a severe and escalating energy shock as disruptions to flows through the Strait of Hormuz threaten fuel supplies, growth, and inflation, according to the head of the International Energy Agency.IEA Executive Director Fatih Birol warned that Europe may have as little as six weeks of jet fuel remaining if the current blockage persists, raising the prospect of flight cancellations in the near term. He described the situation as the most significant energy crisis seen to date, with consequences set to intensify the longer the disruption continues. The economic impact is already becoming visible. Airlines are facing rising fuel costs, with some routes becoming uneconomic, prompting capacity cuts and higher fares. While major carriers say there are no immediate shortages, the industry is increasingly alert to tightening supply conditions.Birol emphasised that the fallout will extend far beyond aviation, with higher oil, gas, and electricity prices feeding into broader inflation pressures globally. He warned that the shock could push some economies toward slower growth or even recession, particularly if supply disruptions are not resolved within weeks.The burden is expected to fall disproportionately on developing economies, especially in Asia, Africa, and Latin America, which are more vulnerable to energy price shocks and have fewer buffers. However, Birol stressed that no country is immune, given the central role of energy in global economic activity.Even in a scenario where the conflict eases, the outlook for supply remains constrained. Significant damage to energy infrastructure across the region, with dozens of key assets affected, means production may take months or even years to fully recover.The crisis is also raising broader policy concerns. Birol cautioned against the emergence of transit fees in key shipping chokepoints such as Hormuz, warning that such practices could set precedents for other critical routes, including the Strait of Malacca.Overall, the disruption underscores the deep interlinkage between energy and geopolitics, with the current crisis expected to reshape global energy markets and policy priorities for years to come. ---Bullish for oil and energy prices, with rising inflation risks and downside to global growth. Aviation, transport, and energy-intensive sectors face pressure, while recession risks increase if disruption persists. This article was written by Eamonn Sheridan at investinglive.com.

RBI has asked state refiners to curb spot dollar buying and use FX credit lines to ease pressure on the rupee, as oil prices and capital outflows weigh on the currency.Summary:RBI asks state refiners to curb spot dollar buying to support rupee Oil import FX demand redirected via SBI credit line Rupee hit record lows amid oil surge and capital outflows Measures echo crisis-era playbook from Ukraine war period Currency stabilises modestly following intervention India’s central bank has moved to curb pressure on the rupee by urging state-run oil refiners to reduce their spot dollar purchases and instead tap a dedicated foreign exchange credit facility, according to sources.The Reserve Bank of India (RBI) has reportedly asked refiners to access foreign currency through a credit line arranged via State Bank of India (SBI), rather than sourcing dollars directly in the spot market. The measure is designed to limit the immediate demand for dollars, easing pressure on the domestic currency at a time of elevated volatility.The move comes as the rupee has come under sustained strain, weakened by a surge in global oil prices linked to the Iran conflict and ongoing foreign portfolio outflows. The currency has fallen more than 3% this year, at one point breaching record lows beyond 95 per U.S. dollar, making it one of the worst-performing major Asian currencies.State-run refiners, including Indian Oil Corp, Hindustan Petroleum, and Bharat Petroleum, account for a significant share of India’s crude imports and are among the largest buyers of dollars in the domestic market. Redirecting their FX demand through SBI, or encouraging use of the RBI-backed credit line, is expected to smooth demand and reduce volatility.Market participants have already noted a decline in refiners’ activity in the spot FX market in recent days, suggesting the measures are having an impact.The steps form part of a broader policy response by the RBI to stabilise the rupee. The central bank has also intervened directly by selling dollars from its foreign exchange reserves, tightened rules around arbitrage trading, and restricted banks from offering certain offshore-linked FX products.These actions appear to have helped steady the currency, with the rupee recovering around 2% from its recent lows.Supports near-term rupee stability and reduces FX volatility, but highlights vulnerability to oil prices and capital flows. Signals continued RBI willingness to intervene, anchoring downside risks in INR. This article was written by Eamonn Sheridan at investinglive.com.

NZ PM Luxon said he has full caucus support despite reports of a leadership push, as weak polling adds to political uncertainty ahead of the election, posing modest downside risks for NZD sentiment.Summary:NZ PM Luxon rejects leadership challenge reports, says he has caucus support Media reports suggest internal pressure within National Party Polling shows declining support for Luxon and coalition risks ahead of election Political uncertainty adds to already fragile NZ economic backdrop Limited immediate market impact, but risks skewed to NZD sentiment and fiscal outlookNew Zealand Prime Minister Christopher Luxon has pushed back against reports of a potential leadership challenge, insisting he retains full support from his National Party caucus despite rising political pressure ahead of this year’s general election.Speaking to reporters, Luxon said he remains confident in his position, dismissing suggestions that party members are preparing to move against him when parliament returns. Local media reports have indicated that some lawmakers are considering a push for leadership change, though not necessarily through an immediate formal challenge or confidence vote.The political noise comes as polling trends point to weakening support for both Luxon and the governing coalition. Recent surveys show the National Party struggling to consistently poll above 30%, raising questions about its ability to retain power at the 7 November 2026 election. Leadership preference data has also turned unfavourable, with opposition leader Chris Hipkins polling ahead of Luxon in at least one recent survey.From a macro perspective, the developments add a layer of political uncertainty to an already mixed economic backdrop. New Zealand’s economy has been navigating subdued growth, elevated interest rates, and a gradual disinflation process, leaving policymakers at the Reserve Bank of New Zealand in a cautious holding pattern.While the immediate economic impact of the political developments is limited, the situation could become more market-relevant if it begins to influence fiscal policy expectations or investor confidence. A weaker or more contested government heading into the election may reduce policy clarity at a time when economic conditions remain fragile.For financial markets, the implications are likely to be modest in the near term but skewed to sentiment. The New Zealand dollar could face mild pressure if political instability intensifies, particularly against a backdrop of global risk sensitivity and commodity price volatility. Domestic bond markets may remain anchored by the RBNZ’s policy stance, though longer-term yields could begin to reflect increased fiscal uncertainty if political risks escalate.Overall, while not yet a market-moving event, the political backdrop is becoming an increasingly relevant secondary factor for New Zealand assets as the election approaches. 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. Injects 500mn 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.

Singapore NODX rose 15.3% y/y in March, beating forecasts, as AI-driven electronics exports surged, though non-electronics remained weak and MAS warned of downside risks from global conditions. Summary:Singapore NODX +15.3% y/y in March vs +9.4% expected (Reuters poll) Electronics exports surge +74% y/y, driven by AI demand Non-electronics still weak (-0.6% y/y), highlighting uneven recovery Export growth broadening across Asia, softer to US and EU MAS flags downside risks from energy shock and tighter global conditionsSingapore’s export sector delivered a strong upside surprise in March, driven by a surge in electronics shipments linked to artificial intelligence demand, although underlying momentum remains uneven across sectors and regions.Non-oil domestic exports (NODX) rose 15.3% year-on-year, well above the 9.4% increase expected in a Reuters poll and accelerating sharply from February’s 4% gain. The data marks a seventh consecutive month of expansion, reinforcing the resilience of Singapore’s externally driven economy despite rising global uncertainty.The strength was heavily concentrated in electronics, where exports jumped 74% y/y, supported by robust AI-related demand and favourable base effects. Key contributors included integrated circuits, personal computers, and disk media products, underscoring Singapore’s position within the global semiconductor and tech supply chain.However, the broader picture remains more mixed. Non-electronic exports declined 0.6% y/y, extending a run of weakness, though the pace of contraction moderated from February’s 6.9% drop. This divergence highlights a two-speed export profile, with tech-linked sectors outperforming while more traditional industries lag.Regionally, export gains were concentrated within Asia, with shipments to Hong Kong, Taiwan, and China rising, while exports to the United States, European Union, and Indonesia declined compared to a year earlier. This suggests that demand linked to regional supply chains — particularly in electronics — remains stronger than in Western markets.For policymakers, the data comes shortly after the Monetary Authority of Singapore tightened policy, reflecting concerns about persistent inflation and currency pressures. However, MAS has also flagged growing downside risks, warning that a prolonged energy shock could tighten global financial conditions and weigh on demand, including through potential negative spillovers to the AI-driven cycle.While Singapore has upgraded its 2026 export growth forecast to 2–4%, the outlook remains contingent on global conditions. The March data reinforces near-term strength, but also highlights vulnerability to external shocks and the narrow base of the current export upswing. Highlights strength in the global AI and semiconductor cycle, supporting tech-linked assets. However, uneven export growth and MAS caution reinforce sensitivity to global demand and energy-driven risks. This article was written by Eamonn Sheridan at investinglive.com.

Japan finance ministry official: No comment when asked whether delay in BoJ rate hikes could trigger sharp yen falls It’s clear from data many currencies are weakening vs dollar, not just yen 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. 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.

more to come Trump is speaking at an event in LasVegas. Feedng the chooks. -Earlier:Iran stresses need for full Israeli withdrawal from southern LebanonUnverified reports Tehran plans to begin “initial steps” toward Bab al-Mandab block This article was written by Eamonn Sheridan at investinglive.com.

Summary:G20 sees Middle East conflict as key driver of global economic outlook – Ueda Japan flags oil-driven deterioration in terms of trade and growth drag Supply shock complicates policy, with inflation and growth effects pulling in opposite directions BoJ maintains highly accommodative stance, keeps data-dependent approach G7 sees limited direct damage but highlights need to support vulnerable economiesBank of Japan Governor Kazuo Ueda signalled growing concern among global policymakers over the economic implications of the Middle East conflict, while highlighting the complex policy trade-offs facing Japan as higher oil prices feed through the economy.Speaking after G20 and G7 discussions, Ueda said there was broad agreement among policymakers that the conflict has become a key factor shaping the global economic outlook, with uncertainty remaining elevated. While direct economic damage to major advanced economies appears limited so far, Japanese Finance Minister Satsuki Katayama noted that policymakers are increasingly focused on mitigating spillovers to more vulnerable countries.For Japan, the impact of rising energy prices is more acute. Ueda warned that higher crude oil costs are worsening the country’s terms of trade, effectively transferring income abroad and weighing on domestic growth. This negative income effect is expected to act as a drag on activity, even as government stimulus measures and solid corporate profits provide some offset.The inflation picture is more nuanced. Ueda acknowledged that rising oil prices will push up underlying inflation, but emphasised that a slowdown in growth would act in the opposite direction, dampening broader price pressures over time. This reflects the challenge of dealing with supply-driven inflation, which differs fundamentally from demand-led price increases and is more difficult for central banks to manage.Against this backdrop, Ueda reiterated that Japan’s monetary conditions remain highly accommodative, with real interest rates still low. This suggests the Bank of Japan retains flexibility but is not under immediate pressure to tighten policy aggressively.He declined to comment on market expectations for a near-term rate hike, instead stressing that policy decisions will be made on a meeting-by-meeting basis, taking into account incoming data, the likelihood of forecasts being realised, and the balance of risks.More broadly, Ueda underscored that the appropriate policy response will depend on the duration of the shock and the broader economic environment. The central bank remains focused on achieving its inflation target sustainably, suggesting a cautious and flexible approach as it navigates the competing forces of higher energy prices and growth headwinds.Reinforces a cautious BoJ path, with oil-driven inflation unlikely to trigger aggressive tightening. Growth headwinds and accommodative conditions may keep policy gradual, limiting upside in yields and supporting yen sensitivity to energy prices. This article was written by Eamonn Sheridan at investinglive.com.

The latest from Trump:Trump is happy with stock markets bouncing back. This article was written by Eamonn Sheridan at investinglive.com.

G7 finance chiefs warned the Middle East war risks damaging growth and fuelling inflation, signalling readiness to act on energy shocks while accelerating efforts to diversify critical minerals supply chains.Summary:G7 flags urgent need to limit economic fallout from Middle East war Central banks ready to act to prevent energy shock feeding into core inflation IEA oil releases highlight coordinated response to supply disruption Rare earths and critical minerals diversification away from China in focus Free transit through Hormuz seen as key to stabilising energy marketsG7 finance ministers and central bank governors have warned of mounting risks to the global economy from the Middle East conflict, pledging coordinated action to contain inflation pressures and safeguard energy and supply chains.Meeting on the sidelines of the IMF and World Bank spring meetings, officials agreed that limiting the economic damage from a prolonged conflict is an urgent priority, while emphasising the need to move toward a lasting peace. The group highlighted growing concern over both direct and second-round effects from the energy shock, particularly its potential to feed into broader inflation dynamics.From a policy perspective, G7 central banks signalled a readiness to respond if needed, while stressing that they are not yet in “rush mode.” Officials indicated they would act to prevent higher energy and commodity prices from becoming embedded in core inflation through second- and third-round effects, but will rely on incoming data before adjusting policy settings.Fiscal and policy coordination has already been deployed. Backed by the G7, the International Energy Agency released record volumes from strategic reserves to offset supply disruptions linked to the Strait of Hormuz. Officials indicated further intervention remains on the table if conditions deteriorate, underscoring a willingness to use inventories and coordinated measures to stabilise markets.Energy security remains central. French Finance Minister Roland Lescure stressed the importance of ensuring uninterrupted shipping through the Strait of Hormuz, warning against any attempt to impose transit costs. Maintaining open and cost-free passage is seen as critical to preventing further volatility in global oil markets and limiting inflation spillovers.Beyond energy, the G7 also sharpened its focus on supply chain resilience. Finance leaders discussed concrete steps to develop alternative supply chains for rare earths and critical minerals, aiming to reduce dependence on China’s dominant position. This reflects a broader strategic push to insulate key industrial inputs from geopolitical disruption.The group also reaffirmed support for Ukraine, with a focus on sustaining its economy, energy infrastructure, and reform agenda, while maintaining pressure on Russia.Overall, the G7 message points to a coordinated policy stance: monitor closely, act if needed, and prioritise preventing an energy shock from morphing into a broader inflation problem. --Reinforces a coordinated global policy backstop, helping cap extreme energy-driven inflation risks. Focus on Hormuz and supply chains keeps oil, shipping, and industrial metals central to market pricing. This article was written by Eamonn Sheridan at investinglive.com.

There are reports that a source close to Iran’s Parliament Speaker Ghalibaf said Tehran plans to begin “initial steps” toward blocking the Bab al-Mandab Strait from midday tomorrow, though the claim remains unverified This article was written by Eamonn Sheridan at investinglive.com.

NZ food prices fell 0.6% m/m (prev -0.1%) while retail card spending rose 0.7% (prev 1.4%), showing easing inflation and slowing demand, reinforcing expectations the RBNZ will hold rates steady.Summary:NZ food prices -0.6% m/m (prev -0.1%), annual pace 3.4% – Stats NZ Core retail card spending +0.7% m/m (prev +1.4%), signalling slower momentum Total card spending +1.3% m/m (prev +1.1%, revised to +1.3%) Data points to easing inflation but still-resilient, moderating demand RBNZ likely to remain on hold as disinflation continues gradually New Zealand data showed a combination of easing food price pressures and moderating, but still resilient, consumer spending in March, reinforcing expectations the Reserve Bank of New Zealand will remain on hold.Food prices fell 0.6% month-on-month in March, a deeper decline than the previous -0.1%, according to Statistics New Zealand. On an annual basis, food prices rose 3.4%, with the category accounting for nearly 19% of the CPI basket. The latest drop adds to evidence that near-term inflation pressures in household essentials are easing.Retail spending data, however, painted a more nuanced picture. Core electronic card spending rose 0.7% m/m, slowing from a stronger 1.4% increase previously. Meanwhile, total card spending rose 1.3% m/m, matching the upwardly revised 1.3% print for February (initially reported as 1.1%). The data suggests consumption remains supported but is losing some momentum as higher interest rates continue to weigh on households.Together, the figures point to a gradual cooling in inflation alongside a still-functioning consumer sector, rather than a sharp slowdown in activity.For the Reserve Bank of New Zealand, the data reinforces a cautious policy stance. Price pressures are easing in some categories, while underlying inflation remains a concern.The broader economic backdrop remains mixed. Growth has been uneven, with weakness in housing and business investment offset by pockets of resilience in consumption. External risks, particularly from global energy markets, continue to cloud the outlook and could complicate the inflation trajectory.For now, the moderation in both inflation and spending supports a “wait-and-see” approach from the RBNZ. Policymakers are likely to keep rates unchanged in the near term, looking for clearer evidence that inflation is durably contained without a sharper deterioration in economic activity. This article was written by Eamonn Sheridan at investinglive.com.

ECRI argues a synchronised global inflation upturn is underway beyond oil effects, with pressures broadening across major economies and posing a challenge for central banks.Summary:ECRI says global inflation cycle is turning higher beyond oil-driven effectsCurrent inflation impulse predates the escalation in geopolitical tensionsCurrent inflation impulse also reflects deeper cyclical forces tied to the global industrial cycle Inflation pressures broadening across U.S., Japan, Germany, and China Growth risks not yet acute despite higher inflation backdrop Structural drivers include supply constraints, weak productivity, and demand resilience Fed risks misreading inflation if it focuses too narrowly on energy prices A broad-based upswing in the global inflation cycle, extending well beyond the recent surge in oil prices, is emerging as a defining macro theme, according to Lakshman Achuthan of the Economic Cycle Research Institute (ECRI).Speaking in an interview, Achuthan argued that markets are overly focused on short-term, headline-driven moves, while missing a more persistent and synchronised inflation dynamic unfolding across major economies. He stressed that the current inflation impulse predates the escalation in geopolitical tensions and reflects deeper cyclical forces tied to the global industrial cycle.United States: In the U.S., Achuthan pointed to firming underlying inflation data as evidence that the cyclical upturn is already feeding through. Measures such as core PCE and core producer prices are trending higher, reinforcing the view that inflation pressures are becoming embedded rather than temporary. He warned that policymakers risk underestimating this shift if they focus too heavily on energy price volatility, particularly in the event of a ceasefire that might temporarily ease oil markets.Europe: In Europe, rising bond yields, including German bunds reaching multi-year highs, were highlighted as confirmation that inflation expectations are shifting. Achuthan said the move reflects a broader inflation cycle rather than a narrow energy story, suggesting that policymakers at the European Central Bank may face a more persistent inflation backdrop than markets currently anticipate.Japan: Japan, long associated with deflationary pressures, is also showing signs of a turn in the inflation cycle. Achuthan noted that Japanese government bond yields have climbed to levels not seen in nearly three decades, signalling a meaningful shift in inflation expectations and reinforcing the global nature of the trend.China: Even in China, where deflation concerns have dominated in recent years, forward-looking inflation gauges are beginning to turn higher. Achuthan described the move as “clean,” indicating a cyclical shift rather than a temporary rebound, and underscoring the breadth of the global inflation impulse.Achuthan emphasised that multiple structural and cyclical forces are contributing to the persistence of inflation, including supply bottlenecks, ongoing disruptions, soft productivity growth, and resilient demand among higher-income consumers. While longer-term productivity gains from artificial intelligence may eventually ease pressures, he argued these benefits are not materialising quickly enough to offset current dynamics.He also pushed back on the idea that rising inflation will necessarily translate into a supportive backdrop for risk assets, warning that markets hoping for an “inflationary boom” may be disappointed if price pressures remain elevated without corresponding growth strength.Ultimately, Achuthan framed the outlook in binary cyclical terms, arguing that the direction of inflation is clearly higher despite short-term noise. For policymakers, this presents a complex challenge as they balance emerging inflation pressures against still-uncertain growth dynamics.-If sustained, this reinforces a higher-for-longer inflation backdrop, challenging rate-cut expectations and supporting yields. It also raises the risk of a stagflationary mix, where inflation stays firm even as growth momentum remains uneven.-What is ECRI?The Economic Cycle Research Institute (ECRI) is a U.S.-based independent research firm specialising in business cycle analysis, with roots tracing back to Geoffrey Moore, a pioneer in leading economic indicators. The firm focuses on identifying turning points in economic cycles, such as shifts in growth and inflation, rather than producing traditional forecasts for GDP or inflation levels. Its framework is widely referenced in academic and policy circles, particularly for its systematic approach to tracking cyclical dynamics across global economies.In markets, ECRI is typically viewed as a specialised “cycle signal” provider rather than a mainstream sell-side forecaster. Its calls can be influential, particularly when identifying inflection points, but they are sometimes seen as early or overly binary in nature. As a result, investors often treat ECRI’s analysis as a valuable input alongside broader macro data, central bank guidance, and market pricing rather than a standalone guide to positioning. This article was written by Eamonn Sheridan at investinglive.com.

RBC expects global central banks to largely hold rates despite oil-driven inflation risks, with policymakers prioritising growth concerns, while the RBA remains an outlier with further tightening likely.Summary:RBC expects major central banks to hold rates despite oil-driven inflation risks Energy shock seen as dampening growth, reducing urgency to hike Fed, BoC, ECB, and BoE all expected to stay on hold through 2026 RBA seen as the outlier, with further tightening likely Inflation expectations and oil prices remain key policy watchpointsCentral banks are likely to tread cautiously in response to higher oil prices, with policymakers expected to prioritise growth risks over inflation in the near term, according to a research note from RBC. The bank argues that energy-driven price shocks typically act as a tax on consumers, reducing purchasing power and dampening demand, which in turn limits the need for immediate policy tightening.Bank of Canada: RBC expects the Bank of Canada to remain on hold after keeping its overnight rate at 2.25% in March. Governor Tiff Macklem has emphasised uncertainty around the economic impact of the Middle East conflict and elevated oil prices. While the BoC is prepared to “look through” an initial energy price spike, RBC notes that a broader or more persistent inflation impulse would prompt a response. For now, policymakers are expected to wait for clearer data, with rates seen unchanged into 2026.Federal Reserve: The Federal Reserve is also expected to hold steady. RBC highlights that while the Fed revised its inflation forecasts higher for 2026, policymakers remain firmly data-dependent. Chair Jerome Powell signalled no strong bias toward either tightening or easing, instead stressing that further rate cuts would require additional progress on inflation. RBC therefore maintains its view that the Fed will leave rates unchanged this year.Bank of England: RBC sees the Bank of England adopting a similarly cautious stance. The Monetary Policy Committee’s unanimous decision to hold rates at 3.75% in March was viewed as more hawkish than expected, with policymakers signalling concern over the inflationary impact of higher oil prices. As a result, RBC has removed its previous expectation for rate cuts this year and now anticipates the BoE will hold policy steady through 2026.European Central Bank: The European Central Bank is likewise expected to keep rates unchanged, with RBC pointing to its March decision to hold the deposit rate at 2%. While the ECB has indicated it is prepared to act if energy prices rise further and inflation expectations become unanchored, its baseline scenario assumes that current futures-implied energy price paths will allow it to remain on hold.Reserve Bank of Australia: In contrast, the Reserve Bank of Australia is expected to continue tightening. RBC highlights the RBA’s recent 25 basis point hike and the narrow 5–4 vote split, noting the division reflected debate over the timing of further increases — whether to move immediately or wait — rather than disagreement over the need for additional tightening itself. This underscores a broadly hawkish bias within the board. RBC now forecasts another hike in May, taking the terminal rate to 4.35%, citing persistent domestic inflation pressures and uncertainty over whether policy is sufficiently restrictive. This article was written by Eamonn Sheridan at investinglive.com.

The U.S. is warning European allies of likely weapons delivery delays as the Iran war strains already stretched defence stockpiles, with competing demands from Ukraine, Israel, and Gulf missile defence adding pressure.Summary:U.S. likely to delay some weapons deliveries to European allies due to Iran war demand – Reuters Affected countries include Baltic states and Scandinavia Delays tied to strain on U.S. weapons stockpiles and production capacity Ongoing conflicts (Ukraine, Gaza, Iran) compounding supply pressures Patriot missile usage highlights competing global defence demandsThe United States has informed several European allies that deliveries of previously contracted weapons may be delayed as the ongoing Iran war places increasing strain on U.S. military stockpiles, according to sources cited by Reuters.Officials have privately communicated that a number of European countries, including those in the Baltic region and Scandinavia, are likely to be affected. The weapons in question were largely purchased through the U.S. Foreign Military Sales (FMS) program but have yet to be delivered, with shipments now expected to face delays.The issue reflects mounting pressure on U.S. defence inventories, which have already been significantly drawn down in recent years. Washington has supplied large volumes of military equipment to Ukraine since Russia’s 2022 invasion, alongside continued support for Israel’s operations in Gaza beginning in late 2023.The escalation of the Iran conflict — which began with U.S. and Israeli strikes on February 28 — has further intensified demand. Iran has since launched hundreds of ballistic missiles and drones at Gulf states, many of which have been intercepted using systems such as the PAC-3 Patriot missile defence platform.These developments have raised concerns within parts of the U.S. government that defence production may struggle to keep pace with overlapping global commitments, potentially forcing delays or reprioritisation of deliveries to allied nations.Neither the White House nor the Pentagon immediately commented on the reported delays.---This underscores a tightening global defence supply chain, reinforcing elevated geopolitical risk premia. Defence stocks may benefit from sustained demand, while allies’ security concerns could support higher military spending across Europe and NATO. This article was written by Eamonn Sheridan at investinglive.com.