Prior +0.1%GDP +1.0% vs +1.0% y/y prelimPrior +1.2%No changes to the initial estimates as the UK economy squeezes out marginal growth in the final quarter of last year. In output terms, growth in the latest quarter was driven by an increase of 1.2% in production, while the construction sector fell by 2.1% and the services sector showed no growth.As a whole, UK GDP is estimated to have increased by 1.3% annually in 2025. That follows from the growth estimate of 1.1% in 2024. This article was written by Justin Low at investinglive.com.

There are a few to take note of on the day, as highlighted in bold below.The first being for EUR/USD at the 1.1500 level. The expiries are large in size and so could act as a bit of a ceiling to price action on any upside extensions. The dollar has been keeping firmer since last week already, with the pair poised for six straight days of declines. So, the trend does reaffirm that the downside pressure appears to be more persistent currently.Even as risk sentiment may be faring better today after the Wall St Journal report on Trump mulling over ending the war without reopening the Strait of Hormuz, it might prove to be a false dawn. As said before, nothing changes for markets until something changes on the Strait of Hormuz. So, keep that in mind.The dollar is still holding steadier so far today, even as we see equities nudge a bit higher. So, it does show that traders are not getting too carried away just yet.Then, there is one for USD/CHF at the 0.7950 level. The pair has breached above its key daily moving averages at the end of last week. That is the first time it pushes above both key technical levels since April last year. That being said, the 0.8000 level is still keeping things in check.For now, buyers will stay poised in keeping above the 200-day moving average at 0.7943. The short-term momentum is also relying on the 100-hour moving average at 0.7953 currently. So, the expiries might just add another layer in helping buyers stay interested on any light pullbacks.And lastly, there is one for AUD/USD at the 0.6825 level. That rests close to the 100-day moving average at 0.6818 with the pair continuing to fall since last week. The drop this week sees a fresh two-month low for AUD/USD, reaffirming that sellers remain in control as the US-Iran conflict extends and higher oil prices remain.The expiries could pair up with the key technical level above in limiting the downside for today. However, things can quickly turn uglier if risk sentiment falters and we get a break of the key level.For more information on how to use this data, you may refer to this post here.Apart from that, do be reminded that month-end trading may also be a factor today. In that lieu:Dollar buying looks to be the flavour this month-endMonth-end flows point to dollar buying into the fix - BofA This article was written by Justin Low at investinglive.com.

The big news as we get into the new day is this one here: Trump open to ending Iran war without reopening Strait of Hormuz - WSJThe report says that the US might look to wind down military activity in the Middle East. That after it accomplishes in degrading Iran's naval and missile capabilities. It might be one that is tough to imagine though, as it would see US president Trump still not get what he wants exactly. That being said, is it all an attempted diversion though?There's still talk of ground forces moving in over the past few days and that is something to be mindful of. Despite whatever reports, Trump will still need to frame this war in a way where he walks out as the victor - whatever that means.In this case, he can boast about taking Iran down a notch or two. But come what may, nothing changes for markets until something changes on the Strait of Hormuz. I've said it already all throughout this war episode.The issue with effectively handing over control of the strait to Iran means that the US does not hold the ace card here. From an economic perspective, Iran is the one firmly in the driver's seat unless their ability to control the strait diminishes significantly.But as long as the threats are there and it remains in de facto closure, Iran has leverage to work with to push back against Trump. That especially as we know that this war has everything that Trump hates in markets.So S&P 500 futures may be up 0.9% on the day now with bond yields also coming off the boil this week. But as we've seen with previous incidences, this might just be a false dawn as it doesn't mean anything to global markets and major economies unless passage along the Strait of Hormuz returns to normal.Otherwise, this is going to be just another temporary respite. That before oil prices start to ramp higher again and we see that cascade to broader markets and bite at risk sentiment. This article was written by Justin Low at investinglive.com.

Global stocks see biggest selling in a year. Hedge funds ramp shorts (Goldman Sachs data)China factory activity hits 1-year high as PMIs return to expansionChina March official PMIs: Manufacturing 50.4 (exp 50) Non-manufacturing 50.1 (exp 49.9)Tokyo inflation cools further but underlying price pressures remain intactPBOC sets USD/ CNY central rate at 6.9194 (vs. estimate at 6.9209)WSJ: Trump open to ending Iran war without reopening Strait of HormuzRBA March Minutes: Members agreed further tightening would likely be neededNZ business confidence and activity collapse. Inflation pressures remain elevated.Australia to scrap junior pay rates for 18–20-year-olds in major wage shiftJapan February retail sales drop below expected and prior, industrial output soft alsoJapan Tokyo Core CPI 1.7% y/y , below expected and prior both 1.8%Australia confidence hits record low and inflation expectations hit record highUK shop price inflation rises as Iran war lifts supply chain costsTanker hit in Dubai as missiles intercepted in Saudi Arabia, Gulf tensions remain elevatedPete Hegseth’s broker looked to buy defence fund before Iran attack – FTRBA weighs in, to lower costs for businessFed’s Williams says energy outlook tied to markets, core inflation containedReports of 'unknown projectile' hitting a tanker in Persian Gulf near Hormuz, caused fireNetanyahu says Israel weakened Iran missile capabilities, destroyed factoriesHSBC says gold behaving like risk asset despite geopolitical tensions, but still supportedMore from Fed's Williams: Monetary policy is in the right placeStocks close mostly lower led by small cap stocksinvestingLive Americas FX news wrap 30 Mar: Geopolitics talks lift then rattle marketsFed's Williams speaking: Tariffs and Iran war will push headline inflation higherIn brief:Iran-linked strike hits Kuwaiti oil tanker in Dubai port; fire reported Saudi Arabia intercepts 8 Iranian ballistic missiles targeting Riyadh Explosions reported in Isfahan amid ongoing US/Israel strikes Gulf states reportedly pushing US toward ground invasion Oil reverses gains after Trump signals willingness to end war without reopening Hormuz Tokyo CPI continues to cool; China PMIs return to expansion RBA minutes reinforce hawkish stance; inflation expectations hit record high Equities weaker in Asia; gold higher; FX largely rangeboundGeopolitical tensions escalated further, with multiple flashpoints across the Middle East. Iran struck a fully laden Kuwaiti oil tanker anchored in Dubai’s port, damaging the hull and igniting a fire onboard, according to Kuwait Petroleum Corporation. At the same time, Saudi Arabia reported intercepting eight Iranian ballistic missiles targeting Riyadh, near key military infrastructure.Further signs of intensification came with large explosions reported in the Iranian city of Isfahan, following strikes attributed to Israel and/or the United States. Separately, reports citing Gulf diplomatic sources suggested the UAE, alongside Kuwait and Bahrain, is pushing for a US ground invasion of Iran, pointing to rising pressure for a broader escalation.Despite the worsening security backdrop, oil saw sharp two-way price action. Crude initially extended gains on the escalation and tanker strike, but later reversed and moved lower after reports that US President Trump is willing to end the conflict without reopening the Strait of Hormuz, easing immediate fears of a prolonged supply shock. Given the continuing US troop build up in the region this from trump would seem to be misdirection. On the data front, Tokyo inflation continued to cool across all key measures, with headline, core and core-core readings all slowing to multi-month or multi-year lows, reinforcing the view of near-term softness in Japanese price pressures. In contrast, China’s March PMIs surprised to the upside, with manufacturing returning to expansion and hitting a 12-month high, signalling a rebound in activity.Central bank developments remained in focus, with the RBA minutes confirming a hawkish tilt. While the Board was split on timing, members broadly agreed further tightening is likely, particularly as inflation risks rise. This was reinforced by an ANZ survey showing inflation expectations have surged to a record high.Across markets, gold moved higher amid the geopolitical backdrop, while Asian equities weakened, with the Kospi briefly entering bear market territory and Chinese indices posting declines. Major FX pairs traded in relatively tight ranges.Looking ahead, attention will turn to a scheduled US military briefing on Operation Epic Fury, which may provide further clarity on the trajectory of the conflict. Scheduled for 8am US Eastern time. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Global equities saw largest net selling since April 2025 Marks sixth consecutive week of equity outflows Selling heavily skewed toward short positions (5.6:1 vs longs) North America and Europe led selling in dollar terms Tech, industrials and healthcare hardest hit Asia saw sharp divergence between EM and DM flows European short exposure hits 10-year highGlobal equity markets experienced their largest wave of net selling in nearly a year last week, as hedge funds extended a sustained run of outflows amid rising macro uncertainty, according to Goldman Sachs Prime Services data.The bank’s weekly positioning report showed that global equities recorded their biggest net selling since April 2025, marking the sixth consecutive week of outflows. The move was driven predominantly by short selling, which outpaced long buying by a ratio of 5.6 to 1, highlighting a decisive shift toward defensive and bearish positioning.Selling was broad-based across regions, with North America and Europe leading in dollar terms. In sectoral terms, seven of the eleven major sectors saw net selling, with information technology, industrials and healthcare experiencing the heaviest pressure. In contrast, consumer staples, energy and materials attracted relative buying interest, suggesting a rotation toward more defensive and commodity-linked exposures.Asia also saw notable selling, recording its largest percentage net outflow since April 2025. However, flows diverged sharply within the region. In emerging Asia, selling was driven by long liquidation, while in developed Asia it was driven by increased short positioning. The shift was particularly pronounced in Korea, where a large portion of year-to-date buying was unwound during March.European equities remained a focal point for bearish positioning, with hedge funds extending their selling streak to six consecutive weeks. Short exposure in European macro products has risen to 11% of total exposure, the highest level in a decade, with the UK, Ireland and Germany seeing the most significant selling.Despite the broad-based selling, allocations to Asia remain elevated, indicating that while sentiment has deteriorated, investors have not fully exited positions, leaving scope for further adjustment depending on how macro risks evolve. This article was written by Eamonn Sheridan at investinglive.com.

China’s manufacturing PMI rose to 50.4 in March, a one-year high, with all PMIs returning to expansion, though rising input costs and Middle East war risks threaten the durability of the recovery.Summary:China March PMIs returned to expansion across the board Manufacturing PMI rose to 50.4 (exp. 50.0, prev. 49.0) — 1-year high Non-manufacturing PMI at 50.1 (prev. 49.5) Composite PMI improved to 50.5 (prev. 49.5) Demand recovery drove rebound, including output and new orders Input costs surged, signalling renewed inflation pressure Middle East war adds downside risk via energy and trade channelsChina’s factory activity expanded at the fastest pace in a year in March, with official data showing a broad-based return to growth across manufacturing and services, offering a near-term boost to confidence in the world’s second-largest economy.The official manufacturing PMI rose to 50.4 from 49.0 in February, moving back into expansion territory and exceeding expectations. The reading marked the strongest level in 12 months, supported by a rebound in demand following earlier weakness. Output and new orders both improved meaningfully, while export orders, although still in contraction, showed a notable recovery.The non-manufacturing PMI also returned to expansion, rising to 50.1 from 49.5, while the composite PMI climbed to 50.5, signalling a broader improvement in overall economic activity.Part of the strength likely reflects post-Lunar New Year normalisation, as firms resumed production following an extended holiday period. However, the data also suggests underlying demand has stabilised, supported by government policy measures and resilient external demand, particularly in electronics and industrial exports.That said, the recovery comes with growing cost pressures. Input prices surged sharply, with the raw materials price index jumping to 63.9, highlighting the impact of rising commodity prices and stronger procurement demand. This raises the risk that margin pressure could intensify across the manufacturing sector.Looking ahead, the outlook remains clouded by escalating geopolitical risks. The Middle East conflict is increasingly seen as a potential headwind, with disruptions to energy markets and global shipping routes threatening to weigh on supply chains and export flows. The region accounts for a significant share of China’s trade, including around a fifth of vehicle exports.Overall, while March’s PMI data points to a cyclical rebound in activity, the sustainability of the recovery will depend heavily on external conditions, particularly energy prices and global trade stability. This article was written by Eamonn Sheridan at investinglive.com.

Just the data. China March official PMIs all retrun to expansion:Manufacturing 50.4expected 50, prior 49.0Non-manufacturing 50.1expected 49.9, prior 49.5Composite 50.5expected 50.2, prior 49.5I'll have more to come on this separately. Added, here we go:China factory activity hits 1-year high as PMIs return to expansion This article was written by Eamonn Sheridan at investinglive.com.

Summary:Tokyo CPI slowed to its weakest pace in four years in March Headline inflation eased to 1.4% (prev. 1.5%) Core CPI (ex-fresh food) slowed to 1.7% (exp. 1.8%) Core-core inflation (ex-food, energy) eased to 2.3% (prev. 2.5%) Government subsidies continue to suppress price pressures Underlying inflation still above 2%, but momentum cooling Inflation in Tokyo slowed to its weakest pace in four years in March, reinforcing the view that near-term price pressures in Japan are easing even as underlying inflation dynamics remain intact. Tokyo area March core CPI rises at slowest pace since April 2024 Tokyo area March core-core CPI rises at slowest pace since March 2025 Tokyo area March overall CPI rises at slowest pace since March 2022Headline consumer prices rose 1.4% year-on-year, down from 1.5% in February and marking the softest pace since March 2022. Core inflation, which excludes fresh food, also cooled to 1.7%, undershooting expectations and remaining below the Bank of Japan’s 2% target for a second consecutive month.A broader measure of underlying inflation, which strips out both fresh food and energy, eased to 2.3% from 2.5% previously. While still above target, the moderation suggests that momentum in price growth is softening, particularly as government measures continue to dampen energy and food costs.The slowdown reflects ongoing policy efforts to shield households from rising living costs, with subsidies helping offset the impact of higher import prices driven by a weaker yen. These measures have played a key role in containing headline inflation in recent months, even as global cost pressures remain elevated.However, the cooling trend is widely expected to prove temporary. Rising energy prices linked to the Middle East conflict, alongside persistent currency weakness, are likely to reintroduce upward pressure on inflation in the months ahead. At the same time, improving wage dynamics are expected to support a more durable inflation backdrop.For the Bank of Japan, the data reinforces a delicate balancing act. While the recent slowdown may reduce urgency in the near term, policymakers have signalled confidence that inflation will pick up later this year as subsidy effects fade and wage growth feeds through more fully.Overall, Tokyo inflation continues to point to a gradual transition rather than a reversal, with underlying price pressures still consistent with the central bank’s longer-term normalisation path. 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 32.5bn yuan in 7-day reverse repos at 1.4% (unchanged) in open market operations This article was written by Eamonn Sheridan at investinglive.com.

Trump is reportedly open to ending the Iran war without reopening the Strait of Hormuz, signalling a shift in priorities, though continued U.S. troop build-up suggests mixed messaging and ongoing risks to global energy flows. Wall Street Journal has the article, though (see below) I am wondering ifs its misdirection given the surge in US troops and other military assets in the region. Summary:Trump reportedly open to ending war without reopening Strait of Hormuz Would prioritise degrading Iran’s military over restoring energy flows Hormuz closure continues to disrupt global trade and energy markets U.S. still deploying additional troops and assets to the region Policy signals remain mixed, with shifting objectives and messaging Raises risk of prolonged disruption despite potential de-escalationU.S. President Donald Trump is reportedly willing to wind down the military campaign against Iran even if the Strait of Hormuz remains largely closed, signalling a potential shift in strategic priorities as the conflict enters its second month.According to officials familiar with internal discussions, the administration is increasingly focused on achieving core military objectives, including degrading Iran’s naval and missile capabilities, rather than immediately restoring the flow of global energy through the critical shipping chokepoint. The Strait of Hormuz, which handles roughly 20% of global oil flows, has seen traffic reduced to a trickle following Iranian mining activity and threats against commercial vessels. The disruption has already pushed oil prices above USD100/bbl and triggered shortages across key industrial supply chains.Officials reportedly assessed that forcibly reopening the waterway would require a significantly longer and more complex military campaign, potentially extending beyond the administration’s preferred timeline. As a result, the current strategy appears to favour winding down active hostilities while shifting pressure onto diplomatic channels and allied nations to address the shipping disruption.However, the messaging remains fluid. Trump has alternated between downplaying the importance of the strait to the U.S. economy and threatening direct action against Iranian energy infrastructure if it is not reopened. At the same time, senior officials have suggested that securing freedom of navigation could be deferred to a later phase or handled through multinational efforts.Notably, the apparent willingness to tolerate a partially closed Hormuz sits uneasily alongside a continued build-up of U.S. military forces in the region, including additional naval deployments and the potential for expanded ground troop presence. This divergence raises the possibility that current rhetoric may reflect tactical signalling rather than a definitive shift in strategy.Overall, the evolving stance highlights a complex balancing act: pursuing de-escalation while maintaining pressure on Iran, even as the global economic fallout from disrupted energy flows continues to intensify. This article was written by Eamonn Sheridan at investinglive.com.

Full text is here.Summary:RBA minutes after March hike was a tightly split 5-4 decision Board agreed financial conditions needed to be restrictive Members agreed further tightening would likely be needed, but differed on timing Oil near USD100/bbl seen capable of lifting June-quarter CPI to around 5% Majority feared inflation expectations could become unanchored without prompt action Minority preferred to wait, citing uncertainty around growth, consumption and labour market risksMinutes from the Reserve Bank of Australia’s March meeting showed the Board was united on the need for restrictive financial conditions, but sharply divided on whether to deliver an immediate rate hike, underscoring the difficult trade-off created by the Middle East conflict and its inflationary impact. The Board ultimately raised the cash rate by 25bp in a 5-4 vote, with all members agreeing that further tightening would likely be needed at some point, even if there was disagreement over timing. The minutes highlighted that policymakers saw the surge in oil prices as materially increasing the risk that inflation would remain above target for an extended period. The RBA judged that if oil prices were to remain around USD100 per barrel, annual headline CPI inflation could rise to around 5% in the June quarter, a marked lift from February’s 3.7%. For the majority, that risk was serious enough to warrant an immediate response, particularly given concerns that a delay could allow the oil shock to seep into inflation expectations and broader price-setting behaviour. Those members also argued that financial conditions were still not sufficiently restrictive and may even have remained accommodative, while downside risks to the labour market had eased in recent months and may have reversed further. In their view, acting in March was important to demonstrate the Board’s commitment to returning inflation to target. The minority took a more cautious view, arguing that uncertainty caused by the Middle East conflict could yet weigh meaningfully on domestic demand. They pointed to the possibility that household consumption could prove weaker than forecast and that the labour market may be looser than the majority judged. Even so, they did not rule out further hikes, preferring instead to wait for more information before tightening again. Overall, the minutes reinforce a hawkish message from the RBA: the hurdle for pausing has risen, but the path ahead is highly data- and conflict-dependent. The Board made clear it cannot predict the future course of rates with confidence while the war continues, leaving policy finely balanced between inflation control and rising downside risks to growth. Reserve Bank of Australia Governor Bullock This article was written by Eamonn Sheridan at investinglive.com.

Summary:ANZ Business Confidence (Mar): 32.5 (prev. 59.2) ANZ Activity Outlook (Mar): 39.3 (prev. 52.6)ANZ Business Outlook shows weak business confidence persists Inflation indicators remain elevated despite softer activity signals Pricing intentions and cost pressures still sticky Activity indicators mixed, pointing to slowing momentum Firms cautious on outlook amid uncertainty and higher costs Data highlights ongoing inflation persistence riskNew Zealand business sentiment deteriorated sharply in March, even as inflation pressures remain elevated, highlighting a growing divergence between weakening activity and persistent price pressures.The latest ANZ Business Outlook survey showed a significant pullback in forward-looking indicators, with headline business confidence dropping to 32.5 from 59.2 previously, while firms’ own activity outlook fell to 39.3 from 52.6. While both measures remain in positive territory, the magnitude of the decline points to a clear loss of momentum across the economy.The deterioration in sentiment comes amid heightened uncertainty and tighter financial conditions, with businesses becoming more cautious on the outlook for demand and investment. The sharp fall in activity expectations suggests that the economy may be entering a softer phase, even if conditions have not yet turned outright contractionary.However, the survey also reinforces that inflation pressures remain sticky. Pricing intentions and cost indicators continue to signal that firms are facing elevated input costs and are still passing these through to consumers. This dynamic underscores the risk that inflation may prove more persistent, even as growth slows.The combination of weakening confidence and resilient inflation indicators presents a challenge for the Reserve Bank of New Zealand. While softer activity would typically support a more accommodative stance, ongoing pricing pressure limits the scope for policy easing in the near term.Overall, the survey points to an economy losing momentum but still grappling with entrenched inflation dynamics, leaving policymakers balancing downside growth risks against the need to ensure inflation pressures are contained. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Fair Work Commission to abolish junior pay rates for 18–20-year-olds Around 500,000 workers set to benefit across retail, fast food and pharmacies Pay increases to be phased in over up to four years from December Junior rates to remain in place for minors under 18 Decision removes “discounted” wages for young adult workers Seen as a major structural change to Australia’s wage frameworkAustralia’s Fair Work Commission has ruled to abolish junior pay rates for workers aged 18 to 20 across key service sectors, marking a significant shift in the country’s wage-setting framework.The decision, which affects employees in the retail, fast food and pharmacy industries, will remove discounted wage rates for young adults, aligning their pay more closely with standard award levels. The changes will be introduced gradually, with the first adjustments scheduled to take effect from December and a full phase-in period extending up to four years.Under the current system, junior pay rates apply to workers under the age of 21, with 18-year-olds earning around 70% of the full award rate, rising incrementally to 90% for 20-year-olds. The commission determined that such discounted rates are no longer appropriate for adult workers, effectively redefining how young employees are treated within Australia’s industrial relations system.The ruling is expected to benefit around half a million workers, based on available labour force data, and represents one of the most significant changes to wage structures in decades. However, junior rates will remain in place for workers under the age of 18, with the commission choosing not to alter pay settings for minors.The decision follows a formal review of junior wage provisions under several major industry awards, including the General Retail, Fast Food and Pharmacy Awards. It reflects a broader shift toward equity in wage outcomes, particularly for younger workers who are legally adults but have historically been paid below standard rates.While the phased implementation may limit immediate cost pressures for businesses, the changes are expected to gradually lift labour costs across affected sectors, particularly those with a high concentration of younger employees. 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.

We had CPI data earlier:Japan Tokyo Core CPI 1.7% y/y , below expected and prior both 1.8%Now retail and industry:I'll have more to come on this separately This article was written by Eamonn Sheridan at investinglive.com.

I'll have more to come on this separately. ADDED, here: Tokyo inflation cools further but underlying price pressures remain intactIn brief, less pressure on the BoJ to hike with these numbers:Tokyo area March core CPI rises at slowest pace since April 2024Tokyo area March core-core CPI rises at slowest pace since March 2025Tokyo area March overall CPI rises at slowest pace since March 2022 This article was written by Eamonn Sheridan at investinglive.com.

Summary:ANZ-Roy Morgan consumer confidence hits fresh record low Inflation expectations surge to a new record high Households increasingly pessimistic on economic outlook Cost-of-living pressures remain dominant concern Weak sentiment persists despite resilient labour market Data reinforces upside inflation risks for RBAAustralian consumer confidence has fallen to another record low, while inflation expectations have climbed to a new record high, underscoring the growing pressure on households and the challenge facing policymakers.The latest ANZ-Roy Morgan survey showed sentiment deteriorating further, with consumers increasingly pessimistic about both their personal financial outlook and broader economic conditions. Persistent cost-of-living pressures and higher interest rates continue to weigh heavily on households, driving confidence deeper into negative territory.At the same time, inflation expectations surged to their highest level on record, marking a significant development for the Reserve Bank of Australia. The rise suggests households increasingly expect price pressures to remain elevated, raising the risk that inflation becomes more entrenched through changes in behaviour such as wage demands and spending patterns.The jump in expectations comes amid a renewed energy-driven inflation shock linked to the Middle East conflict, adding to existing domestic price pressures. This combination is particularly concerning for policymakers, as second-round effects — where higher costs feed into broader prices — become more likely when expectations shift higher.Despite the sharp deterioration in sentiment, the labour market remains relatively resilient, creating a disconnect between current economic conditions and consumer perceptions. However, persistently weak confidence poses downside risks to household consumption, a key pillar of economic growth.For the RBA, the data presents a clear policy tension. While weak consumer confidence would typically argue for caution, the surge in inflation expectations strengthens the case for maintaining a restrictive stance. With the central bank already signalling it is not looking to cut rates, the focus remains on ensuring inflation expectations do not become unanchored. This article was written by Eamonn Sheridan at investinglive.com.

Summary:UK shop price inflation ticks up to 1.2% y/y in March (prev. 1.1%) Retailers warn Iran war is beginning to lift supply chain costs Food inflation eases slightly, non-food prices turn positive BRC flags risk of further inflation from energy and logistics pressures New labour and food regulations seen adding to cost pressures BoE watching food prices closely as inflation expectations riseUK shop price inflation edged higher in March, with retailers warning that rising costs linked to the Middle East conflict are beginning to feed through supply chains and could push prices higher in the months ahead.Data from the British Retail Consortium showed shop price inflation rose to 1.2% year-on-year, up from 1.1% in February, though still slightly below its recent three-month average. The increase comes shortly after the outbreak of the Iran war, with early signs that higher energy and transport costs are starting to impact retailers.Food price inflation eased modestly to 3.4% from 3.5% previously, driven in part by lower dairy prices. However, non-food prices moved back into positive territory, rising 0.1% after a decline in February, suggesting broader pricing pressures may be stabilising or beginning to rebuild.Retailers warned that the evolving geopolitical situation poses upside risks to inflation, as higher input and logistics costs work their way through supply chains. While firms are attempting to absorb some of these pressures, the industry expects that not all cost increases can be contained.Beyond geopolitical factors, the sector is also facing domestic cost pressures, including new labour market measures and regulations tied to healthier food standards, both of which are expected to raise operating expenses.The data will be closely monitored by the Bank of England, which has emphasised the importance of food prices in shaping consumer inflation expectations. Recent surveys suggest expectations have risen to their highest levels since 2023, increasing the risk that temporary price shocks become more persistent.While the current increase in shop price inflation remains modest, the combination of geopolitical disruption and domestic cost pressures points to a more challenging inflation outlook ahead, particularly if energy prices remain elevated. This article was written by Eamonn Sheridan at investinglive.com.

Oil risk premium likely to rise sharply, especially with tanker involvement and spill risk. Markets will focus on whether attacks hit export infrastructure or disrupt Hormuz flows. Expect volatility across oil, gold and risk assets.Summary:Multiple attacks reported across Gulf region, including Dubai, Kuwait and Saudi Arabia Oil tanker struck at Dubai port, fire reported; no casualties Kuwait warns of potential oil spill following tanker attack Saudi Arabia intercepts four ballistic missiles targeting Riyadh Drone strikes and interception debris reported in Dubai; minor injuries Air raid sirens activated in Bahrain Escalation points to widening regional conflict and elevated energy riskA series of coordinated attacks across the Gulf has heightened fears of a broader regional escalation in the Iran conflict, with strikes reported in the United Arab Emirates, Saudi Arabia, Kuwait and Bahrain.Kuwait’s state news agency said a giant oil tanker was targeted in an attack at Dubai port, triggering a fire onboard the vessel. Authorities confirmed that there were no casualties, though damage assessments are ongoing. Officials also warned of a potential oil spill in surrounding waters, raising concerns about environmental and supply disruptions.The incident in Dubai appears to form part of a wider wave of attacks. The Saudi Ministry of Defence said its air defences intercepted and destroyed four ballistic missiles launched toward the Riyadh region, underscoring the continued threat to critical infrastructure in the Gulf’s largest economy.In the UAE, authorities reported drone strikes and the fallout from air defence interceptions, including debris that caused a fire in a residential structure in Dubai’s Al Badia area, leaving several people with minor injuries. Meanwhile, air raid sirens were activated in Bahrain, signalling heightened alert levels across the region.The developments mark a significant intensification of hostilities, with attacks spanning multiple countries and targeting both energy infrastructure and civilian areas. The Gulf region, home to key oil export facilities and shipping routes, remains highly sensitive to such disruptions.Markets will be closely watching for further confirmation of the scale and coordination of the attacks, as well as any damage to energy infrastructure or shipping flows. The risk of supply disruptions, particularly if incidents spread to critical chokepoints or export terminals, is likely to keep geopolitical risk premia elevated across oil and broader commodity markets. This article was written by Eamonn Sheridan at investinglive.com.

Summary:FT reports (gated) broker for US Defence Secretary Hegseth explored defence ETF investment pre-Iran strike Morgan Stanley approached BlackRock over multimillion-dollar allocation Target fund focused on defence contractors benefiting from rising military spending Investment did not proceed due to platform availability constraints Timing likely to raise scrutiny given Hegseth’s central role in Iran campaign No suggestion of wrongdoing, but optics likely to draw attentionA broker acting for US Defence Secretary Pete Hegseth explored a multimillion-dollar investment in a defence-focused exchange-traded fund in the weeks leading up to the US-Israeli military campaign against Iran, according to a Financial Times report.The broker, at Morgan Stanley, is said to have approached BlackRock in February regarding a potential allocation into its Defense Industrials Active ETF, a fund designed to capture growth opportunities in companies benefiting from increased defence spending. The inquiry was flagged internally at BlackRock, according to people familiar with the matter, although the investment ultimately did not proceed.The ETF in question holds major US defence contractors, including RTX, Lockheed Martin and Northrop Grumman, alongside data and defence technology firms such as Palantir. These companies are closely tied to US government spending and are often viewed as beneficiaries of rising geopolitical tensions and military activity.The transaction did not go ahead as the fund was not yet available for purchase through Morgan Stanley’s platform at the time. It remains unclear whether alternative defence-related investments were subsequently pursued.The reported approach comes as Hegseth has played a prominent role in shaping US policy toward Iran and has been among the most vocal proponents of military action. The timing of the investment interest, shortly before the launch of strikes, is likely to attract scrutiny, particularly given the direct link between defence sector performance and government policy decisions.While there is no indication of any wrongdoing, such situations often raise questions around the intersection of public office and financial market exposure, especially in sectors directly influenced by geopolitical developments.The report also reflects a broader trend of heightened attention on trading activity ahead of major policy or military decisions, as markets increasingly respond to geopolitical catalysts in real time. This article was written by Eamonn Sheridan at investinglive.com.