Weekly Markets Monitor

Last week, markets focused on the Trump-Xi summit amid fading hopes of an Iran peace deal, while stronger-than-expected US inflation reinforced higher-for-longer rate expectations.

While geopolitics continued to dominate headlines last week, markets focused on strong earnings and supportive economic data.

The Fed, ECB, Bank of England, and BoJ all held rates steady last week, even as conflicting Middle East war headlines and sticky inflation clouded the outlook.

Strong US economic data and upbeat corporate earnings contrasted with weakening consumer confidence in the US and Europe last week. Uncertainties around the US–Iran conflict remained key in influencing market sentiment.

Geopolitics remained in focus last week, with signs of de-escalation between the US and Iran, boosting market sentiment. Better-than-expected economic updates across the US, Europe and China, alongside upbeat Q1 US corporate earnings further supported global markets.

Last week, the Middle East conflict continued to dominate market sentiment. Economic data signaled price pressures and slowing activity.

In a holiday-shortened and geo-politically volatile week, economic data came in stronger than expected—US jobs, manufacturing, retail sales, and confidence all beat forecasts. China showed improving economic momentum and India’s manufacturing output rose. At the same time, in the Eurozone, price pressures from the surge in energy costs are emerging.

Geopolitics and rising energy prices dominated markets last week, raising stagflation concerns. Early signs of fallout from the Middle East conflict are emerging, with softer PMIs across several economies. In the US, consumer sentiment weakened as inflation expectations rose. UK inflation held steady in February but faces upward pressure from higher energy costs, while Japan’s inflation eased on subsidies. China’s industrial profits rose, pointing to a firmer recovery

Last week was marked by major central bank meetings and escalating geopolitical tensions. Most central banks, including the Fed, ECB, BoE, BoJ, held rates steady but highlighted rising inflation risks and signaled a hawkish bias, while the RBA hiked. Economic data was mixed, stronger in China but weaker across other major economies.

Global markets faced a turbulent week as the West Asian conflict added to existing economic uncertainty. Economic data pointed to moderating US growth, flat UK GDP, and a sharp drop in Eurozone industrial production, while China continued to post large trade surpluses.

Global markets remained under pressure last week. In the US, unexpected job losses, rising unemployment and weaker retail sales pointed to softening momentum, while private credit concerns persisted and the VIX rose. Eurozone inflation surprised on the upside amid risks from rising oil prices.

Last week, global developments were marked by inflationary pressures in advanced economies, uneven growth momentum, and a sharp escalation of geo-political tensions. US price pressures remained firm despite softer activity. Europe posted mixed inflation and patchy demand, China signaled cautious domestic demand, while India’s growth stayed robust. Escalating US–Israel–Iran tensions disrupted key energy and transport routes, heightening geopolitical and market risks.

Last week’s updates pointed to an uneven but resilient global economic backdrop and persistent policy uncertainty. The US economy slowed in Q4, the trade deficit widened, inflation firmed, Fed divisions emerged and the Supreme court blocked global tariffs. Europe and Japan showed improving momentum and easing price pressures, while in India activity stayed steady, though trade deficits widened sharply.

Global data last week delivered a mixed set of signals. Stronger headline job gains and sticky inflation in the US dampened prospects for near-term Fed easing, even as weak retail sales and sizeable downward payroll revisions signaled softer underlying momentum. Europe’s growth diverged with the UK stagnating and the Eurozone steady, while in Asia Japan’s real wages remained under pressure, China’s weak demand and property slump persisted, and India’s inflation climbed.

Last week’s data showed US growth holding up despite a softening labor market, improving momentum in China, and weakness in Europe and Japan.