Financial Market Newsletter

The European Central Bank (ECB) and the Bank of England (BOE) are expected to keep their policy rates unchanged this Thursday as they wait for a clearer assessment of the timing and scale of the energy shock associated with the conflict in the Middle East.

According to business surveys released on Thursday, manufacturers in the U.S and several parts of Asia and Europe reported an increase in orders as they rushed to meet demand from customers worried about rising prices and shortages of goods if the conflict in the Middle East drags on.

Japan’s trade activity continued to expand in March, but the outlook for the coming months remains highly uncertain because of the war in the Middle East.

The USD Index rose to a one-week high on Tuesday night as concerns grew that reaching a ceasefire agreement in the war between the U.S and Iran could take longer than expected, implying more prolonged disruption in the Strait of Hormuz.

According to recent forecasts, the People’s Bank of China may allow the CNY to appreciate to a record level this year in order to strengthen confidence in the currency and enhance the purchasing power of the economy.

The global economic impact of seven weeks of war in the Middle East will begin to show more clearly this week, through a second round of business surveys across multiple countries.

According to data released by the Government on Thursday, China’s gross domestic product (GDP) grew 5% YoY in Q1/2026, accelerating from 4,5% in Q4/2025.

Policymakers at the European Central Bank are leaning toward keeping interest rates unchanged in April, as there is still no clear evidence that the inflation shock driven by higher energy prices is spreading more broadly or becoming more severe.

The International Monetary Fund (IMF) warned in its latest forecast update that a prolonged conflict in the Middle East could push global economic growth down to levels typically seen only during recent recessions.