James Brodie
Head of Learning & Development, Flux
Headlines Hinting at De-escalation, Chicago PMI Falls, Global Stocks
Risk rebounds on de-escalation hopes; equities surge, yields fall, oil risk lingers as Middle East tensions and supply fears persist.
Headlines hinting at Middle East deescalations and Market sources have indicating that Trump 'is pulling out,' amidst a clear loss of support from key European states and a widening economic toll on the world sent risk soaring.
Equities bounced S&P500 up 2.9% yesterday and another r+0.9% so far this morning. The perma bulls had been looking for a headline to go all-in on and now they’re back. Whatever the news, Monday’s low, 6,316, becomes the critical support level if the conflict is prolonged, with resistance expected at 6,550. (Chart 1, Bloomberg). Bond yields also fall as inflation fears recede, for now, with the 2-yea down 30bp from Friday’s high, and the US OIS pricing now -12bp of cuts by year end, with UK still pricing +44bp hikes. Gold rallies 5% in 2 days while the dollar falls 1% from yesterday’s high, and the Kospi rallies 8.4% this morning.
Middle East update:
Trump is scheduled to deliver a prime-time Address to the Nation today, Wednesday, April 1, 2026, at 9:00 p.m. ET. Market sources have indicated that Trump 'is pulling out,' amidst a clear loss of support from key European states and a widening economic toll on the world.
Trump says Iran does not have to make a deal for the U.S. to end its war. “We’ll be leaving very soon… what happens in [Hormuz] we’ll have nothing to do with” Other countries can “fend for themselves” if they want gas or oil from the Persian Gulf.
Iran's president Pezeshkian: we're ready to end war, but want guarantees.
Iran hits jet fuel tanks at Kuwait airport.
UAE preparing to help us open Hormuz by force. UAE lobbying for UNSC resolution to authorize action: WSJ
Another oil tanker has been struck by Iran off the coast of Qatar
The final vessel carrying jet fuel into the United Kingdom arrives in the next 24 hours and there’s no more scheduled after that.
A stark reminder of when the Middle East tanker deliveries stop. (Chart Semafor, JP Morgan Commodities Research, Kpler)
Macro update:
Defying expectations, US consumer confidence improved this month, with the composite index rising from 91.0 to 91.8 (beating the consensus forecast of 87.9). But the measure tells two different stories: The current conditions component drove the entire upward surprise while the expectations component fell, and year-ahead anticipated inflation increased from 5.5% to 6.2%.
Chicago PMI falls from 57.7 to 52.8. This is a good proxy from US manufacturing, particularly the Mid-West obviously, but also historically correlated with US ISM.
JOLTS falls from 6.92m to 6.88m. More weaker employment data as hires and quits fall to 6-year lows. We have payrolls on Friday. (Chart 1, Bloomberg)
Oracle laid off between 20,000 and 30,000 employees yesterday.
Global stocks lost $12 trillion in March, the single-largest value wipeout on record in a single month
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Hormuz transits remain badly disrupted, with attacks on tankers at their highest weekly level since the war began.
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