Market Updates

Financial markets remain volatile as Middle East tensions persist. Explore how negotiations, global politics, and economic data are shaping investor sentiment.

Over the weekend, the US and Iran negotiated under a 14-day ceasefire framework announced by US President Donald Trump, which is set to expire on 22 April. The situation remains highly uncertain.

Overnight, the US and Iran agreed to a two-week ceasefire that will reopen the Strait of Hormuz, a chokepoint through which a fifth of global oil flows. Risk assets quickly rebounded.

The conflict between the US/Israel and Iran inevitably draws comparisons to early 2022, when Russia invaded Ukraine and markets sold off sharply. Back then, the trigger was an inflation and interest rate spike driven by monetary and fiscal stimulus, supply-chain strains and booming demand once the economy reopened after the pandemic lockdowns.

Recent events once again show how quickly geopolitical developments can shift. The latest escalation in the Middle East is a reminder that markets can react abruptly. Only a week ago, comments from the US President suggesting that the conflict could end “very soon” briefly supported risk assets and pushed Brent oil prices down towards USD 90.

Investors spent the week watching the conflict between the US/Israel and Iran. The geopolitical significance is clear and remains a key downside risk.

Last week, oil prices rose as investors started to price in a higher chance of US military action against Iran. Brent rose above 70 dollars a barrel after Washington hinted that Tehran hadn’t met key demands in the nuclear talks, raising the prospect of forceful action.

The job report was the main story last week, and the release was much stronger than expected. But markets were wrong footed heading into this set of labour market data. Kevin Hassett, director of the US National Economic Council, had warned that markets should expect “slightly lower jobs numbers.”

The US Federal Reserve (Fed) meeting last week was uneventful. Policy rates stayed where they were. The real story came afterward, when the US President nominated Kevin Warsh to run the central bank.

Recent events in Greenland show how unpredictable geopolitics can be. Hours after ruling out a military option in Davos, President Trump announced a “framework for a future deal” after talks with NATO Secretary General Mark Rutte.

The year has only just begun, yet 2026 is already setting an unusual tone with markets feeling slightly out of sync. Emerging markets are pushing to new highs, gold is drifting upwards again and political noise from Washington is never far from the surface, causing wide swings in commodities.

Last week’s key macro data reinforced expectations that the Federal Reserve (Fed) will continue cutting rates in 2026. Inflation eased more than anticipated to 2.7% year-on-year, while unemployment rose to 4.6%, confirming a softer labour market. So far, markets have welcomed this slowdown as it gives the Fed room to ease further. As long as unemployment does not rise sharply, we remain confident that markets can absorb a gradual softening in labour market conditions.