The infoshot to help kick-start your week
Gains halted by blockade announcement
When markets reopened after Easter, the conflict in Iran was inevitably top of the agenda. On Tuesday, President Trump threatened “A whole civilisation will die tonight” if a deal to reopen the Strait of Hormuz couldn’t be reached by his 8pm deadline. Thankfully, Trump backed down and agreed to a two-week ceasefire.
Markets responded well to the news, sending US and European markets up, and pushing Japanese indexes up around 7% week on week. Due to their reliance on oil exports that come via the Middle East, Japan is particularly affected by Hormuz’s closure. Last week, Prime Minister Sanae Takaichi announced another 20 days’ worth of oil from their national reserves will be released in May. On Tuesday, the Executive Director of the International Energy Agency (IEA), Fatih Birol, said the impact of the current crisis on the oil market is “more serious than the ones in 1973, 1979 and 2022 together”.
Over the weekend, Vice President JD Vance led US peace talks with Iran. No agreement could be reached following twenty hours of negotiations. In response, Trump has announced that the US navy will start blockading the Strait of Hormuz from 2pm today. Around 100 tankers have gone through the Strait since the conflict started, paying Iran up to $2mn each time. A US blockade would mean no ships could pass through the Strait. Oil prices have surged on the back of the news, with Brent and Crude going above $100 dollars a barrel again. So far today, European and Asian markets have fallen in response, and US futures are trending downwards.
US CPI and GDP numbers
Seven weeks into the war in Iran, we’re starting to see its impact on US inflation. On Friday, the US Bureau of Labour Statistics (BLS) released the Consumer Price Index (CPI) data for March. The energy part of the index rose 10.9% in March. Gasoline increased 21.2% over the month, its largest monthly increase since the CPI was first published in 1967. Fuel oil increased 30.7%, its biggest monthly jump in 26 years. Overall, the energy index has increased 12.5% over the last twelve months.
US economic growth slowed more than expected in Q4 2025. The latest release from the Bureau of Economic Analysis (BEA) showed GDP rose just 0.5%, down from the 0.7% forecast and a big drop off from the 4.4% growth seen in Q3. According to the BEA, increases in consumer spending and investment were offset by decreases in government spending and exports.
Coming up this week
Big US banks release earnings – Monday to Wednesday
Major US banks including Goldman Sachs, JP Morgan, Citigroup and Bank of America all release their Q1 earning reports this week. Their results may give more information about how the ongoing conflict in Iran is impacting the US economy. Following last week’s high inflation numbers, investors will be watching for changes in trading activity and what mergers and acquisitions are being lined up or postponed. They’ll also have an eye on any results related to the banks’ private credit arms due to concerns around weak lending standards and the AI investment boom.
US PPI (March) – Tuesday
Following last week’s CPI data, the US BLS will publish the latest Producer Price Index (PPI) tomorrow. Whereas the CPI measures inflation from the consumer’s perspective, the PPI measures it based on the money received by domestic producers and sellers. The current forecast is for the index to rise from 3.4% to 4.6%.
UK GDP – Thursday
The latest GDP figures from the Office for National Statistics (ONS) are set to be released on Thursday. Last time around, the ONS numbers showed the UK economy unexpectedly flatlined to 0% growth in January. With analysts expecting growth of 0.2%, we saw the pound fall and bond yields rise on the back of it. Forecasters are expecting 0.1% growth this time around.
Notice:
For regulated financial advisers and investment professionals only, Copia does not provide financial advice, and the contents of this document should not be taken as such.
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated but is not an indicator of potential maximum loss for other periods or in the future.
