Daily update
Daily update
- Financial markets are having to assess political risks—something markets are ill-equipped to do. US officials confirmed Israel had attacked Iran, with reports of an explosion in Isfahan. The market response was a classic (perhaps unthinking) safe-haven trade. Does Iran now respond? Iranian media is downplaying the attacks, and it might be difficult for Iran’s government to retaliate if the narrative in Isfahan is “nothing to see here”.
- Japanese March consumer price inflation slowed a little more than expected, but really this is just noise around the trend. German March producer price inflation remains in deflation territory—again as expected. The picture is consistent with the ongoing normalization of developed economy inflation.
- UK March retail sales were weaker than consensus expectations. Consumers still seem intent on punishing attempts at profit-led inflation—price increases are deterring consumption. UK retail sales data does not directly capture the pivot to spending on having fun as services are not included, but stronger clothing sales hint at this trend.
- The Federal Reserve’s financial stability report is due. This is not a market moving event, but more than a year after the failure of Silicon Valley Bank, has there really been any measure to address the threat of bank runs in a social media age?
