USA

U.S. data during the last week was dominated by a tension between still-resilient activity and a renewed inflation shock. On the macro side, the ISM Services PMI for March came in at 54.0, signaling continued expansion, while the services new orders index stayed strong at 60.6 even as the employment component fell to 45.2, hinting at softer hiring beneath firm demand. Labor-market data were still decent but no longer as clean as earlier in the quarter: initial jobless claims for the week ended April 4 rose to 219,000. Inflation, however, was the key market-moving release: the March CPI rose 0.9% m/m and 3.3% y/y, while core CPI increased 0.2% m/m and 2.6% y/y, confirming that the Iran-war energy shock had already passed through to headline prices. Growth remained positive but slower than late 2025, with BEA’s latest estimate showing Q4 2025 real GDP at 0.5% annualized, and the Atlanta Fed’s GDPNow nowcasting Q1 2026 at 1.3% as of April 9. Equity markets ultimately looked through the inflation print and focused on easing ceasefire hopes plus strong AI-linked corporate signals such as TSMC’s revenue beat and CoreWeave’s Anthropic deal: by Friday, the S&P 500 closed at 6,816.89, the Nasdaq at 22,902.89, and the Dow at 47,916.57; for the week, the S&P 500 rose 3.6%, the Dow 3.0%, and the Nasdaq 4.7%, all their biggest weekly gains since November. In short, U.S. equities rallied on relief that geopolitical stress might not immediately worsen and on confidence ahead of earnings season, but the hotter CPI and collapse in consumer sentiment underscored that the macro backdrop had become much less comfortable for the Fed.

Europe

The last week was shaped by the same energy-geopolitical transmission channel, but with an even clearer sensitivity because of the region’s dependence on imported fuel. Eurostat’s flash estimate showed euro area inflation at 2.5% in March, up from 1.9% in February, with energy inflation jumping to 4.9% from -3.1%, while February unemployment ticked up to 6.2% from 6.1%. The broader growth backdrop remained modest rather than recessionary: Eurostat had estimated Q4 2025 GDP growth at 0.3% q/q, while the ECB’s March staff projections see 2026 euro area GDP growth at 0.9% after a downward revision, and Eurozone producer prices for February were still down 3.0% y/y, showing that the inflation spike was recent and energy-led rather than broad-based. Survey data pointed to sluggish momentum: S&P Global’s March Eurozone Composite PMI was at a 9-month low, with services barely expanding. Even so, equities recovered as ceasefire optimism offset macro anxiety. Reuters reported the STOXX Europe 600 closed at 614.84 and rose 3.0% for the week, its third straight weekly gain; the FTSE 100 ended flat on Friday at 10,600.5 but still logged a third consecutive weekly gain, while the CAC 40 and IBEX 35 added 0.2% and 0.6% respectively on the day. Sector leadership mattered: financials and tech supported the region, luxury stocks got a lift from Brunello Cucinelli’s revenue beat, while defense names fell on headlines about a possible Ukraine-Russia deal and energy-sensitive sectors stayed volatile. The result was a market that climbed despite weaker fundamentals, because investors treated the week less as a verdict on Europe’s economy and more as a relief rally from extreme geopolitical stress.

Japan

The macro message was mixed but still relatively constructive. Official data showed the labor market remained tight, with the February unemployment rate at 2.6%, but household demand was softer: real consumption expenditures for two-or-more-person households fell 1.8% y/y in February. External balances stayed supportive, with Japan posting a ¥3.93 trillion current-account surplus in February, driven mainly by a strong primary income surplus of ¥4.24 trillion even though the goods surplus narrowed sharply. Inflation pressures intensified further during the week: the Bank of Japan’s March Corporate Goods Price Index showed producer prices rising 0.8% m/m, reinforcing the view that imported energy costs were feeding into domestic pricing. That pushed markets to price roughly a 60% chance of a BOJ rate hike at the April 27–28 meeting, though by April 12 Reuters reported policymakers were increasingly torn between upside inflation risk and downside growth risk from the prolonged Middle East shock. Equities still rallied hard on relief that the U.S.-Iran ceasefire might hold: Reuters noted foreign investors bought ¥2.96 trillion of Japanese stocks in the week through April 4, and the Nikkei surged about 5.39% on Wednesday alone after the ceasefire announcement. The implication for the Nikkei 225 and TOPIX was clear: both were helped by a weaker yen, renewed foreign inflows, and relief on energy-trade disruption, but gains were capped by rising JGB yields and uncertainty over whether the BOJ would tighten into a supply shock. Japan therefore ended the week looking like a market with strong equity momentum but an increasingly difficult policy mix.

China

The week’s official data were the strongest among the four regions in terms of near-term cyclical stabilization, though the quality of that improvement still looked mixed. The National Bureau of Statistics reported that March manufacturing PMI rose to 50.4 from 49.0, moving back into expansion, while the non-manufacturing index improved to 50.1 and the composite output index also turned firmer. At the same time, price data showed reflation driven partly by imported energy: Reuters, citing official NBS data, reported March PPI rose 0.5% y/y, ending a 41-month streak of producer-price deflation, while CPI slowed to 1.0% y/y from 1.3% in February. China’s broader macro backdrop entering the week was still one of moderate recovery rather than acceleration: Reuters had earlier noted January-February industrial production up 6.3% y/y, retail sales up 2.8%, fixed-asset investment up 1.8%, and the official 2026 GDP growth target set at 4.5%–5.0%. For markets, that combination mattered. Mainland and Hong Kong equities benefited from two narratives at once: first, China was viewed as relatively more insulated than some peers from the global risk shock; second, improving PMI/PPI data suggested deflation pressure was easing. Reuters’ quote page showed the Shanghai Composite at 3,986.22 on April 10, and global market coverage noted that Asia-Pacific equities outside Japan had their best week since November 2022, reflecting a broad relief rally after the ceasefire. The Shanghai Composite and Hang Seng thus ended the week supported by better domestic data and hopes of geopolitical de-escalation, though the market remained vulnerable to any renewed rise in oil prices or disappointment on policy support.