The S&P Global Egypt PMI fell to 48.0 in March 2026 from 48.9 in February, marking the lowest reading since April 2024. Non-oil private sector activity extended its decline, broadly in line with the survey’s long-run average of 48.2, as output and new orders dropped at the fastest pace in nearly two years amid the Middle East war, which dampened demand and fueled price pressures. Purchasing activity edged up slightly after two monthly reductions, while employment stabilized following job cuts late last year. On prices, input cost inflation accelerated to the joint-sharpest in 18 months, driven by higher fuel and input prices linked to the war and a stronger US dollar. Selling prices rose at the steepest rate since May 2025, though increases remained modest and near the long-run average. Looking ahead, business confidence fell for the first time in the survey’s history, though pessimism was mild, with only a few firms citing war-related uncertainty as the reason for negative forecasts.

Egypt Non-Oil Private Sector PMI Drops to Near 2-Year Low

Riyad Bank Saudi Arabia’s PMI plunged to 48.8 in March 2026 from 56.1 in the prior month, signaling the first drop in the non-oil private sector in near six years and the steepest downturn since a record low in March 2020. The decline stemmed from Middle East war disruptions that strained supply chains and delayed client spending. New orders stalled, export demand shrank the most in six years, and output growth eased. Buying levels slowed, though inventories rose, reflecting limited stockpile reduction. Employment rose but at a weaker pace, while delivery times lengthened the most since June 2020 amid shipping delays and higher fuel costs. Supply constraints lifted backlogs to their highest since July 2018. On inflation, input cost rose the least in a year on softer wage pressures, though fuel and freight costs raised purchasing and selling prices. Sentiment dipped to its lowest since June 2020, as war concerns overshadowed support from government spending.

Saudi Non-Oil PMI Tumbles to Second Lowest on Record

Vietnam’s trade balance reversed to a deficit of USD 0.67 billion in March 2026, compared with a surplus of USD 1.70 billion in the same month a year earlier. Year-on-year, exports rose 20.1% to USD 46.44 billion, while imports grew faster at 27.8% to USD 47.11 billion. For the first quarter as a whole, exports increased 19.1% to USD 122.93 billion, while imports climbed 27.0% to USD 126.57 billion, resulting in a cumulative trade deficit of USD 3.64 billion.

Vietnam Trade Balance Swings to Deficit in March

Vietnam’s GDP expanded 7.83% year-on-year in Q1 2026, slowing from a 8.46% growth in Q4 of 2025. Growth was broad-based, with all sectors posting solid gains, including industry and construction (8.92%), services (8.18%), and agriculture (3.58%).

Vietnam GDP Growth Eases to 7.83% in Q1

International arrivals to Vietnam rose 1.3% year-on-year to 2.08 million in March 2026, marking a sharp slowdown from the 17.7% surge in the previous month. The moderation was mainly due to a 6.6% decline in visitors from Asia, weighed by steep drops from China (-23.5%), South Korea (-5.3%), and Taiwan (-14.6%), despite gains from Japan (18.6%), Malaysia (34.7%), and Thailand (5.7%). By contrast, arrivals from America increased 18.9%, supported by the U.S. (18.5%) and Canada (27.0%), while European tourists jumped 34.7%, led by Russia (163.4%) alongside modest gains from the UK (3.0%), France (2.3%), and Germany (15.2%). Visitors from Australia rose 27.7%, and those from Africa grew 17.6%. For the first quarter as a whole, international arrivals climbed 12.4% year-on-year to 6.76 million.

Vietnam Tourist Arrivals Up 1.3% YoY in March

Vietnam’s annual inflation rate accelerated to 4.65% in March 2026 from 3.35% in the previous month, marking the highest figure since January 2023.

Vietnam Inflation Rate Highest In Over 3 Years

Retail sales in Vietnam rose 12.1% year-on-year in March 2026, accelerating from 8.5% in the previous month and marking the fastest growth since March 2023. The solid pickup was broad-based, led by retail goods (12.4% vs 8.8% in February) and accommodation and food services (13.9% vs 9.7%), while tourism-related activities remained strong (11.5%, though easing from 13.8%) and other services also improved (7.6% vs 4.4%). For the first three months of the year, retail trade increased 10.9% compared with the same period in 2025.

Vietnam Retail Sales Grow the Most in 3 Years

Vietnam’s industrial production rose 6.9% year-on-year in March 2026, sharply picking up from an upwardly revised 0.6% gain in the previous month, driven by stronger activity as operations resumed after the Lunar New Year holiday. Output growth accelerated significantly in manufacturing (7.5% vs 1.2% in February) and water supply, waste management, and wastewater treatment (12.1% vs 1.0%). At the same time, activity rebounded in mining and quarrying (2.6% vs -4.0%) as well as in electricity and gas supply (4.6% vs -1.2%). On a monthly basis, industrial output surged 18.8%. For the first quarter of the year, industrial production rose 9.0% from the same period in 2025.

Vietnam Industrial Output Growth Quickens Strongly

The FTSE MIB Index fell -90 points or 0.20 percent on Thursday to close at 45625 points..

The FTSE MIB Index Closes 0.20% Lower

Next week, the conflict with Iran will remain in focus as it enters its sixth week. Traders will continue to assess prospects for de-escalation, as well as any concrete developments toward reopening the Strait of Hormuz, following ongoing back-and-forth in recent weeks. In the US, attention will turn to the FOMC minutes, CPI data, the ISM Services PMI, the preliminary Michigan Consumer Sentiment reading, and the PCE report. Investors will also look to fresh corporate earnings, including results from Delta Air Lines, as the earnings season gathers momentum mid-month. Elsewhere, key releases include China’s CPI, Germany’s factory orders, and the monetary policy decision from the Reserve Bank of India.

Week Ahead - Apr 6th

The S&P Global US Services PMI fell to 49.8 in March of 2026 from 51.7 in the previous month, revised lower from the preliminary estimate of 51.1, signaling the first contraction in the sector in over three years. The decline came amid the weakest growth in new business since April 2024, as firms cited reduced client confidence and softer demand, partly linked to the impact of the Middle East conflict. Export activity also deteriorated further, with tariffs and geopolitical tensions weighing on trade. Business sentiment weakened to a five-month low as rising energy costs raised concerns over inflation and consumer spending. Employment edged lower for the first time since December, reflecting caution among firms. Input cost inflation accelerated to its highest level this year, driven largely by higher energy prices, while companies continued to pass on rising costs to clients, pushing selling price inflation to an eight-month high.

US Business Activity Slips on Inflation, Middle East War

The S&P Global US Composite PMI was revised sharply lower to 50.3 in March 2026 from a preliminary 51.4, the lowest reading since September 2023, compared to 51.9 in February. The reading pointed to a sharper slowdown in private sector activity, which nearly stalled, as a renewed contraction in service sector activity (49.8 vs 51.7) offset a stronger uptick in manufacturing output. Also, growth in new work eased to a three-month low, while business confidence in the coming 12 months was the most subdued since last October. In turn, private sector employment fell for the first time in just over a year. Input price inflation, meanwhile, accelerated to the highest seen in 2026 so far whilst output charges rose at a stronger pace.

US Composite PMI Revised Sharply Lower to 2023-Lows

The dollar index edged above 100 on Friday after stronger than expected US jobs data reinforced expectations that the Federal Reserve will keep interest rates higher for longer. Nonfarm payrolls increased by 178,000 in March, the strongest gain since late 2024, while the unemployment rate unexpectedly fell to 4.3%, partly reflecting a decline in labor force participation. The data pointed to a stabilizing labor market even as the Iran conflict began. Meanwhile, geopolitical tensions remained in focus as President Donald Trump escalated rhetoric against Iran, threatening strikes on key infrastructure, while reports indicated further attacks across the Gulf region. Rising energy prices are adding to inflation concerns, keeping markets cautious. Trading activity is likely to remain subdued due to the Good Friday holiday, with US equity markets closed and bond trading on a shortened schedule.

DXY Rises Above 100

Futures on the three major US stock indexes were down around 0.2% on Friday, as markets remained closed for the Easter holiday, with investors digesting a stronger-than-expected jobs report and developments in the Middle East. The US economy added 178K jobs in March, nearly three times market forecasts of 60K while the unemployment rate edged down to 4.3% and wage growth slowed. The data reinforced expectations that the Fed will keep the federal funds rate unchanged this year. Investors also continued to assess developments in the Middle East. US President Trump intensified his rhetoric against Iran, threatening to target the country’s infrastructure, including bridges and power plants, while Iran reportedly struck additional sites in Arab Gulf states. On the week, the major averages posted gains, with the S&P 500 rising 3.4%, the Dow Jones adding nearly 3% and the Nasdaq soaring 4.4%.

US Futures Fall on Good Friday

The yield on the US 10-year Treasury note rose to 4.35% in a shortened session on Friday, moving further away from two-week lows reached earlier in the week, following a stronger-than-expected jobs report. The US economy added 178K jobs in March, nearly three times market forecasts of 60K while the unemployment rate edged down to 4.3% and wage growth slowed. The data reinforced expectations that the Fed will keep the federal funds rate unchanged this year. Investors also continued to assess developments in the Middle East. US President Trump intensified his rhetoric against Iran, threatening to target the country’s infrastructure, including bridges and power plants, while Iran reportedly struck additional sites in Arab Gulf states. Elevated energy prices are fuelling concerns about a potential inflationary spiral. Trading volumes are expected to remain light due to the Good Friday holiday, with US equity markets closed and bond markets operating on a shortened schedule.

US Treasury Yields Rise After Jobs Report

Average hourly earnings for all employees on US private nonfarm payrolls rose by 9 cents, or 0.2%, to $37.38 in March 2026, marking the smallest increase in three months. This followed 0.4% gains in both January and February and came in below market expectations of a 0.3% rise. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 5 cents, or 0.2 percent, to $32.07. Year-on-year, average hourly earnings have increased by 3.5% in March, the least since May 2021, following a 3.8% rise in February and compared to forecasts of 3.7%.

US Wage Growth Slows in March

The US unemployment rate fell to 4.3% in March 2026 from 4.4% in February, below market expectations of 4.4%. The number of unemployed decreased by 332,000 to 7.239 million, while total employment fell by 64,000 to 162.85 million. The labor force declined by 396,000 to 170.09 million, pushing the participation rate down 0.1 percentage point to 61.9%. Meanwhile, the broader U-6 unemployment rate, which includes discouraged and underemployed workers, rose to 8% from 7.9%.

US Jobless Rate Falls to 4.3% in March

The US economy added 178,000 jobs in March 2026, the strongest gain since December 2024, following a revised decline of 133,000 in February, when a strike in the healthcare sector weighed on employment. The figure came in well above market expectations of 60,000. Job gains were concentrated in healthcare, construction, and transportation and warehousing, while federal government employment continued to decline. Overall, payroll employment has shown little net change over the past 12 months.

US Nonfarm Payrolls Rise to 178K

The yield on the US 10-year Treasury note edged up to 4.32% in a shortened session on Friday, but hovering near two-week lows reached earlier in the week, as investors continued to assess developments in the Middle East and their potential impact on the economy and monetary policy, while awaiting the latest jobs report. US President Donald Trump intensified his rhetoric against Iran, threatening to target the country’s infrastructure, including bridges and power plants and Iran reportedly struck additional sites in Arab Gulf states. Elevated energy prices are fuelling concerns about a potential inflationary spiral, which could prompt the Fed to adopt a more hawkish stance. Markets are currently pricing in the Federal Reserve holding the federal funds rate unchanged this year. Trading volumes are expected to remain light due to the Good Friday holiday, with US equity markets closed and bond markets operating on a shortened schedule.

Treasury Yield Edges Up in Shortened Session

The annual inflation rate in Armenia accelerated for a fourth consecutive month to 4.5% in March 2026, the highest since March 2023, from 4.3% in the previous month. Prices increased at a faster pace for food and non-alcoholic beverages (7.8% vs 6.5%), clothing and footwear (1% vs 0.6%), restaurants and hotels (4.3% vs 4%), and communication (0.7% vs 0.3%) and rebounded for furnishing and household equipment (0.6% vs -0.1%). On the other ahdn, a slowdown was seen in cost for alcoholic beverages and tobacco (6.8% vs 10.3%), miscellaneous goods and services (2.4% vs 2.6%) and transport (2.1% vs 3.6%) and inflation steadied for health (4.5%) and education (8.3%). Prices went down for housing and utilities (-0.3% vs 0.5%) and recreation and culture (-0.7% vs -0.4%). Compared to the previous month, the CPI rose 0.7%.

Armenia Inflation Rate Reaches 3-Year High

Slovenia recorded a trade deficit of EUR 587.2 million in February 2026, with exports falling more sharply than imports, particularly in trade with EU non-member countries. Exports totaled €5.2 billion, down 38.9% year-on-year, as shipments to EU countries remained stable. In comparison, those to non-EU markets plunged 56.7%, largely due to weaker processing-related trade, which had been elevated a year earlier. Imports stood at €5.8 billion, down 9.7%, with purchases from EU partners down 1.3% and from non-EU countries falling 16.1%. In the first two months of the year, exports dropped 32.8% and imports 3.8%, with the deficit widening to €1.8 billion.

Slovenia Trade Balance Shifts to Deficit

Thailand’s Business Sentiment Index fell to 47.7 in March 2026, the lowest level in seven months, down from 49.6 in February, as sentiment was weighed down by the impact of the Middle East conflict. Total order books contracted (47.9 vs 52.2) and export conditions weakened (45.5 vs 48.2) while output prices went up (50.6 vs 49.7). The hotel and restaurant sector was particularly hit, with sentiment falling to an eight-month low, owing to cancellations of flight tickets and hotel bookings by Middle Eastern tourists, along with the suspension of direct flights from Middle Eastern airlines to Thailand. Also, the manufacturing index weakened, led by plastics pellets and packaging industries, as the closure of the Strait of Hormuz pushed energy prices higher, affecting transportation costs and imported feed stocks for plastic manufacturing, such as crude oil and naphtha. Also, the 3-month expected BSI dropped to 44.2, reflecting concerns over a potentially prolonged situation.

Thailand Business Confidence Declines Amid Middle East Conflict

The FAO Food Price Index increased for a second straight month to 128.5 index points in March 2026, the highest since September, from an upwardly revised 125.5 in February. Price indices across all commodity groups rose to varying degrees, reflecting not only underlying market fundamentals but also responses to higher energy prices linked to the conflict escalation in the Near East.

World Food Prices Rise for 2nd Month

The annual inflation rate in Georgia edged down to 4.3% in March 2026, the lowest level in three months, from 4.6% in February. Food and non-alcoholic beverages remained the main driver of inflation, although price growth slowed to 7.5% from 9.5% in the previous month. This was largely due to increases in fish (21.2%), fruit and grapes (13.4%), bread and cereals (9.6%), and meat (9.6%). Transport inflation accelerated to 4% (vs 0.9%), driven by higher costs for transport services (7.3%) and the operation of personal transport equipment (5.7%). Meanwhile, prices for miscellaneous goods and services rose by 9.8%, the same as in February, due to personal effects (58.1%), as well as insurance (8.5%) and personal care (4.3%). Alcoholic beverages and tobacco prices increased by 6.2%, up from 4.3% in the previous month. In contrast, inflation moderated for health (4.2% vs 5.9%) and restaurants and hotels (7.0% vs 7.2%). Compared to the previous month, the CPI went up 0.8%.

Georgia Inflation Rate Slows to 3-Month Low

The annual inflation rate in Turkey eased to 30.87% in March 2026, down from 31.53% in February which was the highest level since October 2025, and below market expectations of 31.4%. The softer-than-expected reading suggests that anticipated increases in fuel prices, along with weather-related pressures on food inflation, have so far been more subdued. A slowdown was seen in prices for food and non-alcoholic beverages (32.36% vs 36.44% in January), housing (42.06% vs 42.33%), education (51.97% vs 55.78%), and hotels, cafes and restaurants (31.66% vs 32.93%). On the other hand, prices rose faster for transport (34.35% vs 28.86%), health (29.98% vs 29.26%), information and communication (24.12% vs 22.41%), recreation and culture (27.4% vs 27.24%). Compared to the previous month, the CPI increased 1.94%, the least in three months and compared to 2.96% in February and forecasts of 2.32%. Transport recorded the biggest increase (4.52%) and made the largest impact.

Turkey Inflation Rate Slows More than Expected in March

The Shangai Composite Index decreased -38 points or 0.96 percent on Friday to close at 3882 points. The decline was led by Kangmei Pharma (-4.37%), LONGi Green (-3.97%) and Aluminum Corporation of China (-3.94%). On the upside, the strongest performers were China Fortune (6.06%), Sanan Optoelectron (2.89%) and Inner Mongolia BaoTou Steel (1.91%).

The Shangai Composite Index Closes 0.96% Lower

The annual producer inflation rate in Turkey rose to 28.08% in March 2026, the highest since December 2024, from 27.56% in the previous month. Price growth accelerated in manufacturing (39.43% vs 27.98% in February), mining and quarrying (32.28% vs 31.88%), and water supply (38.25% vs 38.22%). Meanwhile, inflation eased in electricity, gas, steam, and air conditioning (14.32% vs 22.53%). By industrial groupings, inflation picked up for non-durable consumer goods (31.95% vs 31.57%), and energy (27.18% vs 20.68%). In contrast, it slowed for intermediate goods (25.84% vs 26.09%), durable consumer goods (30.45% vs 32.14%), and capital goods (27.18% vs 29.51%). On a monthly basis, producer prices increased 2.30% in March, down from 2.43% in February.

Turkey Producer Inflation Picks Up to 15-Month High

Industrial production in France fell 0.7% month-on-month in February 2026, reversing a downwardly revised 0.2% gain in the previous month and defying market expectations of a flat reading. Manufacturing output stalled after rising 0.2% in January, as a contraction in transport equipment (-0.8% vs 8.5%) was offset by a rebound in other industrial manufacturing (0.4% vs -1%) and a softer decline in agri-food products (-0.8% vs -0.9%). Overall industrial activity was further weighed down by mining, quarrying, energy, and water supply, which dropped sharply to 3.2% from a 0.3% increase, driven by a decline in electricity, gas, steam, and air conditioning (-3.2% vs 0.2%). Meanwhile, construction output decreased at a softer pace (-1.3% vs -1.4%), reflecting more moderate declines in civil engineering (-5.3% vs -6.7%) and building construction (-0.4% vs -3.6%). On a yearly basis, industrial output slipped 0.3% from a 1.9% gain in January 2026.

France Industrial Output Unexpectedly Falls

The Nikkei 225 climbed 1.3% to close at 53,123, while the broader TOPIX rose 0.9% to 3,645 on Friday, trimming weekly losses to 0.4%, as sentiment improved on global efforts to restore Gulf oil shipments disrupted by the war in Iran. Multiple countries moved to revive flows through the Strait of Hormuz after US President Trump signaled a more aggressive stance, even as the conflict, ongoing since late February, continues to drive volatility in energy markets. Hopes of a partial reopening also helped ease crude prices in Tokyo, offering support to equities, particularly given Japan’s heavy reliance on imported energy. Improving sentiment around the Middle East, alongside optimism over AI-driven growth, lifted expectations ahead of the upcoming earnings season, with investors looking for confirmation of solid corporate performance. AI-related stocks led the advance, with heavyweights such as Advantest and Tokyo Electron up 2% and 1.1%, respectively.

Japanese Shares Trim Weekly Losses

The US economy likely added 60,000 jobs in March 2026, partially reversing the 92,000 decline recorded in February, when a strike weighed on employment. Around 31,000 striking nurses at Kaiser Permanente in California and Hawaii returned to work in late February, which should support a rebound in healthcare payrolls in March. Employment growth is also expected to recover in construction, as well as in leisure and hospitality, following weather-related declines during the winter. The jobs report is also projected to show the unemployment rate holding steady at 4.4%. Meanwhile, wages likely increased by 0.3% month-on-month, after rising 0.4% in February. On an annual basis, wage growth is expected to ease slightly to 3.7%, from 3.8% in the previous month.

US Jobs Report Expected to Show Payroll Rebound

The Nikkei 225 Index rose 709 points or 1.35 percent on Friday to close at 53172 points. Leading the gains are Taiyo Yuden (12.35%), Hino Motors (12.04%) and Furukawa Electric (9.87%).

The Nikkei 225 Index Closes 1.35% Higher

Russia’s S&P Global Composite PMI fell to 48.8 in March 2026 from 50.8 in February. This marked the first contraction since September 2025, dragged by renewed downturn in new orders, as a drop in manufacturing new sales outweighed broadly unchanged new work at services firms. Private sector firms also reduced their staffing numbers, with job shedding recorded in both manufacturing and services sectors, even as backlogs of work increased. Regarding prices, input costs and output charges rose markedly in March but at much softer rates than those seen at the start of the year following the change to the VAT rate. Looking ahead, private sector firms were more confident of a rise in output over the coming year than in February. However, the degree of optimism remained below the series trend.

Russia Composite PMI Contracts for 1st Time in 5 Months

The S&P Global Russia Services PMI fell to 49.5 in March 2026 from 51.3 in February, entering contraction territory and marking the first decline in six months. The drop was driven by softer demand conditions, with new orders broadly unchanged. Some firms reported stable customer numbers, while others cited weaker purchasing power, rising uncertainty, and lost business linked to the Middle East conflict. Meanwhile, employment declined at the fastest pace since early 2023, as firms cut costs amid weaker sales. On the price front, input costs and output charges both increased sharply, although inflation eased for a second consecutive month from January’s VAT-driven spike. Higher raw material and supplier prices, along with tax pass-through effects, remained key drivers of cost pressures. Looking ahead, business confidence improved from February, though overall sentiment remained relatively subdued by historical standards.

Russia Services Contract for First Time in Six Months

Bangladesh has introduced new measures to curb energy use and ease pressure on its power system as the Middle East conflict disrupts global fuel markets. Approved by the cabinet on Thursday, government offices will now run from 9 a.m. to 4 p.m., while markets and shopping centers must close by 6 p.m. to cut electricity demand. Authorities also ordered reductions in non-essential public spending and urged industries to limit power use, including excessive lighting.  The government will allow duty-free imports of electric school buses and offer incentives for participation. Dhaka has rationed fuel, restricted vehicle sales, and shortened fuel station hours to manage shortages amid panic buying, hoarding, and long queues.

Bangladesh Acts to Contain Energy Crunch

U.S. stock futures fell slightly on Friday after a mixed Wall Street session, as investors stayed cautious going into the Good Friday break amid persistent Middle East tensions. President Trump warned the conflict with Iran could last weeks and vowed to strike Tehran “extremely hard,” remarks that lifted oil prices and stoked inflation concerns. On trade, Trump signed an executive order paving the way for tariffs of up to 100% on certain patented drugs if companies fail to reach agreements with his administration, while reaffirming plans for 50% duties on imported steel, aluminum, and copper. In corporate news, Tesla reported that first-quarter deliveries and production rose year-on-year but fell from the prior quarter, sending shares down more than 5%. Meantime, Globalstar jumped 13% on reports that Amazon may consider an acquisition. The S&P 500 secured its first weekly gain since the war with Tehran began, while the Dow and Nasdaq also posted advances.

U.S. Equity Futures Retreat in Quiet Holiday Trade

The S&P Global UAE PMI fell to 52.9 in March 2026 from 55.0 in February, marking the joint-lowest reading since mid-2021 but still indicating a modest improvement in non-oil private sector conditions. The decline reflected a sharp slowdown in output growth, as conflict in the Middle East disrupted supply chains and weighed on demand. New orders continued to rise, though at a seven-month low, with softer tourism and rising uncertainty cited by firms. Supply conditions deteriorated notably, with delivery times lengthening for the first time in over four years due to shipping disruptions, particularly around the Strait of Hormuz. At the same time, input costs surged, prompting firms to increase selling charges at the fastest pace in nearly 11-and-a-half years. Confidence also weakened to a five-year low, reflecting concerns over prolonged disruptions, even as long-term growth prospects and government spending plans continued to offer some support.

UAE Non-Oil Private Sector Growth Eases

Malaysian palm oil futures edged higher to hover around MYR 4,800 per tonne, heading for a fifth straight weekly advance of near 4% so far. Prices were supported by firmer edible oils in Dalian markets and elevated crude oil after U.S. President Donald Trump vowed continued strikes on Iran, boosting biodiesel-linked demand expectations. Export momentum added near-term support, with cargo surveyors estimating shipments surged 44%–57% from February. In Indonesia, the world’s top producer, official data showed double-digit export growth in February as the industry prepares for a higher B50 biodiesel mandate in July. Gains, however, were capped by weaker demand from top consumer India, where March palm oil imports fell 19% to a three-month low as refiners delayed purchases amid high prices. Caution also grew ahead of key data in China, with CPI and PPI due next week, underscoring uncertainty for one of the market’s largest buyers.

Palm Oil Set for Fifth Weekly Gain

The Japanese yen edged dangerously close to the 160-per-dollar mark on Friday, weighed down by growing uncertainties over the Bank of Japan's policy outlook. The BOJ has signaled a possible rate hike this month but faces questions over whether it will provide clear guidance ahead of the April 28 meeting. Under Governor Kazuo Ueda, the bank has rarely held policy steady when markets were expecting a move. Traders are pricing in roughly a 70% chance of a rate increase, meaning a hold could unsettle global markets already jittery over Middle East tensions. Adding to the pressure, Finance Minister Satsuki Katayama flagged rising speculative activity in currency and crude oil markets, linking the volatility to US President Donald Trump’s renewed threats against Iranian infrastructure. She warned that the government is ready to take bold measures if market disruptions persist. Despite recent declines, the Japanese yen remains on track for a weekly gain.

Japanese Yen Approaches 160 Threshold

The Indian rupee steadied around 92.9 per USD, holding its recent gains in thin holiday trading, but headed for a sharp weekly rise amid tighter measures by the central bank to curb speculative bets. The rally has been underpinned by a series of Reserve Bank actions to restrict speculative FX trading, including curbs on forward transactions and tighter limits on banks’ foreign exchange positions. These steps have triggered dollar selling in the onshore market and helped support the rupee, while also tightening hedging conditions and widening gaps with offshore pricing. Elsewhere, hopes that the Strait of Hormuz would partially reopen supported sentiment. Iran and Oman are said to be developing a protocol to “monitor transit” through the strategic waterway, a move aimed at easing regional tensions. India and other countries are also actively negotiating with Tehran to ensure the safe passage of vessels, while also forming small diplomatic circles and exploring barter-style agreements.

Rupee Set for Sharp Weekly Rise

The Indonesian rupiah hovered near the key IDR 17,000 level on Friday in holiday-thinned trade, weighed by a broadly stronger U.S. dollar amid persistent Middle East tensions. U.S. President Trump said the war with Iran could last another two to three weeks, though he signaled it was nearing an end. Caution also prevailed ahead of March's forex reserves data, following February’s drop to a three-month low. Subdued exports in February alongside resilient imports during festive period underscored external pressures. Inflation risks also grew amid elevated oil prices, even as annual figures eased to 3.48% in March, back within Bank Indonesia’s target range. As a net oil importer, Indonesia remains vulnerable to sustained energy costs, which could widen the fiscal deficit amid spending plans under President Prabowo’s programs. Authorities are exploring measures to limit the impact, while Bank Indonesia has moved to curb rupiah speculation after cutting rates by 150bps since September 2024.

Rupiah Near 17,000 on Oil Risks, Fiscal Concerns

The Shanghai Composite dropped 0.8% to 3,887 on Friday, while the Shenzhen Component edged down 0.1% to 13,474, with both benchmark indices on track for weekly losses as investor caution persists amid the prolonged Middle East conflict. Tensions in the region remain high, though Iran and Oman are reportedly developing a protocol to “monitor transit” through the strategic waterway, an effort aimed at easing regional strains. Meanwhile, China and Pakistan are advocating for their own multi-point diplomatic plan, while Iran continues to maintain tight control over the shipping lane. Domestically, RatingDog revealed that China's composite PMI fell to 51.5 in March from 55.4 in February, as both manufacturing (50.8 vs. 52.1) and services (52.1 vs. 56.7) sectors lost momentum. Among individual stocks, Contemporary Amperex Technology (-3.3%), BYD (-1.6%), Industrial and Commercial Bank of China (-1%), and Bank of China (-1.4%) were among the worst performers.

China Stocks Head for Weekly Losses

Foreign direct investment (FDI) by international companies in South Korea surged 82.9% from a year earlier to a record $7.14 billion in Q1 2026, up from $3.9 billion recorded during the January–March period of last year, data from the Ministry of Trade, Industry & Resources showed on Friday. New FDI commitments edged up 0.1% year-on-year to $6.41 billion, marking the second-highest figure for a first quarter, as Yonhap News Agency reported. By industry, FDI pledges in the service sector rose 21.5% year-on-year to $4.33 billion through March, driven by robust demand in finance, retail, and communications, while those in the manufacturing sector plunged 47.6% to $1.24 billion. By country, fresh investment pledges from the U.S. increased 20.9% to $1 billion. In contrast, FDI pledges from the EU fell 4.1% to $1.43 billion, while those from Japan and China slumped 71.1% and 19.4%, respectively. South Korea received a record-high combined $36 billion in FDI pledges in 2025.

South Korea FDI Jumps 82.9% in Q1

The offshore yuan edged higher to around 6.88 per dollar on Friday, trimming gains from the previous session as market sentiment improved on growing hopes for the reopening of the Strait of Hormuz. Iran and Oman are said to be developing a protocol to “monitor transit” through the strategic waterway, a move aimed at easing regional tensions. Elsewhere, countries such as India and the Philippines are actively negotiating with Tehran to ensure the safe passage of vessels, while also forming small diplomatic circles and exploring barter-style agreements. Meanwhile, China and Pakistan are advocating for their own multi-point diplomatic plan, as Iran maintains tight control over the shipping lane. Domestically, RatingDog data showed China’s composite PMI fell to 51.5 in March from 55.4 in February 2026, as both manufacturing (50.8 vs 52.1) and services (52.1 vs 56.7) sectors slowed. Over the week, the yuan is poised for a weekly gain, breaking a four-week losing streak.

Offshore Yuan Set for Weekly Gains

India would cut import duties and regulate exports, if necessary, to ensure adequate domestic supplies of essential products whose availability has been restricted by the war in the Middle East, the head of foreign trade said on Thursday, as Reuters reported. The conflict, which began at the end of February after the U.S. and Israel attacked Iran, has effectively closed the Strait of Hormuz, which typically handles about 20% of the world’s oil flows. As a result, energy and freight costs have surged, and global supply chains are under severe strain. The Indian government on Thursday removed customs duties on several critical petrochemical products until June 30, in light of the ongoing war in the Middle East and the resulting disruptions in global supply chains, according to The Economic Times.

India May Cut Import Duties to Ensure Local Supplies

The RatingDog China General Services PMI eased to 52.1 in March 2026 from a near three-year high of 56.7 in February, coming in below the expected 53.7. This marks the softest services activity expansion in three months. New business continued to grow, driven by domestic demand and new client projects, though the pace was the slowest since April 2025. International new business fell slightly following strong growth in the first two months of the year. Outstanding work increased marginally, while firms adjusted staffing levels downward amid slower growth. Input cost pressures remained mild, allowing service providers to reduce selling prices. Business confidence stayed positive, supported by expectations of improved market conditions and expansion plans.

China Services Growth Slows in March

China’s RatingDog China General Composite PMI fell to 51.5 in March 2026 from February’s 33-month high of 55.4. Despite the decline, the reading remained broadly in line with the two-year average, indicating continued expansion with growth still supported across both manufacturing and services. Total new orders rose at a slower pace, though gains in both sectors helped sustain overall demand. Backlogs of work increased at the fastest rate in six months, pointing to rising capacity pressures. Employment, however, continued to edge lower overall, as gains in manufacturing jobs were not enough to offset declines elsewhere. On the price front, input cost inflation accelerated to its strongest level since May 2022, largely driven by a sharp rise in manufacturing costs. Meanwhile, output charge inflation eased slightly from February and remained close to its long-run average, suggesting limited pass-through of higher costs to customers.

China RatingDog Composite PMI Drops from 33-Month Peak

US light vehicle sales rose to a seasonally adjusted annual rate of 16.3 million units in March 2026, up from 15.8 million in February. The gain reflected stronger demand for light trucks, climbing to 13.6 million units (vs. 13.1 million in February), while auto sales were largely unchanged at 2.7 million units. On a not-seasonally-adjusted basis, total vehicle sales reached 1.433 million units in March, up from 1.224 million in February. The improvement marks a steady recovery following early-year softness, as buyers adjusted to market conditions and seasonal buying patterns. Autos accounted for 237 thousand units in March, while light trucks totaled 1.167 million units, contributing to a light vehicle total of 1.404 million units.

US Light Vehicle Sales Rise in March

The Australian Dollar was little changed to around $0.691 on Friday amid thin holiday trading volume, but on track for a modest weekly rise on hopes of de-escalation in the Middle East war and that the Strait of Hormuz could partially reopen. Reports indicated that Iran is drafting a protocol with Oman to monitor tanker traffic through the crucial waterway, which has been effectively shut since the start of the conflict. The plan would place transit under joint supervision and could require ships to pay tolls to Tehran. Still, uncertainty lingered as oil prices remained elevated after President Trump vowed to escalate the conflict in the coming weeks. Economists warned that higher energy costs are set to lift inflation, forcing downgrades to growth forecasts and raising expectations of further rate hikes as stagflation risks increase. Markets are pricing about a 70% chance of a 25bp hike to the Reserve Bank’s 4.1% cash rate in May, with rates expected to peak around 4.6% by September.

Aussie Dollar Heads for Weekly Gain

The dollar index hovered around 99.9 on Friday as investors awaited the March jobs report, due later in the day, for fresh clues on the economy and the Federal Reserve’s policy outlook. A marked weakening in the labor market could revive expectations for Fed rate cuts later this year, which have been largely priced out as surging oil prices, driven by the Middle East war, reignited inflation concerns. On Thursday, President Donald Trump vowed more aggressive strikes on Iran in the next two to three weeks, dashing hopes for a quick end to the conflict and renewing a bid for the safe-haven asset. Meanwhile, a report indicated that Iran is working on a protocol with Oman to monitor traffic through the Strait of Hormuz, providing some relief. The dollar is on track for a modest weekly decline.

Dollar Steady Ahead of Jobs Report

South Korea’s foreign exchange reserves fell to $423.7 billion at the end of March 2026, down from $427.6 billion in February. The decrease was driven by lower dollar-equivalent values of other currency assets and market stabilization measures, including foreign exchange swaps with the National Pension Fund. Securities holdings were $377.7 billion (vs. $379.96 billion in February), deposits declined to $21.1 billion (vs. $22.5 billion), SDRs stood at $15.6 billion (vs. $15.8 billion), gold holdings remained at $4.79 billion, and the IMF reserve position was $4.55 billion (vs. $4.61 billion). As of February, South Korea ranked 12th globally in foreign exchange reserves.

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