📑 Executive Intelligence Brief
**Global Markets React to Iran War**
The possibility of the United States ending its military campaign against Iran without reopening the Strait of Hormuz has sent shockwaves through global markets. According to a report in The Wall Street Journal, President Trump is willing to consider ending the war even if Iran remains in control of the strategic waterway. This development has sparked a rally in stocks, with European futures pointing higher and US futures also gaining.
The news has also caused oil prices to swing, with Brent crude dropping 3.1% to $127.67 a barrel. However, it's worth noting that US oil prices ended the previous session above $100 a barrel for the first time since the war started. The volatility in oil prices is a reflection of the uncertainty surrounding the conflict and its impact on global energy supplies.
The US two-year yield has also been affected, reflecting the market's concerns about inflation and growth. The yield has dropped, and the dollar has erased its gains, despite wrapping up its best month since 2022. The central banking story is also playing out, with Federal Reserve Chair Jerome Powell saying that longer-term inflation expectations appear to be in check.
The market reaction is a reflection of the complex and ever-changing landscape of the conflict. The possibility of the US ending its military campaign without achieving its goals has raised questions about the implications for the global economy. The European session is expected to be positive, with stocks pointing higher and oil prices swinging.
In other news, the UK motor finance industry is expected to pay around £2 billion less in compensation to consumers who were mis-sold car loans. The Financial Conduct Authority has announced that lenders should expect to pay a total of £7.5 billion, with fewer loans now being eligible. This development is expected to come as a relief to some of the affected firms, including banks such as Lloyds Banking Group.
The conflict in the Middle East continues to have a significant impact on global trade, with UK exports to the US slumping in the second half of 2025. The value of British food and drink products shipped to the US fell 8.6% from a year earlier, according to the UK's Food and Drink Federation. This decline is attributed to the tariffs imposed on UK products, including whiskey and infant formula.
China's factory activity has expanded for the first time this year, despite higher energy prices and disruptions caused by the conflict. The official manufacturing PMI reached 50.4 in March, up from 49 last month. This development is seen as a positive sign for the global economy, although the outlook remains clouded by the protracted war concerns.
The day ahead is expected to be busy, with the South Africa Investment Conference taking place in Johannesburg. The French president, Emmanuel Macron, is also scheduled to visit Japan, and euro area inflation data is expected to be released. The US JOLTS job openings data is also due out, and Nike is set to report its earnings.
In conclusion, the possibility of the US ending its military campaign against Iran without reopening the Strait of Hormuz has sent shockwaves through global markets. The rally in stocks and the swing in oil prices reflect the uncertainty and complexity of the conflict. As the situation continues to evolve, investors will be closely watching the developments and their impact on the global economy. With the European session expected to be positive, all eyes will be on the markets as they react to the latest news from the Middle East. The conflict has far-reaching implications, and its outcome will have a significant impact on global trade, energy supplies, and the economy.