The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- Trump disappoints – Oil spiked and markets sold off overnight, after President Trump addressed the nation and failed to convince investors there’s a clear path to resolving the conflict. Yemen’s Houthi rebels, who struck Israel for the first time in this conflict on the weekend, have threatened to close the Red Sea strait if there is a further escalation against Iran and Lebanon.
- BoE flags risks – The Bank of England (BoE) warns that the supply shock from the conflict in Iran could weigh on growth and push up inflation. The UK is seen as particularly exposed due to our reliance on imported energy and rising costs of government debt.
- US retail sales rebound – Retail sales rose by 0.6% in February, recovering after a slight decline in January, with stronger auto sales providing a boost. 10 out of 13 categories saw growth, including personal care, clothing & sporting goods, and hobby stores.
- US job market softens – US job vacancies fell by 358,000 to 6.88 million in February, led by declines in accommodation and food services. The hiring rate dropped to 3.1%, the lowest level for 15 years outside the pandemic, amid broad pullbacks in areas such as leisure & hospitality, construction and professional services.
- Focus turns to payrolls – With US and UK markets closed tomorrow for Easter, all eyes will be on the US Non-Farm Payrolls to see if it meets expectations of an increase of 60,000 jobs. The previous data release for February was a big disappointment, as the US economy lost 92,000 jobs when forecasts predicted a 59,000 gain. The unemployment rate is expected to remain steady at 4.4%.
What this means for financial advisers and clients
Whether anyone likes it or not, the US President has been front and centre of global affairs since returning to office, with his deluge of daily commentary often times having a big impact on the direction of markets.
What’s starting to become clear to investors is that he may be an unreliable narrator. Markets had been fairly upbeat this week on hopes of a resolution to the conflict, but that shifted overnight as those expectations faded. While the “TACO trade” has worked before, it’s unclear if de-escalation is possible this time - especially with the risks around the Strait of Hormuz.
In this kind of environment, diversification really matters. Spreading exposure across asset classes and regions can help manage volatility, and focusing on quality companies can provide a bit more resilience if things deteriorate.
With uncertainty around growth and inflation picking up again, returns may be less smooth and volatility more frequent. Staying invested at the right level of risk will be key.
Chart of the week - oil production hit by war
Source: Bloomberg
Why’s this worth sharing?
The chart above shows the severe cut to oil production by nations in the Gulf since the onset of the US and Israel war with Iran.
While most of these cuts are currently of a temporary nature, some will be more permanent due to damaged infrastructure from missile strikes. There will also be a lag in bringing production back up to prior levels following a resolution to the conflict, which at present doesn’t appear to be in sight.
The Markets
FTSE holds up
The index showed some resilience this week. Miners such as Rio Tinto got a boost from strikes against aluminium facilities in the Middle East, while energy stocks moved around with oil price swings. RELX and LSEG also continued to recover after being hit by the AI-disruption narrative earlier in the quarter.
S&P flat
UK investors benefited from a strengthening dollar, but otherwise the US index showed mixed returns. Nike dropped over 15% and luxury furniture and lifestyle retailer RH fell by almost 20%, after both firms posted disappointing sales outlooks. Intel stock jumped by 6% following the announcement of plans to buy back its stake in its Irish fabrication facility.
Emerging markets suffer
Asian stocks continue to bear the brunt from the conflict in the Middle East, with perhaps South Korea’s KOSPI index the most sensitive and chopping wildly over the week. In contrast Latin American markets, like Brazil and Chile, have benefitted from higher commodity prices.
Gold recovery
Gold climbed over the week, as the US dollar weakened and sentiment improved slightly, although it’s pulled back a bit more recently.
Oil spikes
Oil surged again as Trump’s speech dampened hopes for a swift resolution and instead pointed to prolonged disruptions to energy flows. WTI crude is now trading over $108 a barrel and Brent crude back up over $112, having fallen from $118 earlier in the week.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 3.99% | 5.34% |
| FTSE 250 | 3.45% | -2.88% |
| S&P 500 | 2.91% | -2.90% |
| NASDAQ | 3.51% | -3.86% |
| FTSE Developed Europe Ex-UK | 4.67% | 0.11% |
| FTSE Emerging Markets | 0.97% | 0.87% |
| FTSE Japan | 2.14% | 8.10% |
| Brent Crude | -6.34% | 66.76% |
| Gold Spot | 5.51% | 11.18% |
| UK 10yr Gilt yield | -15bps | +35bps |
| US 10yr Treasury yield | -12bps | +17bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Wednesday 1st April 2026.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
