Equities and Dollar Unmoved by Fast-Approaching War Deadline

Key Takeaways

• Global equities rise modestly while dollar edges higher
• Fed nominee Warsh faces conflict‑of‑interest scrutiny
• European investor sentiment slides amid Middle East supply shock
• US retail sales beat forecasts, driven by gas station surge
• Inflation eases in Slovenia, Canada, Poland, New Zealand

Pulse Analysis

The latest market snapshot shows a surprising resilience in equity indices across Asia and Europe, even as the two‑week cease‑fire deadline in the Middle East looms. South Korea, Taiwan, India, Japan and Singapore posted gains ranging from 0.9% to 2.7%, while the U.S. dollar inched up modestly. This steadiness reflects investors’ focus on short‑term data scarcity and the expectation that the cease‑fire, set to expire at midnight Wednesday, will not immediately trigger a broader risk‑off sell‑off. However, the ongoing U.S. blockade of Iranian ports, championed by President Trump, continues to constrain shipping through the Strait of Hormuz, feeding supply‑chain anxieties that have already dented confidence in Germany and the wider euro area.

Policy watchers are turning their attention to the confirmation hearings of Federal Reserve Chair nominee Warsh. Senators are probing his $100 million net worth for potential conflicts with the Fed’s regulatory remit and questioning whether his monetary philosophy will align with President Trump’s push for lower rates. The outcome could shape the Fed’s trajectory on inflation control and interest‑rate policy at a time when global price pressures appear to be moderating. Warsh’s stance will be especially consequential given the Fed’s dual mandate and the delicate balance between supporting growth and maintaining price stability.

Meanwhile, inflation data from several economies suggest a cooling trend. Slovenia’s producer‑price inflation fell to a six‑month low of 0.9%, Canada’s CPI rose 0.9% month‑on‑month, and Poland’s producer‑price deflation narrowed to –0.8%. New Zealand’s consumer‑price growth held steady at 3.1% YoY, while British wage growth slowed. In the United States, retail sales outperformed expectations, climbing 1.7% in the latest month, driven largely by a 15.5% surge at gas stations, and overall Q1 sales rose 3.7% YoY. These mixed signals underscore a nuanced inflation outlook, where localized price easing coexists with robust consumer demand, setting the stage for careful monetary calibration in the months ahead.