Global markets mixed this week as Middle East conflict fuels inflation fears
This week @ 1530 Friday 27th March in London.
Markets:
- FTSE 100 rose 0.2% this week to 9,942, as AstraZeneca’s rally on positive trial results offset broader weakness from declining retail sales and collapsing consumer confidence.
- S&P 500 fell 0.5% this week to 6,477, as contradictory ceasefire signals whipsawed sentiment, and surging Treasury yields crushed rate-cut expectations entirely.
- Nasdaq Composite fell 2.3% this week to 21,153, officially entering correction territory as heavy selling in technology and growth names accelerated amid rising bond yields and evaporating monetary easing hopes.
- Euro Stoxx 50 was up 0.5% at 4,802.17 as despite European bond yields surging to multi-year highs and the OECD cutting eurozone growth forecasts while raising inflation projections.
Bonds
- UK 10-year gilt yield rose to 5.07%, it’s highest since the 2008 financial crisis, as markets priced in three Bank of England rate hikes this year amid surging energy-driven inflation expectations.
- US 10-year Treasury yield rose to 4.46%, it’s highest since July 2025, as a trio of poorly received coupon auctions and the repricing of Fed policy from cuts to a potential hike drove persistent selling.
Commodities:
- Brent crude fell 1.32% this week to $110.71, retreating from intraweek highs after Trump extended a pause on strikes against Iranian energy infrastructure.
- Gold fell roughly 2.29% this week to around $4,4270z, as dollar strength, surging real yields, and the complete repricing of Fed rate expectations overwhelmed the metal’s traditional safe-haven appeal.
- Copper gained 2.20% to 5.49, as the extended Iran deadline lifted growth sentiment, though the broader stagflation backdrop continued to constrain industrial demand.
FX:
- GBP:USD fell to $1.331 this week, as the OECD’s sharp downward revision of UK growth to 0.7% and safe-haven dollar demand driven by the escalating Iran conflict weighed heavily on sterling.
- GBP:EUR was broadly flat this week at around 1.155, as both currencies faced similar energy-shock headwinds.
Macro:
- UK CPI (February) held steady at 3.0% year on year, matching expectations, while core CPI edged up to 3.2% from 3.1%, slightly above the 3.1% forecast.
- UK retail sales (February) fell 0.4% mom, reversing January’s strong 2.0% gain but less severe than the 0.7% drop expected, while year-over-year growth moderated sharply to 2.5% from 4.8%.
- US manufacturing PMI came in at a solid 52.4, signalling continued expansion, while services PMI moderated to 51.1.
- US Core PCE was expected at 0.4% mom and 3.1% year on year on Friday, a reading that could confirm whether the oil shock is bleeding into core consumer prices.
Companies:
- AstraZeneca rallied nearly 3% this week after reporting positive late-stage drug trial results, providing a notable lift to the FTSE 100 amid otherwise subdued UK equity sentiment.
What we will be keeping an eye on next week…
w/c 30th March 2026
- US March employment report (Friday 3rd April) is expected to show a modest gain of 48,000 jobs, though markets will be closed for Good Friday with the reaction deferred to the following Monday.
- Eurozone preliminary March CPI will be closely watched after Spain’s flash reading showed headline inflation jumping to 3.3% year on year, with markets assigning roughly 65–71% probability of an ECB rate hike on 30th April.
- US CB Consumer Confidence, ADP payrolls, and ISM Manufacturing PMI releases through the week will be scrutinised for signs of stagflation pressure feeding through to the real economy.
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
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