China's GDP expands at a rate of 5.0% in Q1 2026, beating expectations.
The figure suggests limited indirect effects of the Iran war so far, but shows few signs of recovery in consumer spending.
Markets and Stocks
In the United States, the major indices are pointing to a positive open after the S&P 500 and the Nasdaq once again touched all-time highs, with the MSCI All Country and the Nikkei also at records. WTI was advancing 1.3% toward US$92 per barrel and Brent was approaching US$96, with the Strait of Hormuz still effectively closed but with growing signs of diplomatic openness. Pakistani army chief Asim Munir arrived in Tehran to advance peace talks, and Iran indicated it could consider allowing traffic through the Omani side of the strait as part of a negotiating proposal. The 10-year Treasury yield fell one basis point toward 4.27% and the dollar broke an eight-session consecutive losing streak. On the corporate front, TSMC reported first-quarter net income 58% above the prior year and raised its 2026 revenue growth guidance, noting that AI chip demand remains robust. PepsiCo beat estimates and confirmed its annual guidance. Netflix reports today at the close.
Key points
The US and Iran are contemplating the possibility of extending the current ceasefire to allow more time to negotiate.
Eurozone inflation rose in March slightly more than initially estimated.
US initial jobless claims fall to 207,000, indicating a low number of layoffs.
US industrial production falls -0.5% in March, its first decline in five months.
The first-quarter earnings season continues this Thursday, with Netflix reporting at the close.
What you need to know about the economy and markets
China's GDP grew 5% in the first three months of the year, accelerating from 4.5% in the prior quarter and also surpassing the analyst consensus forecast of 4.8% growth. This increase represents the largest annual gain in the past three quarters as the Chinese government prepares for the potential impact of the war in Iran. Meanwhile, the underlying trend appears uneven in March: industrial production increased more than expected, but the rise in retail sales fell short of estimates, and fixed asset investment continued growing, though at a slower pace.
Our take
The solid start to the year, driven by strong export performance, suggests that the direct impact of the Middle East conflict remains contained for now. China is well positioned to handle short-term disruptions, but could face greater pressure if energy prices remain elevated for longer.
The United States and Iran are said to be contemplating extending the ceasefire by two weeks to allow more time to negotiate a peace agreement, which would reduce the risk of a resumption of fighting despite the intensifying standoff in the Strait of Hormuz. With the initial truce expiring next week, mediators are trying to organize technical talks to resolve the most contentious issues preventing a long-term agreement, particularly the reopening of Hormuz and the future of Iran's nuclear program.
Our take
Expectations that the complex negotiations between Iran and the United States will eventually lead to the unblocking of the Strait of Hormuz have driven global stock markets to recover pre-conflict all-time highs and have allowed most risk assets to recoup much of their recent losses.
According to the final reading, Eurozone inflation rebounded in March to 2.6% annually (up from 1.9% in February), one tenth above the initially estimated 2.5%, which had been in line with consensus expectations. Core CPI, which excludes food, alcohol, tobacco, and energy prices, rose 2.3% (from 2.4% in February), in line with preliminary readings and analyst forecasts.
Our take
Headline inflation is once again placing above the European Central Bank's 2% target. Ahead of its next decision at the end of April, the ECB held interest rates at 2% for the sixth consecutive meeting at its last gathering and acknowledged that the war in the Middle East has significantly increased uncertainty in the economic outlook, generating upside risks to inflation and downside risks to economic growth.
The US Department of Labor published its weekly jobless claims report. In the week ending April 11, seasonally adjusted initial claims were 207,000, a reduction of 11,000 from the prior week. Insured unemployment reached 1,818,000 persons as of April 4, its lowest four-week moving average since June 2024, suggesting stability in the US labor market.
Our take
The data point to a resilient labor market despite the global economic uncertainty environment. The decline in initial claims and the near two-year low in the four-week moving average of continuing claims indicate that layoffs have not accelerated.
Markets and Stocks
It has been six weeks of high volatility; nonetheless, the market has shown greater optimism around Middle East negotiations. The S&P 500 surpassed 7,000 points for the first time, the MSCI All Country is trading at a new high, and the Nikkei also set a record. The recovery took just six weeks, two weeks faster than the recovery following the Liberation Day tariffs, and considerably faster than the two years needed to recover from the inflationary shock of the Ukraine war. However, the market narrative contrasts with that of the delegates gathered in Washington for the IMF and World Bank meetings, where the consensus is that investors are underestimating the structural damage of the conflict.
TSMC reported first-quarter net income of around US$18 billion, a 58% jump that surpassed consensus estimates. The company also raised its full-year revenue growth guidance to more than 30% and indicated that its capital expenditure will tend toward US$52–56 billion. TSMC shares reached a new all-time high in Taipei and Taiwan's stock market capitalization surpassed US$4.1 trillion.
PepsiCo reported revenues and earnings that exceeded market forecasts. The Frito-Lay salty snacks division showed volume recovery after the company cut prices by up to 15% on key brands in response to pressure from retailers such as Walmart and deteriorating market share. PepsiCo reaffirmed its full-year guidance, though it warned of a volatile macroeconomic environment.
A federal jury found Live Nation guilty of illegally monopolizing the live entertainment industry and charging excessive prices for tickets to music events. The verdict opens the door to a possible breakup of the company, which controls the major venues, the world's largest promoter, and Ticketmaster. The company's shares fell sharply.
The to-do list
Watch Netflix's results at today's close, it will be interesting to see whether the conflict affected discretionary spending on entertainment.
Cook something different this weekend: find a recipe today that you want to try on Saturday and pick up the ingredients.
Resume exercise if the week left it pending, Thursday is a good day to avoid arriving at Friday with that debt still outstanding.
Find a new film or series for the weekend; with the more optimistic market mood, the spirit appreciates it too.
Read at least one chapter tonight, intense news days end better with something that isn't a screen.
Quote of the day
"Don't count the days, make the days count."
— Muhammad Ali
Monitor
Bolsas / Exchanges
Activo
Valor
Variación_pct
S&P 500
7,071
0.10%
Nasdaq
26,407
0.20%
Dow Jones
48,796
0.30%
IPyC
69,624
0.00%
Monedas / FX (Foreign Exchange)
Activo
Valor
Variación_pct
USD/MXN
17.2662
0.10%
EUR/MXN
20.3481
0.00%
EUR/USD
1.1782
-0.10%
Índice DXY
98.19
0.10%
Tasas / Exchange Rates
Activo
Valor
Variación_pct
Treasury 2 años
3.76
-0.9 bp
Treasury 10 años
4.28
-0.2 bp
TIIE 3 meses
6.78
2.0 bp
M Bono 10 años
9.01
0.0 bp
Commodities / Commodity Markets
Activo
Valor
Variación_pct
Petróleo (Brent)
96.27
1.40%
Oro
4,818
0.60%
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