German inflation reaches its highest level in more than a year in March due to the war in Iran Me
Independent regional reports showed that diesel and gasoline were the main drivers.
Markets and Stocks
US futures were advancing around 0.8% in the morning, with market sentiment still dominated by the Middle East conflict and no clear signs of de-escalation. Brent was trading around US$115 per barrel, on track for its largest monthly advance in history, surpassing even the jump recorded during the 1990 Gulf War. WTI crossed US$100 for the first time since the start of the conflict. Meanwhile, the US 10-year Treasury yield fell toward 4.37% and the 2-year toward 3.86%, in the clearest signal yet that the market is rotating its primary concern from inflation toward economic slowdown. Pakistan announced it is preparing talks between Washington and Tehran for the coming days. Jerome Powell speaks at Harvard this afternoon.
Monitor
Bolsas / Exchanges
Activo
Valor
Variación_pct
S&P 500
6,461
0.80%
Nasdaq
23,497
0.70%
Dow Jones
45,759
0.70%
IPyC
66,729
0.00%
Monedas / FX (Foreign Exchange)
Activo
Valor
Variación_pct
USD/MXN
18.0660
-0.20%
EUR/MXN
20.7439
-0.40%
EUR/USD
1.1485
-0.20%
Índice DXY
100.32
0.20%
Tasas / Exchange Rates
Activo
Valor
variacion_pct
Treasury 2 años
3.85
-6.8 bp
Treasury 10 años
4.36
-8.0 bp
TIIE 3 meses
7.01
2.0 bp
M Bono 10 años
9.16
0.0 bp
Commodities / Commodity Markets
Activo
Valor
Variación_pct
Petróleo (Brent)
114.55
1.80%
Oro
4,573.00
1.80%
Key points
Oil prices rise to $116 on fears of escalation of the conflict in the Middle East.
Eurozone economic sentiment deteriorates in March as a result of rising inflation expectations.
Fed Chair Jerome Powell will make a public appearance today at Harvard University.
What you need to know about the economy and markets
German inflation accelerated considerably in March after the war in Iran drove up energy costs, fueling further speculation that the European Central Bank could raise interest rates. Consumer prices rose 2.8% year-on-year, a faster pace than the 2.0% advance recorded in February. This is the highest level in more than a year and is in line with market expectations. Independent regional reports showed that heating oil and fuels were the main drivers.
Our take
With fighting in the Middle East now in its fifth week, the effect of rising oil and gas prices is being reflected in European prices and in consumers' perceptions of how inflation will evolve. Although ECB President Christine Lagarde has pledged to act decisively and quickly if necessary, policymakers say they will not rush as they assess all the consequences.
The US has increased its military presence in the Gulf region and Iran-backed Houthi forces have joined attacks against Israel, threatening disruptions to maritime transit in the Red Sea, which would compound those already recorded in the Strait of Hormuz. Brent prices rose 2.5% today to $116 per barrel, on track for a record monthly increase. The escalation in March is around 60%, stoking fears of an inflation rebound and the risk of a global recession. Peace talks remain uncertain. Pakistan said it was preparing to host "meaningful talks" to end the conflict in Iran in the coming days.
Our take
Iran's control over the Strait of Hormuz, its capacity to disrupt global energy and food markets, and its sustained missile and drone capabilities give it few incentives to yield, putting pressure on the United States to intensify the conflict.
The Eurozone economic sentiment index fell in March to 96.6 points from 98.2 points in February, coming in slightly below the 96.7 points expected by consensus analysts. This is the lowest level this indicator has reached since last September. The decline was directly linked to rising inflation expectations tied to the Middle East conflict. Meanwhile, consumer confidence in the region fell in March to -16.3 points from -12.3 points in February, in line with its mid-month preliminary reading and with forecasts.
Our take
Following February's decline, Eurozone economic sentiment suffers a "marked deterioration" in March. The war has clearly destabilized the European region's economy. The armed conflict has considerably unsettled consumers regarding inflation, but has not yet significantly affected business output. Thus, concern about long-term effects is beginning to clearly weigh on Europe's mood.
Federal Reserve Chair Jerome Powell will participate today at 8:30am in a colloquium moderated by students from Harvard University's introductory course "Principles of Economics," an academic activity taking place at a delicate moment for the central bank. Powell will answer questions from both the moderator and students in the audience. No prepared remarks are planned, making it one of the few recent appearances in which he will speak publicly without a script.
Our take
This appearance by Powell comes after a turbulent period for the official and the central bank. It also takes place amid a moment of high global uncertainty regarding the impacts of the armed conflict in Iran and its implications for monetary policy. Markets will be paying close attention to his words in an attempt to glean clues about the future steps of the US monetary authority.
Markets and Stocks
Iranian attacks over the weekend struck aluminum production facilities in the Middle East, pushing the metal's price up 3.2% on the London Metal Exchange. The Middle East region accounts for around 9% of global aluminum production capacity, and disruptions to energy supply and export routes are affecting smelter output across several countries in the region.
Corporate News
BYD told analysts that its 2026 exports will exceed its previous target by approximately 15%, driven by accelerating demand for electric vehicles in Asia amid rising gasoline prices. BYD shares listed in Hong Kong have gained 12% in March. In the Philippines and Indonesia, lines at EV dealerships are being reported as fuel prices climb.
Sysco, one of the largest food distributors in the US, agreed to acquire Jetro Restaurant Depot, a private distributor specializing in the restaurant and hospitality segment, for US$29.1 billion. The deal consolidates Sysco's position in the food distribution market at a time when logistics and fuel costs are under maximum pressure from the Iran conflict.
Eli Lilly reached an agreement with Insilico Medicine, a Hong Kong-based biotechnology company specializing in AI-driven drug discovery, valued at up to US$2.75 billion plus royalties on future sales. Under the agreement, Lilly will define Insilico's research agenda and will hold rights to the drugs developed.
The to-do list
Follow Jerome Powell's remarks at Harvard this afternoon, his tone on the balance between inflation and slowdown will be the most relevant monetary policy signal of the week.
Review China's March PMIs tomorrow as an early indicator of the energy shock's impact on the world's largest oil-importing economy.
Start the week by defining your 3 key priorities before Holy Week. With few working days available, focus on what truly moves the needle.
Go for a walk or exercise today, it's the best way to start a week that promises to be just as intense as the last one.
Quote of the day
"We cannot solve our problems with the same thinking we used when we created them."
— Albert Einsteined.
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