China’s manufacturing PMI stood at 50.4 points in March 2026, exceeding February’s 49.0 and expectations of 50.1, returning to expansion territory. Meanwhile, the non-manufacturing PMI rose to 50.1 points from 49.5 the previous month, also above expectations (49.9), marking a return to growth for the first time since December.

Our take

The return of PMI indicators to expansion territory suggests a broader improvement in China’s economy in March, following a weak start to the year. The rebound in both manufacturing and services points to a recovery in demand after Lunar New Year holidays, supported by stimulus measures and stronger consumption dynamics. However, it will be important to assess whether this momentum can be sustained in the coming months, especially amid an uncertain external environment and reliance on supportive policy factors.

According to The Wall Street Journal, President Trump reportedly told his advisors he is willing to end the U.S. military campaign against Iran, even if the Strait of Hormuz remains largely closed, leaving diplomacy, particularly from Persian Gulf countries and European allies, to persuade Iran to reopen the strait.

Our take

As is often the case, all these reports and leaks should be treated with caution, as the narrative can shift rapidly. In the short term, the end of the war would be positive news. A U.S. withdrawal from the conflict with Iran would help ease tensions and improve prospects for reopening the Strait of Hormuz, a key artery whose disruption has driven oil prices higher.

Gasoline in the U.S. surpassed $4 per gallon for the first time since August 2022. It is one of the most visible reminders that even the world’s largest economy is feeling the impact of an increasingly deep conflict in the Middle East. Prices have risen more than US$1 since the start of the war.

Our take

Rising fuel prices represent a significant political risk for Trump in an election year. They also complicate the Federal Reserve’s task of containing inflation without harming employment.

Federal Reserve Chair Jerome Powell said Monday that inflation expectations in the U.S. remain “well anchored” despite the war, although he acknowledged that policymakers will soon have to address what to do about developments in Iran. He also noted that interest rates are “in a good place” to face risks stemming from the conflict in the Middle East, ruling out rate hikes for now.

Our take

Powell reiterates that tightening monetary policy could weigh too heavily on the health of the U.S. economy. He believes the optimal approach is to wait and see, as the economic effects of the conflict remain uncertain.

At 8am in the U.S., the Conference Board report for March will be released, including consumer confidence, current conditions, and expectations. The market expects a reading of 87.9 points, the lowest since April 2025.

Our Take 

March consumer confidence may be affected by the Middle East conflict, with a broad deterioration expected, particularly in the expectations component.

Markets and Stocks

Brent was trading around US$108 per barrel, closing March with a historic gain of approximately 50%. WTI surpassed US$100 for the first time in the current cycle. Three-month Brent futures remain above US$100, signaling that the market does not expect a near-term normalization. Aluminum rose due to damage to smelters in the Gulf. Gold recovered 1.1% toward US$4,558 but remains on track for its largest monthly drop in 17 years. Meanwhile, European natural gas maintains a cumulative increase of more than 100% since late February.

Corporate News

Unilever and McCormick completed the agreement to combine Unilever’s food business in a transaction valued at US$44.8 billion. Under the terms, McCormick will pay US$15.7 billion in cash and the equivalent of US$29.1 billion in its own shares, leaving Unilever and its shareholders with 65% of the combined entity, including brands such as French’s mustard. The resulting company will have revenues of approximately US$20 billion. Unilever plans to gradually reduce its stake, transforming into a company focused exclusively on health, wellness, home care, and personal care.

Nvidia announced a US$2 billion investment in Marvell Technology as part of a collaboration agreement that would enable faster and more energy-efficient data transmission in data centers. The partnership will integrate Nvidia’s AI platform with Marvell’s networking capabilities. Marvell shares were up 9% in pre-market trading.

CoreWeave secured an US$8.5 billion loan backed by Nvidia chips and a client contract with Meta worth at least US$19 billion. The loan received an A3 investment-grade rating from Moody’s, allowing participation from insurers and more conservative asset managers.

The to-do list

Quote of the day

“In markets, as in life, patience is the only advantage that cannot be bought.”

— Howard Marks.