Last week: High intraday volatility for Bond yields, Gold, BTC and Oil, while US equities trend lower (5th consecutive week)
WEEKLY TRENDS
With a 4 day week last week, ending last Thursday, stocks indices had not yet reacted to the strong US March NFP figures delivered last Friday. US indices Futures though ended the week in the red while Gold and Oil prices continued to surge.
The US March job report showed stronger than expected figures at +178k vs +65k forecast and revised down the February figures from -92k to -133k , pushing US stock indices Futures down (roughly -0.3%) and the US Bond yields up (+5bps approximately).
The only major US stock earnings release last week, was with Nike which delivered poor results (mainly due to China’s market).
Investors will continue to watch any macro elements for signs of a Stagflation, the US Treasury will continue to watch and buy UST10 should yield approaches 4.5% (protecting the 5% line in the sand mark) and of course will scrutinise any signs of a peace treaty in Iran leading to the reopening of the Hormuz Strait.
Note that most of European markets will be closed on Easter Monday but the US will be open (inflation figures will be published towards the end of the week).
MARKETS
Equities
Q4 earnings weekly performances:
Nike (-14%) on declining sales and profitability, particularly in China
NB weekly : Thales (+12%) Stellantis (+12%) Rheinmetall (+14%) Norsk Hydro (+10%)
M&A : Unilever (-7%) on merger talks with McCormick (-5%)
Rates
US curve steepening (2-10 years) stable at +50bps (-2bps)
HY corp. spreads lower : US at +315bps (-5) ; EU at +325bps (+15bps)
Commodities
Oil price WTI much higher (+12%) note that Russia has banned all gasoline exports starting April 1st, effective for 4 months (until July 31st)
Gold price higher (+4%) TTF Gas (-7%) Aluminium (+4%)
Crypto
BTC (+1%) ETH (+1%) SOL (-3.) XRP (-1%)
Under the watch
US Q1 earnings season - consensus expects SP500 growth of 12% YoY
20-25% of largest Private Credit funds investments are within the Software industry (Blackstone Private Credit has the highest at 33%)
Nota Bene
Turkey’s Gold reserves fell by 50 tonnes, in order to defend the Lira.
Dubai property bonds hit distressed levels (15% of USD Real Estate Bonds in the region trade distressed with $8bn maturing by 2030)
CALENDAR
Earnings releases: US *GS (Monday 13 April) JPM, Wells Fargo, Citi (14) BofA, MS (15), EUShell (Wednesday 8 April)
Macro releases: USFOMC minutes (8 April) Feb Inflation PCE (9) March CPI (Friday 10)
WHAT ANALYSTS SAY
Carmignac: When energy becomes a tax on growth
Allianz Global Investors: Expect market conditions to remain challenging in the Q2, but remain optimistic about the outlook for the global economy
Mohamed El-Erian: the US economy continues to outperform, it may not remain immune to the adverse effects of the war
Carmignac, 1st April 2026
Author : Kevin Thozet, CIO office
The surge in oil and gas prices has triggered a well-known market reaction to the sudden supply shock caused by the virtual closure of the Strait of Hormuz: rising interest rates, falling share prices. The scale of the shock is now relatively well priced in. History shows that a 60% or greater rise in oil prices is accompanied by a correction in the equity markets. As for interest rates, the mechanism is as follows: rising energy prices fuel inflation expectations, reinforce expectations of monetary tightening and push short-term rates higher. And the most exposed energy-importing economies are performing even worse in both equities and bonds.
But beyond the scale of the shock, the question now is one of its duration. Markets and economies can absorb a one-off shock; they struggle more when faced with a shock that sets in. In other words, a spike is manageable, but persistence is hard to stomach.
If the conflict were to be short-lived, the oil shock would likely remain manageable for economies and businesses. On the other hand, if it were to drag on – as in the case of Yom Kippur (1973), the Iranian Revolution (1979) or the First Gulf War (1990) – the outlook becomes significantly more unfavourable. Markets tend to move in phases. During oil and gas supply shocks over the past 70 years, a certain recurring pattern seems to emerge. A three-stage sequence is generally observed: In practice, the rise in oil prices is initially interpreted as a sign of impending high inflation, or even nominal growth. But over time, it turns into a veritable tax on growth, squeezing margins, eroding purchasing power and tightening financial conditions.
· Weeks 1 to 4: the markets digest the shock; the reaction in equities remains mixed · Weeks 5 to 8: the first cracks appear; the risk of a correction rises significantly · Weeks 9 to 13: danger zone; periods of stress become more frequent and prolonged
Rates follow a similar trajectory, but with a time lag. Short-term rates rise first, reflecting higher inflation expectations and expectations of a more restrictive stance from central banks. Then, as the shock persists, the narrative shifts. From weeks 9 to 13, growth concerns take over and short-term rates begin to ease, even though oil remains at high levels. A dynamic initially dominated by inflation gradually shifts towards a growth issue.
We are still in the first phase. As the conflict enters its fifth week and oil prices remain close to their highs. Markets are still dominated by inflationary dynamics: rates remain on an upward trend but are approaching their peak (we are beginning to see the yield curve steepen), whilst equities are becoming increasingly vulnerable (US equities are catching up – or rather falling in line with – the rest of the world).
Economic growth is now less energy-intensive than in the past: economies are generating more wealth per unit of energy consumed, thanks to productivity gains and the rise of the services sector. This reduces GDP’s sensitivity to energy shocks, though it does not make it immune: a sustained rise in energy prices continues to weigh on the economy, squeezing margins and purchasing power.
A swift resolution to the conflict cannot be ruled out at this stage, but its likelihood remains difficult to assess. We are not yet in a phase of growth destruction, but with every passing day we move a little closer to it. And in oil supply shocks, it is time that acts as the real catalyst. History does not always repeat itself, but behaviour certainly does.
Allianz Global Investors, 1st April 2026
Author : Christian Schulz, Chief Economist ; Michael Heldmann, CIO Equity ; Jenny Zeng, CIO Fixed Income
Regional Outlook: Stagflationary trends influence central bank policy
Following a surprisingly strong start to the year, we expect growth in the US to slow by mid-2026. Rising energy costs are likely to keep inflation around 3%, once again above the Fed’s 2% target. This should prompt the central bank to cut its key interest rates later than expected, bringing them down to around 3.5% by the end of 2026.
For Europe, we forecast moderate growth of 1–1.5% in 2026, with positive momentum coming from Germany. At the same time, rising energy prices are expected to push inflation in the eurozone above the European Central Bank’s (ECB) 2% target. Against this backdrop, we believe it is likely that the ECB will not cut rates this year and that the threshold for hikes is low.
Finally, in Asia, the economic outlook remains mixed. Whilst fiscal stimulus measures are running out of steam in China, Japan is benefiting from additional public spending. This should prompt the Bank of Japan to raise its interest rates by a further 50 basis points this year.
Equities: strategic autonomy, energy and AI as key drivers
With regard to equity investments, we highlight certain thematic trends: Europe’s drive to strengthen its strategic autonomy – particularly in defence, but also in energy supply, digitalisation and healthcare – is gaining considerable momentum and becoming a globally significant investment theme. At the same time, the recent escalation in the Middle East highlights the persistent vulnerability of energy supply chains. The sectors concerned are likely to benefit. We see strong structural drivers in the technology sector. AI is and remains a key theme across global equity markets. China is accelerating the adoption of AI, and global demand for semiconductors as well as energy infrastructure such as networks and data centres is rising significantly. In terms of valuations, Japan and the UK remain the most attractive markets.
Bonds: quality, a selective approach and active duration management
We warn of widening disparities in the bond markets. In an increasingly volatile environment, the markets reward selectivity. Inflation fuelled by oil prices and rising risk aversion are sending mixed signals for bonds. In this context, market participants should prioritise quality yields, balance sheet strength and active duration management. Japan and UK government bonds, followed by US Treasuries, appear relatively attractive to us in this context.
As for corporate bonds, this segment has proved particularly stable despite increased volatility in the equity markets. Within the bond markets, Euro Investment Grade bonds continue to stand out as offering the best value, although US Investment Grade bonds have narrowed the gap compared with the previous three months. Furthermore, emerging market bonds can offer resilient yields and diversification benefits. Asian bonds are particularly notable for their low volatility.
Mohamed El-Erian, 1st April 2026
Author : Mohamed A. El-Erian, ex PIMCO CEO
For years, the US economy has been the envy of both developed and developing nations. Increased productivity, abundant venture capital, a dynamic entrepreneurial spirit and, until recently, an expanding workforce have been the main drivers of this growth, which has been boosted over the last 2 years by massive investment in AI. Furthermore, successive governments have implemented significant fiscal stimulus measures, even though, given the low unemployment rate, one might have expected them to manage near-balanced budgets and limit the rise in public debt. Headwinds may, however, be on the horizon.
Today, households and businesses are facing the repercussions of the war in Iran, notably rising energy and borrowing costs, which threaten to exacerbate existing financial vulnerabilities and create new ones. Admittedly, the US is better placed to cope with these repercussions than most other economies, particularly those in Asia and Europe. Thanks to its energy independence, it is spared the spectre of supply shortages that now hangs over Asia and parts of Europe. The US economy is also less exposed to the growing fragmentation of global trade, investment and payment systems. Furthermore, the US has already planned additional fiscal stimulus measures, thanks to Donald Trump’s ‘One Big Beautiful Bill Act’. And, although the US Federal Reserve may slow down its policy of cutting interest rates, it may be less inclined than the
Even if the US economy continues to outperform its counterparts, it will nevertheless not necessarily remain immune to the adverse effects of the war. Already, rising energy and borrowing costs are exacerbating the pressures on purchasing power faced by many Americans, creating downside risks to employment and consumption, and increasing the likelihood of a slowdown in growth. The US entered the war with Iran whilst inflation remained stubbornly high – this is the sixth consecutive year the Fed has missed its 2% target. Today, rising energy prices are on the verge of triggering more widespread price increases. What began as a surge in prices at the pump – petrol prices rose by 30% and diesel by 40% in the first three weeks of the war – will soon translate into higher costs for a wide range of products, from semiconductors and fertilisers to airline tickets.
Beyond inflation, the risk of financial instability is rising. We are already seeing tremors in the private credit market: funds restricting redemptions, partial losses of bank funding and growing concerns about poor underwriting and valuation practices at certain funds. Debt levels in certain parts of the global bond market are a cause for concern, particularly against the backdrop of the ongoing sell-off, as are the excessive capital flows, fuelled by hype, into AI and related activities over the past year.
None of these risks appears in itself to pose a systemic threat. In a stagflationary environment characterised by high inflation and weak growth, they could combine, fuelling a dynamic that significantly tightens financial conditions and lays bare the vulnerabilities of the US and global economies.
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