Weekly house view | To the moon and back
The week in review
US President Donald Trump warned Iran that “it could be taken out in one night” ahead of his 20:00 ET deadline to agree to a ceasefire deal. Trump has pledged to attack Iran’s infrastructure, including power plants and bridges, if no deal is reached. Markets expect a benign outcome, as commodity prices, currencies and long-term oil contracts have lagged spot oil moves. The price of US crude remains above USD 100 and US gasoline prices topped USD 4 per gallon.
On Friday, Trump proposed a 42% increase in US defence spending to USD 1.5 trillion for the next fiscal year. Iran says it is drafting a protocol with Oman to manage passage through the Strait of Hormuz.
Artemis II astronauts return to earth this week after a record-breaking trip around the moon. Elon Musk’s rocket company, SpaceX, filed for an initial public offering.
Quote of the week
Italian Prime Minister Giorgia Meloni bristled at a question about whether Italy should distance itself from the US. “What do you mean we must distance ourselves, in the sense that we must leave NATO? We must close American bases? We must sever trade relations, we must storm McDonald’s?”
Key data
The US economy continues to show resilience, but the labour market remains in a fragile equilibrium. US payrolls beat expectations to add 178,000 jobs in March, and the US unemployment rate dropped to 4.25% from 4.44%. US employers added an average 68,000 jobs over the past three months. US retail sales were strong in February but early evidence from the Chicago Fed tracker points to a setback in March. The latest US business surveys had a stagflationary tone. ISM manufacturing rebounded but the ISM services report missed expectations amid signs of growing price pressures.
European inflation rose in March. Euro area consumer prices grew by 60 basis points (bp) to 2.5% and core prices fell by 10 bp to 2.3% year on year. Switzerland's headline consumer price index (CPI) rose by 20 bp to 0.3% and core inflation was stable at 0.4% year on year.
