Evidence of Rising Inflation but Investors Clinging to Hope that Iran and U.S. Will Strike A Deal
April 14, 2026
President Trump claims that Iranian negotiators want to resume negotiations to end the Middle East war. While not the most reliable source, investors have chosen to give his upbeat pronouncement the benefit of the doubt this Tuesday. The price of oil is lower, and an appetite for riskier assets has improved.
- The $97.43 price of West Texas Intermediate oil is 1.7% lower than at yesterday’s close but still closer to its 52-week high of $119.5 than the 52-week low of $55.0 per barrel.
- Ten-year sovereign debt yields fell overnight by eight basis points in Australia, five bps in Italy, four bps in Japan, France and Spain, three bps in Great Britain, two bps in Germany and a single basis point in Switzerland, but the 10-year U.S. Treasury yield is only holding steady.
- Hot money flows into the dollar in search of a safe haven have abated. The U.S. currency depreciated 0.3% overnight on a weighted basis and against the loonie and euro and declined even more sharply by 0.5% versus the kiwi, peso, won and sterling and by 0.4% relative to the yen, Swiss franc and Australian dollar.
- Silver (+2.5% in price) and gold (+0.7%) are somewhat back in demand.
- The surprising gains in U.S. share prices in Monday’s session was followed by a hopeful mood in Asia and Europe today. Stock markets closed up 2.7% in South Korea, 2.4% in Taiwan and Japan and 1.0% in China, but in India, which has fared badly from the Middle East war, saw its equity exchange lose another 0.9%. Major Euroland stock exchanges are up by 0.6-1.0% so far, while the British FTSE is only flat. U.S. stock futures are mixed, with the Nasdaq and Russell 2000 outshining the DOW and S&P.
Prior to the scheduled release of U.S. producer price figures, many other economies have already reported inflation. German wholesale prices, for instance, leaped 2.7% in March, the most in four years, and that lifted their 12-month rate of increase all the way to 4.1%, most in 37 months, from 1.2% in the three previous months.
Spanish consumer price inflation in March has been revised upward to 3.4%, a 21-month high versus 2.3% in January and February. The 1.2% month-on-month increase of Spain’s CPI was its steepest jump in 45 months.
Serbian consumer price inflation accelerated less sharply to a 3-month high of 2.8% in March from 2.5% in the prior month and a 38-month low of 2.4% in January.
Although only 1.3%, Finnish CPI inflation last month of 1.3% represented a 21-month high and a 1.5 percentage point advance from -0.2% recorded in January.
Czech CPI inflation of 1.9% in March was up from February’s 112-month trough of 1.4%.
Bulgarian consumer price inflation accelerated 0.8 percentage points to a 3-month high in March of 4.1%, well above the cyclical low of 1.2% touched back in September 2024, a month that also saw post-2021 lows experienced in a number of other economies around the world.
Romanian CPI inflation jumped to a 6-month high and lofty 9.9% last month from February’s 7-month low of 9.3%.
Sweden confirmed its preliminary 0.6% overallbinflation rate in March. That’s a 3-month high and compares to a 54-month low of 0.2% in May 2025. Core CPI inflation in Sweden printed at 1.6% last month.
Just In: U.S. producer price data from March, the first month of the Middle Eastern war, surprised analysts significantly on the downside. While a 37-month high of 4.0% overall, the 12-month rate of increase was up from 3.4% in February and 2.9% in January, the PPI inflation pace was slightly over a half percentage point lower than the market consensus. The monthly producer price increase of 0.5% was no greater than in February, and core CPI inflation of 3.8% was unchanged from February’s reading. Service sector producer prices were unchanged from February’s level, and dollar strength was a factor restraining the inflation of producer prices, excluding trade as well as food and energy to 3.6% versus 3.5% in the first two months of the year. The main inflationary factor not surprisingly came from an 8.5% monthly leap in energy costs.
Monetary policy in Singapore, which subordinates interest rates to whatever it takes to achieve a target for the economy’s currency, has been tightened for the first time since April 2022. Policy is reviewed on a quarterly basis and was last changed in January and April of 2025 when slight easings were implemented. Three parameters define the weighted Singapore dollar’s target: the mid-point of an allowable trading band, the width of that band, and the band’s intended slope. A statement released by the Monetary Authority of Singapore after this latest review paints a picture of big uncertainties to both growth and inflation related to the blockade of the the Strait of Hormuz.
GDP growth in the Singapore economy will slow over the course of this year, while the output gap should average around zero percent. Singapore’s imported energy costs have already risen. Prices of a wider range of imported goods and services are expected to increase in the quarters ahead. Consequently, MAS Core Inflation will pick up and remain elevated over the next few quarters.
Among other data reported today, China’s $51.1 billion trade surplus in March was at its smallest level in 13 months, but the first-quarter surplus of $264.7 billion was similar to the year-earlier $271.1 billion level.
Japanese industrial production in February was revised marginally to a monthly dive of 2.0% from -2.1% estimated initially. Compared to a year earlier, production in the first two months of 2026 was just 0.5% higher following a 0.3% year-on-year drop in all of 2025. Capacity usage dipped 0.1% in February and was 1.7% above its year-earlier level.
GDP in Singapore dipped 0.3% in the first quarter of 2026. The 4.6% year-on-year growth rate was down from 5.0% in all of 2025.
Business confidence in Australia suffered its biggest month-to-month drop in 71 months during March. The reading for business conditions, however, only slid one point and remained positive. A separate measure of consumer confidence in Australia also deteriorated sharply and to its weakest reading in 13 quarters.
A 3.1% rise in same-store sales in Great Britain during March was the most in 11 months.
Ireland’s construction purchasing managers index improved last month to a one-year high of 53.2.
Small business sentiment in the United States fell in March to an 11-month low of 95.8. Such had crested at 105.1 in December 2024 in the month following President Trump’s election to his current four-year term.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Chinese trade surplus, Monetary Authority of Singapore, U.S. producer prices
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