Equities and Dollar Unmoved by Fast-Approaching War Deadline
April 21, 2026
The dollar rose 0.1-0.2% overnight. Equities in Asia closed up 2.7% in South Korea, 1.8% in Taiwan, 1.0% in India, and 0.9% in Japan and Singapore. In Indonesia where a 2-day monetary policy review began amid concerns about depleted international reserves, share prices bucked the upward trend and closed 0.5% lower. Stock markets are up around 0.5% in Germany, Italy and Spain as well as among the major U.S. barometers in futures trading prior to the opening bell. Prices for gold, silver and WTI oil are somewhat lower, and Bitcoin clawed back 0.8% overnight. 10-year sovereign debt yields have dipped a basis point in Germany, France, Italy, Spain and Switzerland while holding steady in the United States, Great Britain and Japan.
For a second straight session, the flow of data reports has been low, and attention has been fixed on other stuff like the deadline of the current two-week ceasefire in the Middle Eastern war. President Trump has not budged from the blockade imposed by the United States of ships to and from Iranian ports. It will lift only when a permanent deal with Iranian leaders is finalized, and he has signaled also that he is not predisposed to extending the current temporary ceasefire that expires at midnight on Wednesday. Negotiations, as before, will take place in Islamabad, with VP Vance again heading up the U.S. team.
Another event today that will be closely watched will be Fed Chairman nominee Warsh’s confirmation hearings before the Senate Banking Committee. Two areas of particular interest concern 1) whether his immense wealth believed to exceed $100 million might present a conflict of interest regarding areas over which the Federal Reserve regulates and 2) whether he is inclined to prioritize the interests of the country to preserve price stability or the wishes of President Trump for much lower interest rates.
Data reported today underscore the damage to business confidence around the world from the supply shock caused by the Middle Eastern war but fail to show higher-than-feared inflation.
Slovenian producer price inflation eased 0.3 percentage points to a six-month low in March of 0.9%.
The March increase in Canadian consumer prices (0.9% from February and 2.4% year-on-year) was 0.1 percentage point lower than the market consensus. The 2.4% 12-month increase matched readings three months earlier and before that a 7-month high last September. Core CPI inflation of 2.5% matched the second lowest reading in the past 12 reported months, bettered only by February’s 2.3%.
Polish producer prices were below year-earlier readings for a 34th straight month in February, but the -0.8% rate of deflation was the smallest in that streak.
Although a 0.9% quarterly rise in New Zealand consumer prices last quarter marginally exceeded street expectations of 0.8%, the year-on-year 3.1% inflation rate merely matched the prior quarter’s reading and was close to 3.0% experienced in the third quarter of 2025.
Moldovan producer price inflation declined to 1.2% in March from 2.2% in February, 3.5% in February and 7.1% last September.
British on-year wage growth of 3.8% overall and 3.6% for regular pay only in December-February was lower than forecast and down from 4.2% and 4.1% in September-November.
Other British labor market statistics reported today included greater-than-expected jobless insurance claims, a 6-month low unemployment rate of 4.9%, and slower employment growth.
Investor confidence in Germany and all of Euroland absorbed a big blow from the outbreak of the Middle Eastern war and the devastating supply shock that ensued from the shutdown of the Strait of Hormuz to shipping traffic. The ZEW Institute-compiled index of investor expectations in Germany transitioned from a 66-month high in January of 59.6 to 58.3 in February, -0.5 in March and -17.2 this month, which is considerably more pessimistic than the consensus of around -5 that had been anticipated. The companion reading of perceived current conditions in Germany fell from a 63-month high but still depressed -65.9 reading in March to a 4-month low of -73.7 in April, which is also weaker than analysts were expecting.
Regarding the whole euro area, the ZEW expectations index sank much deeper than forecast in April to a 41-month low of -20.4 from -8.5 in March. Current conditions deepened to -43.0 from -29.9 in the prior month, and price expectations, which had surged 78.8 index points to 78.9 in March remained close to that fearful level at 79.0 this months.
South African business confidence, which had improved 132.3 in November from 123.8 in October and 113.2 at mid-2025, has remained in a tight shot group averaging 132.6 over the four subsequent months.
U.S. retail sales jumped by a slightly larger-than-forecast 1.7% last month due mainly to a 15.5% leap in sales as gas stations, but sales excluding that component also showed continuing resilience with a 0.6% monthly increase that was almost as high as the 0.7% advance in February. Total sales in the first quarter recorded a 1.2% quarterly increase and a 3.7% rise compared to a year earlier.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: British labor market data, German and Euroland ZEW expectations, U.S. retail sales
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