Global Financial Briefing — Wednesday, 29 April 2026

Retrospective briefing — data as of 29 April 2026. Valuation table omitted (trailing P/E not available for past dates).

Snapshot

Key Themes

1. Trump's Iran blockade intensifies — Trump vowed to maintain the US naval blockade of Iran until a nuclear deal is reached. Goldman Sachs estimates Hormuz exports have fallen to just 4% of normal. WTI surged 6.95% to $106.88 and Brent 6.08% to $118.03, near its all-time high.
2. FOMC holds with historic 4-way dissent — The Fed left rates at 3.50–3.75% in an 8-4 split not seen since October 1992. Stephen Miran dissented for a cut; Hammack, Kashkari, and Logan opposed an easing bias in the statement. Powell held his final press conference as chair, confirming he'll stay on as a Board Governor.
3. Bear shift across the Treasury curve — 2Y +8 bps to 3.92%, 10Y +6 bps to 4.42% post-FOMC. Real yields (TIPS 10Y) rose to 1.96%. 10Y2Y spread narrowed slightly to +50 bps.
4. Europe strongly rebounds — DAX +1.41%, FTSE +1.62%, STOXX 600 +1.38%, reversing Tuesday's oil/BOJ-driven selloff.
5. Q1 GDP and March PCE due tomorrow — the first official read on whether the stagflation scenario is materialising under the oil shock.

Global Equity Markets

Context: S&P 500 is 0.6% below its all-time high of 7,178.74 — effectively at all-time highs. Nasdaq 100 is 0.5% below its ATH of 27,315.23. The Dow at 48,862 is 3.3% below its ATH of 50,512.79. European indices are 4–5% below their ATHs. The Nikkei at 59,285 is slightly below its ATH of 60,904. Brazil (IBOV) is 7.3% below its ATH, weighed by oil-importing cost pressures.

US Treasury Yield Curve

``` US Treasury Yield Curve — April 29, 2026 vs. March 24, 2026 5.25%| | ● ● 5.00%|·········································· /····· | ○ ● 4.75%|·······································/········· | / 4.50%|····································/············ | ○ ● 4.25%|·························/·····/··············· | / / 4.00%|····················/···/····················· | ○ / ●/ 3.75%|·············/···//····························· | / ●● 3.50%|_/______ 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 20Y 30Y

— April 29, 2026 (current) ○ March 24 (1-month prior) ```

Analysis: The yield curve shifted sharply higher on April 29, driven by the FOMC's hawkish 8-4 hold and the oil supply shock pushing inflation expectations up. The 2Y rose 8 bps to 3.92% — the single largest daily move in the short end in weeks — as the three hawkish FOMC dissenters (Hammack, Kashkari, Logan) opposing any easing bias reinforced the "higher for longer" pricing. The 10Y jumped 6 bps to 4.42%, its highest close of the week. The curve continued a mild bear flattener: 10Y2Y narrowed to +50 bps from +52 bps the prior day. Real yields (TIPS 10Y) ticked up to 1.96%, suggesting the oil shock is being read as a supply-side inflation driver rather than a demand stimulus. Compared to one month ago (March 24), the curve has barely moved despite the sharp intraweek volatility: 2Y up only 2 bps, 10Y up 3 bps, reflecting a market in genuine uncertainty about the rate path.

Credit Spreads

Credit spreads remain remarkably contained given the geopolitical backdrop. US HY tightened 3 bps on the day — energy-heavy HY issuers benefiting from the oil surge. IG is unchanged at 81 bps, holding the multi-year tights set in early April.

Euro Area Yield Curve (ECB AAA)

Source: ECB AAA-rated euro area YC API, 29 April 2026.

``` Euro Area Yield Curve — April 29 vs. April 28, 2026 3.75%| | ● ● 3.50%|··································/····· | ○ ● / 3.25%|·······················/········/······· | / / 3.00%|···················/·········/··········· | ○ ● / / 2.75%|··········/····/·········/··············· | / / / 2.50%|······/···/·····○·●···/················· | ● ○ / / 2.25%|··/···/·············/··················· | / / 2.00%|/_/_____ 3M 1Y 2Y 5Y 10Y 20Y 30Y

— April 29 (current) ○ April 28 (prior day) ```

Analysis: The ECB curve shifted uniformly higher on April 29, with the front-end moving more (3M and 2Y +7 bps each) than the long-end (20Y and 30Y flat or -1 bp). The short-end move reflects the oil-driven inflation pass-through — with the ECB deposit rate at 2.00%, the 3M ECB curve at 2.24% implies the market is not pricing near-term additional cuts. DAX +1.41% and FTSE +1.62% demonstrated Europe's resilience: the energy sector received a powerful tailwind from the oil surge, outweighing the higher sovereign yield headwind.

Commodities

Oil: The dominant market story on April 29. WTI surged $6.94 (+6.95%) to $106.88 — its largest single-day gain since early March — and is now 10.5% below its all-time high of $119.48. Brent at $118.03 is a mere 1.9% from its all-time high of $120.30, effectively at multi-year highs. Trump's Wednesday statement that he would maintain the US naval blockade of Iran until a nuclear deal is signed drove the move. Goldman Sachs estimates Strait of Hormuz throughput has collapsed to 4% of normal levels; US DOD estimates Iran has lost $4.8B in oil revenue since blockade inception. Iran's oil storage is reportedly filling, and Trump's claim that Iranian infrastructure is "days from exploding" added urgency.

Gold: Fell $46 (-1.01%) to $4,545.20, which is 18.6% below its all-time high of $5,586.20. The gold selloff is notable given the oil/inflation backdrop — likely profit-taking as traders rotate from safe-haven gold into oil and energy equities. Safe-haven demand also moderated as the FOMC's hawkish hold supported the USD.

Natural Gas: Rose +3.44% to $2.65/MMBtu, benefiting from the broader energy complex surge.

Foreign Exchange

The US dollar broadly strengthened on the FOMC hawkish hold: the Broad USD Index rose to 119.10 from 118.77 the prior day. EUR/USD fell to 1.1695 from 1.1715. USD/JPY extended to 160.23, the yen's weakest close since the BOJ's April 28 decision — reflecting that the BOJ's rate hold and cautious messaging (despite the hawkish dissent and CPI upgrade) is insufficient to arrest yen weakness while the US Fed maintains a hawkish stance. The Swiss franc also weakened against the dollar (USD/CHF 0.7902 vs. 0.7888 prior day), a mild surprise given the oil-driven risk-off in parts of the market.

US Macro Dashboard

Q1 GDP advance estimate due April 30. The market is acutely focused on tomorrow morning's data. Q4 2025 real GDP came in at just 0.5% annualised; if Q1 2026 confirms a deteriorating trend alongside oil-driven inflation, the stagflation trade will intensify. March PCE (Fed's preferred inflation gauge) will capture the first full month of Hormuz-driven energy pass-through.

News & Analysis

1 — Trump's Iran blockade: oil at decade-high, Brent near ATH

WTI crude surged 6.95% to $106.88 and Brent 6.08% to $118.03 after Trump stated on Wednesday he will maintain the US naval blockade of Iran until a nuclear deal is reached. Goldman Sachs estimates Hormuz throughput has collapsed to 4% of normal. Both WTI and Brent are up roughly 60% since the US-Israel-led operation against Iran began in late February. The US DOD estimates Iran has lost $4.8B in oil export revenue since the blockade began; Iran's storage capacity is reportedly running out within weeks. With Brent at $118.03 — just 1.9% from its all-time high of $120.30 — the physical market is in a genuine supply shock. Natural gas (+3.44%) also benefited from the broader energy complex surge.

2 — FOMC: historic 4-dissenter vote; Powell's final presser as chair

The Federal Open Market Committee voted 8-4 to hold the federal funds rate at 3.50–3.75% on April 29, the most split vote since October 1992. The four dissenters had divergent motivations: Stephen Miran dissented in favour of a 25 bps cut, citing softening growth; while Michelle Bowman Hammack, Neel Kashkari, and Lorie Logan dissented against inclusion of an easing bias in the statement, signalling they do not want even implicit guidance toward cuts. The result is a Fed paralysed between competing risks: cutting into an oil-driven inflation surge versus holding as the real economy decelerates. Chair Powell confirmed he will stay on as a Board of Governors member after his term as Chair ends, saying Trump's "legal attacks left me no choice." The 10Y Treasury jumped 6 bps to 4.42% post-announcement.

3 — Q1 GDP and March PCE due April 30

Tomorrow's data slate is the most consequential in weeks. Q4 2025 GDP came in at just 0.5% annualised; Q1 2026 is the first official read on whether the US economy is slipping into stagflation. March PCE will be the first full-month CPI-comparable reading to capture Hormuz-driven energy prices and early tariff pass-through. An above-consensus PCE coupled with a weak GDP print would cement the stagflation trade and make the Fed's four-way dissent look prescient.

4 — Europe rebounds sharply; oil tailwind offsets rate headwind

DAX +1.41%, FTSE +1.62%, STOXX 600 +1.38%, STOXX 50 +1.12%. European energy stocks surged with oil, more than offsetting the yield rise headwind. The FTSE's 1.62% rebound was especially notable given its 1.16% decline the prior day — the UK market's energy weighting made it both the hardest hit by Tuesday's rate shock and the biggest beneficiary of Wednesday's oil surge. The DAX at 24,292 is now slightly below its all-time high of 25,508 (4.8%), back above its 50-day MA of 23,863.

5 — Japan (Nikkei 225) −1.06% post-BOJ; yen at 160.23

The Nikkei fell 632 points (−1.06%) to 59,285 in its first full session after the BOJ's April 28 hawkish hold — confirming the market's negative verdict on the decision. The yen continued to weaken to 160.23, partly defying the logic of a hawkish BOJ (whose stated intention was to hike in June). Market participants appear sceptical that the BOJ can follow through amid global stagflation risk. The Nikkei sits slightly below its all-time high of 60,904 (−2.7%), well above both its 50-day MA (55,939) and 200-day MA (49,641).

6 — Asia broadly weak; Brazil IBOV −2.05%

KOSPI −1.38%, Hang Seng −1.28%, Nifty 50 −0.74%, ASX −0.24%. Asia ex-Japan was broadly negative, reflecting the oil supply shock which is unambiguously negative for oil-importing economies. Brazil's IBOV fell 2.05% despite being an oil exporter — domestic political concerns and the broader EM selloff (EEM −0.48%) dominated.

Central Bank Watch

Fed: The 8-4 split at the April 29 meeting sets up the June FOMC as a pivotal event. If Q1 GDP (due tomorrow) is weak and March PCE is high, the Fed will face an impossible choice. Miran's dovish dissent is the first dissent for a cut at the FOMC in years; the three hawkish dissenters (Hammack, Kashkari, Logan) signal that any easing language would face significant internal resistance. Markets that had been pricing 2027 hikes as of Tuesday may now be pricing a longer "hold" period.

ECB: Deposit rate at 2.00%. The ECB short end (3M at 2.24%) shows no immediate rate-cut expectations. ECB's June meeting (June 5) will come after Q1 GDP and inflation data; the oil shock complicates the case for further easing.

BOJ: The first post-decision market reaction (Nikkei −1.06%) and yen weakness to 160.23 are cautionary signals for the June hike that BOJ Governor Ueda signalled. If the yen continues to slide, the BOJ may face pressure to accelerate rather than defer the next move.

Appendix — Policy Rates & Spreads

Data sources: FRED (US Treasury yields, Fed policy rates, S&P 500, VIX, credit spreads, FX, US macro); ECB YC API (euro area AAA yield curve); yfinance (global equity index levels, commodities); web search (FOMC decision details, Iran blockade/oil news, economic calendar).