Blog week ending, 17th April 2026
Markets:
- Global equity markets bounced strongly this week, led by the US, with investors hopeful of a Middle East de-escalation and a positive start to the US quarterly earnings season. The Australian market was flat, weighed down by weaker domestic economic data.
- Markets moved to pricing almost no chance of another US central bank rate cut this year, however policymakers may to look through recent energy driven volatility if core inflation remains contained.
- In local stock news, rare earths and lithium stocks rose strongly with multiple catalysts including price hikes by China’s largest producers, an Australian-US financing announcement, and soaring Chinese lithium carbonate futures.
- BHP shares climbed to a six-week high after reports that China’s state iron ore buyer eased restrictions on purchasing BHP cargoes following a visit by the company’s incoming CEO.
- Westpac shares fell after the company flagged lower income from its markets division stemming from the war with Iran.
- Qantas Airways said fuel costs have surged, forcing the airline to reduce domestic capacity to manage the impact from the Iran war. The company remains heavily exposed to movements in jet fuel refining margins, which have risen sharply.
- Viva Energy entered a trading halt after a fire at its Geelong fuel refinery, exacerbating existing concerns around domestic fuel supply and prices.
- Oil price volatility remained in focus this week. Prices initially rose, recouping losses from last week, after US President Trump ordered the blockade of the Strait of Hormuz. Prices subsequently fell on news of ships continuing to transit the Strait and signs of a potential extension to the current ceasefire.
- The Australian dollar strengthened over the week, approaching the US72c mark as hopes of fresh Iran talks saw traders reduce exposure to safe-haven currencies including the US dollar.
Economics:
- The IMF raised its 2026 global inflation forecast to 4.4%, up 0.6% from January, citing higher energy and food costs stemming from the Iran war and disruptions to the Strait of Hormuz. The IMF also warned global economic growth could slow sharply to 1.7% in 2027 from 2.6% in 2025.
- Australian employment increased by 17,900 in March leaving the unemployment rate steady at 4.3%, supported by a slight fall in the participation rate. Full-time employment rose strongly whilst part-time jobs declined.
- Australian consumer sentiment recorded its largest fall since 2020 while business confidence also weakened sharply amid surging fuel prices coupled with higher interest rates.
- Australia’s consumer inflation expectations jumped to 5.9% in April from 5.2% in March, the highest level since November 2022, highlighting rising concerns over future price pressures.
- RBA Deputy Governor Andrew Hauser warned in a speech in New York that the Iran war risks creating a “nightmare scenario” for Australia of re-accelerating inflation alongside slowing economic growth.
- US annual inflation rate rose to 3.3% in March, the highest level since May 2024 and up sharply from 2.4% in each of the previous two months. The result was in line with expectation, with higher energy costs driving the increase.
- A key US consumer sentiment index plummeted 11% in earl April to a historic low, well below market expectations. The survey was conducted before the ceasefire agreement, with sentiment deteriorating across all demographics and index components.
- US existing home sales declined 3.6% in March to an annualised rate of 3.98 million, the lowest level in nine months and below market expectations.
- China’s economy grew by 1.3% in the March quarter, in line with market expectations and up from a 1.2% rise in the previous quarter, marking the strongest quarterly expansion since the December quarter of 2024.
- Chinese inflation decreased 0.7% in March from the previous month, with annual inflation easing to 1% from February’s three-year high of 1.3%. The outcome was below expectations and marked the first monthly decline since November.
- China’s export growth slowed to a five-month low, while imports rose at their fastest pace since late 2021, though oil and gas declined.
Politics:
- Talks held in Pakistan failed to produce any headway in the war with the US accusing Iran of refusing to curb its nuclear ambitions, while Iran seeks control of the Strait of Hormuz, war reparations, a broader regional ceasefire including Lebanon, and access to frozen overseas assets.
- US President Trump announced an immediate naval blockade of the Strait of Hormuz, ordering the Navy to interdict all ships and begin destroying Iranian sea mines. Other Western allies declined to participate in the blockade.
- President Trump also threatened 50% tariffs on China if Beijing is found to be supplying weapons to Iran, following intelligence reports suggesting as much. China’s foreign ministry denied the allegations.
- Israel and Lebanon held their first direct talks in decades in Washington. Both sides agreed to continue negotiations which culminated in an agreed 10-day ceasefire.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
