This global economy briefing tracks a session that revealed the war’s inflationary transmission belt in hard numbers: US import prices surged 1.3% in February — double expectations and the biggest monthly jump in nearly four years — even before March’s oil shock fully feeds through to trade invoices. Gold snapped a nine-day losing streak with its sharpest single-session rebound since the conflict began, while German business confidence suffered its worst expectations crash since Russia invaded Ukraine. The 15-point US peace proposal dominated headlines but Iran’s rejection kept the Strait of Hormuz functionally closed, leaving Latin American commodity exporters caught between diplomatic optimism and the reality of $100 oil. This is part of The Rio Times’ daily global economic intelligence for the Latin American financial community.
The Big Three
US import prices surged 1.3% in February, doubling the 0.6% consensus — the biggest monthly gain in nearly four years, driven by a notable increase in nonfuel goods costs that suggests underlying price pressures are building independently of the oil shock. Export prices jumped 1.5% against a 0.5% forecast. The data arrives one week after PPI printed 0.7% — as covered in our March 19 global economy briefing — and confirms that pipeline inflation is broadening well beyond energy.
Gold rebounded over $160 in a single session, snapping a nine-day losing streak — April futures surged 3.6% to close near $4,560 after touching lows around $4,098 on Tuesday. The move was gold’s sharpest daily recovery since the war began, fueled by dollar weakness, falling Treasury yields, and the 15-point peace proposal lifting hopes that the oil-driven inflation spiral might be contained.
German Ifo expectations crashed from 90.2 to 86.0 — the worst drop since the Ukraine invasion — as the Iran war shattered Germany’s fragile recovery. The headline business climate index fell to 86.4 from 88.4. Ifo President Clemens Fuest said the war has “put any hope of a recovery on ice.” Manufacturing sentiment dropped to −14.3, services swung negative to −5.1, and construction expectations hit their lowest since March 2022.
Economic Dashboard
| INDICATOR | ACTUAL | EXPECTED | PREVIOUS | VERDICT |
|---|---|---|---|---|
| US Import Prices MoM (Feb) | +1.3% | +0.6% | +0.6% | ▲ Hot |
| US Export Prices MoM (Feb) | +1.5% | +0.5% | +0.6% | ▲ Hot |
| US Current Account Q4 | −$190.7B | −$211.0B | −$239.1B | ▲ Beat |
| EIA Crude Inventories | +6.926M | −1.300M | +6.156M | ▼ Build |
| MBA Mortgage Rate (30Y) | 6.43% | — | 6.30% | ▲ Rising |
| German Ifo Climate (Mar) | 86.4 | 86.2 | 88.4 | ▼ Miss |
| German Ifo Expectations (Mar) | 86.0 | 86.0 | 90.2 | ▼ Crash |
| UK CPI YoY (Feb) | 3.0% | 3.0% | 3.0% | ● Inline |
| UK Core CPI YoY (Feb) | 3.2% | 3.1% | 3.1% | ▲ Hot |
| Spain PPI YoY (Feb) | −7.0% | — | −2.8% | ▼ Deflation |
| Japan Corp Services PPI YoY | 2.7% | 2.6% | 2.6% | ▲ Hot |
| Japan Leading Index (Jan) | 112.1 | 112.4 | 110.4 | ● Inline |
| Brazil FGV Consumer Conf (Mar) | 88.1 | — | 86.1 | ▲ Beat |
| UK House Price Index YoY | +1.3% | +1.7% | +1.9% | ▼ Miss |
| US 5-Year Note Auction | 3.980% | — | 3.615% | ▲ Rising |
Europe
Ifo Crashes, UK Core CPI Stickier Than Expected
The German Ifo business climate index plunged to 86.4 from 88.4, its sharpest monthly decline since the early weeks of the Ukraine war. Expectations collapsed from 90.2 to 86.0 while current conditions held steady at 86.7. Every sector deteriorated: manufacturing fell to −14.3, services swung to −5.1, and construction expectations hit their lowest reading since March 2022.
Ifo President Clemens Fuest declared the war has put recovery hopes “on ice,” while KfW economist Sebastian Wanke added that “the recovery is stuck in the Strait of Hormuz.” Energy-intensive industries bore the heaviest damage. The data erases the optimism built during February’s reading, which had reached its highest level since August 2025.
UK inflation held at 3.0% year-on-year in February, matching consensus, but core CPI edged higher to 3.2% against a 3.1% forecast. Producer input prices rose 0.8% month-on-month, above the 0.5% expected, signaling pipeline pressures. UK house prices decelerated to 1.3% annual growth from 1.9%, missing the 1.7% consensus and flagging mortgage-rate sensitivity.
European equities rallied strongly on peace-proposal optimism. The STOXX 600 climbed 1.41%, the DAX surged 1.78%, the FTSE 100 gained 1.42% to reclaim 10,100, and the CAC 40 advanced 1.51%. Spain’s PPI plunged to −7.0% year-on-year from −2.8%, a dramatic deflationary print that reflects the war’s uneven impact across the eurozone periphery.
Verdict
The Ifo crash confirms what markets feared — the Iran war is breaking the European recovery. UK core CPI stickiness gives the BoE no room to cut even as the housing market cools. The STOXX 600 rally is a ceasefire trade, not a fundamentals trade.
United States
Import Prices Confirm Inflation Pipeline Is Broadening
Import prices jumped 1.3% in February — more than double the 0.6% consensus and the largest monthly gain in nearly four years. The year-on-year reading accelerated to 1.3% from 0.3%. Export prices surged even more dramatically at 1.5% against a 0.5% forecast. The Bureau of Labor Statistics noted that nonfuel goods costs drove much of the increase, meaning the pressures extend beyond the obvious energy channel.
The current account deficit narrowed sharply to $190.7 billion in the fourth quarter, beating the $211 billion consensus by a wide margin and improving from $239.1 billion. This provides a rare positive signal on US external balances, though the Q4 data predates the war’s disruption to trade flows. EIA crude inventories built by a massive 6.926 million barrels against expectations for a 1.3 million draw, the second consecutive large build that signals demand destruction.
Mortgage rates climbed to 6.43% from 6.30%, pushing application volumes down 10.5% week-on-week. The 5-year Treasury auction cleared at 3.980%, up sharply from the prior 3.615%, reflecting the market’s repricing of inflation risk. The 10-year yield fell to roughly 4.35% as peace-proposal optimism pulled duration higher, while the VIX dropped 6% to 25.33.
Equities extended their recovery for a second consecutive session. The S&P 500 rose 0.54% to 6,591.90, the Dow gained 0.66% to 46,429.49, and the Nasdaq advanced 0.77% to 21,929.83. Tech led the advance with Nvidia up 2% and AMD and Intel each jumping over 7%. JetBlue surged 18% on merger talks reported by Semafor, while Arm Holdings popped 10% on in-house chip plans. Micron fell 3.4% for its fifth consecutive losing session.
Verdict
Import prices confirm what PPI warned last week — inflation is broadening beyond energy. The 6.9 million barrel crude build screams demand destruction even as OPEC+ supply remains tight. The equity rally is running on diplomatic hope while the inflation data tells a darker story.
Asia-Pacific
Nikkei Surges 2.9%, Japan Services Inflation Stays Hot
Japan’s Nikkei 225 surged 2.87% to 53,749.61 in its strongest session in weeks, driven by ceasefire optimism and falling oil prices that benefit energy-importing Japan disproportionately. Technology stocks led the advance with SoftBank rising 7.9%, Fujikura gaining 7.2%, and Kioxia Holdings up 6.4%. Heavyweight exporters and defense names also posted broad gains.
Japan’s corporate services price index rose 2.7% year-on-year in February, above the 2.6% consensus and matching the prior reading. The persistent services inflation keeps the BoJ’s normalization path alive even as headline CPI fell to 1.3% — below the 2% target. Foreign investors continued exiting Japanese assets, selling 635 billion yen in bonds and 2.5 trillion yen in stocks.
Hong Kong’s Hang Seng rose 1.09% while China’s CSI 300 gained 1.4% to 4,537.47 in a broad risk-on session. The gains were tempered by ongoing uncertainty over China’s domestic demand trajectory and the unresolved nature of the Hormuz disruption, which affects China’s crude imports from the Gulf.
Japan’s leading index for January printed at 112.1, slightly below the 112.4 consensus but well above the prior 110.4. The coincident indicator surged 3.4% month-on-month, smashing the 2.5% forecast. These pre-war readings suggest the Japanese economy carried solid momentum into the conflict period.
Verdict
The Nikkei’s 2.9% surge is the clearest ceasefire-trade expression in Asia. Japan benefits more than any major economy from lower oil. But foreign selling of Japanese assets persists, and BoJ rate-hike expectations are not dead — services PPI staying hot keeps April normalization live.
Latin America & Africa
Ibovespa Surges 2% as Oil Drops, Consumer Confidence Ticks Up
The Ibovespa climbed nearly 2% to trade above 185,000 as ceasefire optimism drove banks, utilities, and industrials higher. Bradesco and Banco do Brasil each rose about 2%, while WEG gained 3% and Rede D’Or advanced 2.7%. Vale added 1.9% on improved global sentiment. The lone drag was Petrobras, which fell over 1% as lower oil prices cut into its revenue outlook.
Brazil’s FGV consumer confidence index rose to 88.1 in March from 86.1, a modest improvement that suggests households are not yet feeling the full impact of energy-driven inflation. Foreign exchange flows showed a net outflow of $119 million, a sharp improvement from the prior week’s $708 million outflow. The USD/BRL hovered around R$5.20–5.23, consolidating Monday’s sharp real appreciation.
The Copom minutes released Tuesday had flagged that rising oil prices may prevent the larger-magnitude rate cuts that were expected, keeping the DI curve steepened. The market now sees the May cut as probable but not locked in, with traders watching whether Brent stabilizes near $100 or re-tests $110. The BCB’s next Focus Survey will be critical for gauging whether IPCA expectations are drifting toward the ceiling.
Across the region, the Ibovespa’s decoupling from Wall Street continued — Brazil outperformed the S&P 500 for a third consecutive session as the carry trade at 14.75% Selic attracts inflows. ECB President Lagarde spoke at 04:45 UTC on the European outlook, while ECB Chief Economist Lane discussed monetary policy transmission, both without major policy surprises.
Verdict
Brazil’s two-track dynamic sharpens: the Ibovespa benefits from ceasefire hopes (banks, builders, utilities rally) while Petrobras drags on lower oil. Consumer confidence ticking up despite the war suggests the 14.75% Selic carry is insulating the real economy — for now. Friday’s PCE data is the next global macro catalyst.
Trades & Tilts
→ Long gold into Friday PCE — the $160 rebound signals forced liquidation is exhausted; any hot inflation print re-ignites safe-haven demand
→ Fade the crude inventory build — the 6.9M barrel stockpile gain reflects pre-war import timing, not structural demand destruction
→ Overweight Brazil banks over Petrobras — the Copom cutting cycle plus ceasefire trade lifts rate-sensitive sectors while oil names face two-way risk
→ Short German industrials via DAX puts — the Ifo crash is a leading indicator; current conditions have not yet caught down to expectations
→ Watch JetBlue and Arm Holdings for follow-through — 18% and 10% pops on M&A and strategy shifts create momentum trades if volumes confirm
Previously: Global Economy Briefing — March 24, 2026 · Sources: CNBC Markets · CNBC Oil · ifo Institute