This global economy briefing covers Thursday, April 2 — the last trading session before Good Friday and a day that delivered the single most violent oil move of the war. WTI crude surged 11.4% to $111.54, its highest close since June 2022, after Trump’s Wednesday-night address made clear the Iran conflict will drag on for weeks. Equities staged a remarkable intraday reversal: the Dow fell 668 points at the open before finishing down just 61, after Iran and Oman announced a Hormuz toll protocol that eased some of the acute shipping panic. The S&P 500 ended up 0.11% and the Nasdaq gained 0.18%, but the week’s gains — S&P +3.4%, Nasdaq +4.4% — masked extreme volatility. Jobless claims plunged to 202,000 (consensus 212K), the best reading of the year, while the trade deficit came in narrower than feared. Tesla plunged 5.5% on a Q1 delivery miss. Markets are now closed until Monday. This is part of The Rio Times’ daily global economy briefing for the Latin American financial community.
The Big Three
WTI crude surged 11.4% to $111.54 — the highest settlement since June 2022 — while Brent jumped 7.8% to $109.03, inverting the global benchmark structure. Trump’s Wednesday address vowing two to three more weeks of “extremely hard” strikes obliterated the ceasefire rally. The intraday high hit $112.10. Late in the session, reports that Iran and Oman are coordinating a toll-based protocol for tankers in the Strait of Hormuz provided partial relief, trimming equities off their lows. As analyzed in our April 2 global economy briefing, ISM prices at 78.3 had already flagged the energy pass-through — now the crude itself has confirmed it.
Initial jobless claims plunged to 202,000 — beating the 212K consensus by 10,000 and hitting the lowest level of 2026. The four-week average fell to 207,750. Continuing claims edged up to 1.841 million, essentially in line. The labor market continues to defy the geopolitical shock: employers are hoarding workers even as energy costs explode. The trade deficit narrowed to $57.3 billion, well below the $60.5 billion consensus, as exports surged to $314.8 billion. But the Atlanta Fed GDPNow slid to 1.6% from 1.9%, the sharpest single-day revision in weeks.
Tesla plunged 5.5% after Q1 deliveries of 358,023 missed the 365,645 consensus — and production outpaced deliveries by 50,000 units, the largest inventory buildup in a single quarter. Energy storage deployments collapsed 38% QoQ to 8.8 GWh from Q4’s record 14.2 GWh, missing the 14.4 GWh consensus badly. Model S and X production has ended entirely. The stock is now down roughly 30% in 2026. In the final minutes of trading, Trump unveiled up to 100% tariffs on some pharmaceuticals and adjusted metals duties, adding a new policy shock to an already volatile session.
Economic Dashboard
| INDICATOR | ACTUAL | EXPECTED | PREVIOUS | VERDICT |
|---|---|---|---|---|
| US Initial Jobless Claims | 202K | 212K | 211K | ▲ Beat |
| US Continuing Claims | 1,841K | 1,840K | 1,816K | ● Inline |
| US Trade Balance (Feb) | −$57.3B | −$60.5B | −$54.7B | ▲ Narrower |
| US Challenger Job Cuts (Mar) | 60.6K | — | 48.3K | ▲ Rising |
| US Atlanta Fed GDPNow (Q1) | 1.6% | 1.9% | 1.9% | ▼ Downgraded |
| US Total Vehicle Sales (Mar) | 16.30M | — | 15.80M | ▲ Strong |
| US Natural Gas Storage | +36B | +38B | −54B | ● Inline |
| US Baker Hughes Oil Rigs | 411 | — | 409 | ▲ +2 |
| French Gov Budget Balance (Feb) | −32.1B | — | −9.7B | ▼ Deteriorating |
| Italian Retail Sales MoM (Feb) | 0.0% | 0.3% | 0.6% | ▼ Miss |
| India Mfg PMI (Mar) | 53.9 | 53.8 | 56.9 | ● Inline |
| Brazil Industrial Production MoM (Feb) | 0.9% | 0.7% | 2.1% | ▲ Beat |
| Canada Trade Balance (Feb) | −C$5.74B | −C$2.50B | −C$4.18B | ▼ Wider |
| China Caixin Services PMI (Mar) | 52.1 | 53.6 | 56.7 | ▼ Sharp Slowdown |
| Japan Services PMI Final (Mar) | 53.4 | 52.8 | 53.8 | ▲ Beat |
Europe
French Fiscal Hole Widens, Italian Consumer Stalls, ECB Holds the Line
The French government budget deficit tripled from -9.7 billion euros in January to -32.1 billion in February — a deterioration that intensifies the pressure on Paris as it wrestles with its structural fiscal shortfall under EU deficit rules. The French 10-year OAT auction cleared at 3.73%, up sharply from 3.46% at the previous sale, reflecting the repricing of French sovereign risk in a world of elevated energy costs and wider deficits. French car registrations surged 12.9% year-on-year in March, reversing the prior -14.7% decline.
Italian retail sales flatlined in February at 0.0% month-on-month, missing the 0.3% consensus and decelerating sharply from January’s 0.6% growth. Annual growth slowed to 1.6% from 2.5%. This follows the broader pattern flagged in the April 1 briefing: French spending collapsed -1.4%, German retail fell -0.6%, and now Italian consumers have joined the pullback. The European consumer is retreating before the full oil pass-through has even reached the pump.
The ECB published its Economic Bulletin during the session, reiterating that the policy stance remains appropriate and noting that “inflation risks are tilted to the upside” from energy disruptions. European equity markets were closed for the April 2 session in some cases or traded in a muted fashion ahead of Good Friday, with most of the price action concentrated in the oil complex. Dated Brent reached its highest level since 2008 during intraday trading before settling at $109.03.
The week ends with Europe in an uncomfortable position: Wednesday’s CPI undershoot gave the ECB breathing room, but Thursday’s oil explosion at $109+ puts that relief on borrowed time. The French fiscal deterioration adds another layer of risk — OAT spreads over Bunds are the widest since the summer of 2023 mini-crisis. Markets are closed Friday; the next full session is Monday.
Verdict
Wednesday’s CPI undershoot is already stale. With Brent at $109 and WTI at $111, the April CPI readings across Europe will tell a very different story. The French fiscal hole and OAT repricing to 3.73% are the domestic vulnerability. The ECB Bulletin’s “upside risk” language was published before Thursday’s oil explosion — expect a hawkish shift in tone when Lagarde next speaks.
United States
WTI Hits $111.54 as Equities Stage Stunning Intraday Reversal
The session opened with a rout. The Dow plunged 668 points at the low, the S&P 500 dropped 1.5%, and the Nasdaq fell 2.2% as traders reacted to Trump’s Wednesday-night escalation. Then Iran and Oman announced they are coordinating a toll-based protocol to allow monitored tanker passage through the Strait of Hormuz — and equities ripped higher. The Dow finished down just 61 points (-0.13%) at 46,504.67, the S&P 500 eked out a 0.11% gain to 6,582.69, and the Nasdaq added 0.18% to 21,879.18. The Russell 2000 outperformed at +0.70%.
Jobless claims dropped to 202,000, smashing the 212,000 consensus and printing the lowest reading of 2026. The four-week average fell to 207,750 from 210,750. The labor market remains extraordinarily tight despite six weeks of war and $111 oil. The trade deficit came in at $57.3 billion, narrower than the $60.5 billion consensus, as exports surged 4.2% to $314.8 billion. Imports rose more modestly to $372.1 billion. The deficit is down 54.8% from the year-ago period, when pre-tariff stockpiling had inflated imports.
Tesla was the session’s biggest single-stock story. Q1 deliveries of 358,023 vehicles missed the 365,645 consensus, and production of 408,386 left a 50,000-unit inventory overhang. Energy storage deployments cratered 38% to 8.8 GWh. The stock fell 5.5% — its worst day of 2026 — and is now down roughly 30% year-to-date. Challenger job cuts rose to 60,620 in March from 48,307, though the year-over-year rate remains deeply negative at -78%. Total vehicle sales hit 16.30 million SAAR, up from 15.80 million, suggesting pre-tariff pull-forward buying.
The Atlanta Fed GDPNow dropped to 1.6% from 1.9% — the most significant single-day downgrade in weeks — as the trade data and inventory signals fed into the model. The 10-year yield slipped 0.6bp to 4.313%. Fed Governor Bowman and Dallas Fed President Logan both spoke, with Logan scheduled during the oil surge. In the session’s final minutes, Trump announced tariffs of up to 100% on some pharmaceuticals and adjusted metals duties, adding a new tariff shock. Markets close for Good Friday; the March nonfarm payrolls report drops Friday morning into an empty tape.
Verdict
The intraday reversal was the market’s way of saying: we won’t go down on the war anymore — unless the Strait stays closed permanently. The Iran-Oman toll protocol is the first mechanism that could restore partial shipping flow, and that distinction matters. But WTI at $111 is a screaming inflation signal. Claims at 202K say the labor market is holding; GDPNow at 1.6% says the economy is not. Stagflation is no longer a theoretical risk — it’s pricing in real-time. Friday’s payrolls into a closed market is the wildcard.
Asia-Pacific
Caixin Services Collapses, Japan Holds, Korea Reserves Drop
China’s Caixin services PMI plunged to 52.1 from 56.7, massively missing the 53.6 consensus — the sharpest single-month deceleration in the series since the 2022 lockdowns. Combined with Tuesday’s Caixin manufacturing miss to 50.8, the private-sector picture in China is deteriorating rapidly. The 4.6-point services drop reflects the downstream impact of Hormuz on shipping costs, trade uncertainty, and the general risk-off environment hitting Chinese consumer services.
Japan’s services PMI was revised up to 53.4 from the 52.8 flash, a solid beat that keeps Japan’s services sector comfortably in expansion. The composite PMI held at 53.0 (consensus 52.5). Japan continues to display unusual resilience — the Tankan beat on Monday, services holding Thursday — suggesting the BoJ will stay on its tightening path. The 10-year JGB at 2.35% from Monday’s auction continues to signal a structural repricing of Japanese duration.
India’s manufacturing PMI came in at 53.9, barely above the 53.8 consensus but a sharp deceleration from February’s 56.9. The 3-point drop signals that India’s manufacturing boom is moderating as input costs rise — consistent with the broader EM story of energy inflation cutting into growth. South Korea’s FX reserves fell to $423.66 billion from $427.62 billion, a $3.96 billion drawdown likely reflecting BoK intervention to support the won during the mid-March oil spike.
Asian markets on Thursday had reversed sharply from Wednesday’s ceasefire rally — the Nikkei fell 1.4%, the Kospi dropped 2.82%, and the Hang Seng opened 0.5% lower. Friday saw a muted session in the thin holiday markets that were open, with tech providing some support from the Iran-Oman protocol news. The region enters the long weekend with WTI at $111 — a level that directly threatens Asian growth models dependent on imported energy.
Verdict
The Caixin services collapse to 52.1 is the most alarming Asian data point of the week. Combined with the manufacturing miss, China’s private sector is decelerating at a pace not seen since the pandemic. Japan’s resilience is the exception, not the rule. Korea’s reserve drawdown confirms active FX intervention. Asia enters the long weekend with $111 oil and no ceasefire — the Q2 growth outlook darkens by the day.
Latin America & Africa
Brazil IP Beats, Fipe Inflation Doubles, LatAm Shuts for Holy Week
Brazil’s industrial production rose 0.9% month-on-month in February, beating the 0.7% consensus and marking the sixth consecutive month of expansion, though decelerating from January’s 2.1% surge. Year-on-year output fell 0.7%, better than the -1.0% expected. The data confirms that Brazil’s factory sector continues to outperform low expectations under 14.75% Selic, supported by the agricultural supply chain and export demand. The improving PMI (49.0) and positive IP data suggest the contraction is bottoming.
The IPC-Fipe monthly inflation index more than doubled to 0.59% in March from 0.25% in February — a warning that São Paulo consumer prices are accelerating as energy costs feed through. This follows Wednesday’s manufacturing PMI showing persistent input inflation and aligns with the broader LatAm pattern of oil-driven price acceleration seen in Peru’s 2.38% monthly CPI spike and Colombia’s emergency 100bp rate hike.
Much of Latin America was shut for Maundy Thursday — Argentina, Colombia, Peru, Venezuela, Costa Rica, and Mexico all observed holidays. This compressed liquidity and left Brazil as the region’s only major market operating. Argentina’s tax revenue came in at 16,071 billion pesos, slightly below the prior 16,232 billion. The Ibovespa traded in a volatile session, with Petrobras the dominant force as WTI exploded above $111. B3 closes tomorrow for Good Friday.
The week’s LatAm narrative crystallized around three themes: Colombia’s 100bp hike as the hawkish template, Chile’s activity collapse as the growth casualty, and Brazil’s improving but inflation-threatened recovery. With Selic at 14.75% and the next Copom on April 28-29, the BCB faces a dilemma: the PMI and IP data support continued easing, but the Fipe acceleration and $111 oil argue for a pause. The region enters the long weekend with its monetary policy divergence — Banxico at 6.75%, Brazil at 14.75%, Colombia at 11.25% — as the defining feature of the cycle.
Verdict
Brazil’s IP beat is the constructive headline, but the Fipe acceleration to 0.59% is the forward-looking signal. With WTI at $111, the energy pass-through to Brazilian consumers has barely begun. The April 28-29 Copom decision is now binary: cut if oil falls on a ceasefire, hold if $110+ persists. Holy Week closures mean LatAm enters the weekend blind to Friday’s payrolls and any Iran developments — positioning risk is elevated.
Trades & Tilts
→ The Iran-Oman Hormuz toll protocol is the most important development of the week — it is the first mechanism that could partially reopen the Strait without a ceasefire; if confirmed, short the war premium in oil via May puts below $100
→ Friday’s nonfarm payrolls report drops into a closed equity market — any major miss (consensus ~200K) will gap futures Sunday night; position for vol expansion via VIX calls into the weekend
→ GDPNow at 1.6% versus claims at 202K is a classic stagflation divergence — the economy is slowing but won’t fire workers; short front-end duration as the Fed is trapped between growth weakness and inflation reacceleration
→ Tesla’s 50,000-unit inventory overhang and energy storage miss remove the last growth narrative; avoid TSLA into Q1 earnings unless you are positioned for a negative revision cycle
→ Brazil’s IP beat at +0.9% supports the Ibovespa-through-banks trade but the Fipe acceleration to 0.59% constrains the BCB; long Brazilian banks into April Copom only if oil retraces below $100
Previously: Global Economy Briefing — April 2, 2026 · Global Economy Briefing — April 1, 2026 · Sources: Trading Economics · CNBC Markets · TheStreet · The Rio Times