This global economy briefing covers the final trading day of March — a session that delivered the biggest single-day rally since May as unconfirmed reports said Iranian President Pezeshkian is open to ending the war. The Dow surged 1,125 points and the Nasdaq jumped 3.8%, but the euphoria could not erase a devastating month: the S&P 500 ended March down 5.3%, its worst monthly performance since 2022, with 10 of 11 sectors closing the month in the red. Eurozone headline CPI undershot consensus at 2.5% and core CPI eased to 2.3%, providing the ECB with unexpected relief. Japan’s Tankan survey beat across every major category, Korean exports surged 48.3%, and Colombia delivered a surprise 100bp rate hike to 11.25%. The API reported a massive 10.3 million barrel crude build, signaling demand destruction even as Brent held above $100. This is part of The Rio Times’ daily global economic intelligence for the Latin American financial community.
The Big Three
The Dow surged 1,125 points (+2.49%) and the Nasdaq jumped 3.83% — the best day for all three indexes since May — on reports that Iran’s president is open to ending the war. The S&P 500 gained 2.91% to 6,528.52 as Nvidia rose 5.6%, Caterpillar surged 6%, and Boeing jumped 5.2%. Trump told the New York Post he’s “obliterating” Iran and expects the war to end soon. But the rally could not redeem the month: the S&P 500 finished March down 5.3%, its worst monthly decline since 2022, with 10 of 11 sectors negative. As covered in our March 31 global economy briefing, the war has rewritten the macro playbook.
Eurozone headline CPI undershot at 2.5% versus 2.6% consensus, and core CPI eased to 2.3% from 2.4% — the first genuine inflation relief of the conflict. After Monday’s explosion in consumer inflation expectations to 43.4, the hard data surprised to the downside. French CPI hit 1.7% — still low by eurozone standards — while Italian HICP held at 1.5%. The ECB now has cover to maintain its current stance rather than panic into tightening. The German 2-year Schatz auction cleared at 2.62%, up from 2.27%, reflecting residual repricing but less dramatic than last week’s Italian BTPs.
Japan’s Tankan survey beat across every major category — large manufacturers at 17 versus 16 consensus, large non-manufacturers at 36 versus 33. The data confirms that Japan’s corporate sector entered the war with strong momentum, even as Friday’s retail sales contraction showed the consumer side cracking. Meanwhile, Korea’s March exports surged 48.3% versus 44.9% consensus, the strongest reading in months, though the base-effect-driven jump masked the February industrial production collapse. Colombia’s central bank raised rates 100bp to 11.25% as expected.
Economic Dashboard
| INDICATOR | ACTUAL | EXPECTED | PREVIOUS | VERDICT |
|---|---|---|---|---|
| EZ CPI YoY (Mar Prelim) | 2.5% | 2.6% | 1.9% | ▲ Below Fear |
| EZ Core CPI YoY (Mar Prelim) | 2.3% | 2.4% | 2.4% | ▼ Easing |
| French CPI YoY (Mar Prelim) | 1.7% | 1.6% | 0.9% | ● Inline |
| Italian CPI YoY (Mar Prelim) | 1.7% | — | 1.5% | ● Mild Rise |
| Portuguese CPI YoY (Mar Prelim) | 2.7% | — | 2.1% | ▲ Rising |
| German Retail Sales MoM (Feb) | −0.6% | 0.3% | −1.1% | ▼ Miss |
| French Consumer Spending MoM (Feb) | −1.4% | −0.3% | 0.4% | ▼ Plunge |
| German Unemployment Change (Mar) | 0K | 2K | 1K | ▲ Beat |
| UK GDP QoQ (Q4) | 0.1% | 0.1% | 0.1% | ● Inline |
| UK Current Account (Q4) | −£18.4B | −£24.0B | −£10.7B | ▲ Beat |
| UK Nationwide HPI MoM (Mar) | 0.9% | 0.0% | 0.3% | ▲ Surge |
| US CB Consumer Confidence (Mar) | 91.8 | 87.8 | 91.0 | ▲ Beat |
| US JOLTS Job Openings (Feb) | 6.882M | 6.890M | 7.240M | ▼ Cooling |
| US Chicago PMI (Mar) | 52.8 | 54.8 | 57.7 | ▼ Miss |
| US Case-Shiller HPI YoY (Jan) | 1.2% | 1.4% | 1.4% | ▼ Cooling |
| US Texas Services Outlook (Mar) | −13.3 | — | −3.2 | ▼ Plunge |
| API Crude Stock Change | +10.263M | −1.300M | +2.300M | ▼ Massive Build |
| Japan Tankan Large Mfg (Q1) | 17 | 16 | 16 | ▲ Beat |
| Japan Tankan Large Non-Mfg (Q1) | 36 | 33 | 34 | ▲ Beat |
| Korea Exports YoY (Mar) | 48.3% | 44.9% | 28.7% | ▲ Surge |
| Korea Trade Balance (Mar) | $25.74B | $21.20B | $15.38B | ▲ Beat |
| China Caixin Mfg PMI (Mar) | 50.8 | 51.6 | 52.1 | ▼ Slowing |
| Colombia Rate Decision (Feb) | 11.25% | 11.25% | 10.25% | ▲ +100bp Hike |
| Brazil Gross Debt-to-GDP (Feb) | 79.2% | — | 78.7% | ▲ Rising |
| Chile Copper Production YoY (Feb) | −4.8% | — | −3.0% | ▼ Deepening |
| Australia Building Approvals MoM (Feb) | 29.7% | 5.8% | −7.2% | ▲ Blowout |
Europe
Eurozone CPI Undershoots, but Consumers Are Collapsing
Eurozone headline CPI came in at 2.5% year-on-year for March, below the 2.6% consensus, while core CPI eased to 2.3% from 2.4% — the first undershoot against expectations since the war began. The monthly CPI print was 1.2%, double February’s 0.6% but less alarming than the state-level German readings had suggested. French CPI hit 1.7% year-on-year, slightly above the 1.6% consensus, while Italian CPI rose to 1.7% with the harmonised measure flat at 1.5%. Portugal was the outlier, surging to 2.7% from 2.1%.
The consumer side of the European economy is deteriorating fast. German retail sales fell 0.6% month-on-month, missing the 0.3% consensus and extending a two-month decline. French consumer spending collapsed 1.4% — nearly five times worse than the −0.3% consensus — the largest single-month drop in over a year. Spanish retail sales growth halved to 2.2% from 3.8%, missing badly. The picture is consistent: inflation is rising but consumers are retrenching before the full energy pass-through has even hit.
German unemployment was flat at 6.3%, beating the +2K consensus for new claims. Italian PPI stayed deeply deflationary at −2.7% year-on-year, while Italian industrial sales fell 1.0% annually — a sharp reversal from January’s 3.5% growth. The UK economy grew 0.1% in Q4, exactly as expected, while the current account deficit narrowed to £18.4 billion, beating the £24 billion consensus significantly. The Nationwide House Price Index surged 0.9% month-on-month, far above the 0.0% consensus.
The German 2-year Schatz auction cleared at 2.62%, up from 2.27%, reflecting the repricing of short-end European rates. French BTF auctions across 3-month, 6-month, and 12-month tenors all cleared marginally higher. Spanish business confidence deteriorated to −4.2 from −2.7, while Portuguese consumer confidence plunged further to −18.7 from −15.3.
Verdict
The CPI undershoot is genuine relief — core at 2.3% gives the ECB breathing room. But the consumer data is alarming: French spending down 1.4%, German retail down 0.6%, Spanish retail halving. This is textbook stagflation — prices rising while demand collapses. The ECB’s job just got harder, not easier.
United States
Best Day Since May on Peace Hopes, but March Ends as Worst Month Since 2022
The peace rally was the defining event. An unconfirmed report that Iranian President Pezeshkian is open to ending the war triggered a surge that saw the Dow gain 1,125 points (+2.49%), the S&P 500 jump 2.91% to 6,528.52, and the Nasdaq leap 3.83% to 21,590.63. It was the best single session for all three indexes since May. Nvidia rallied 5.6%, Caterpillar surged 6%, and Boeing jumped 5.2%. The VIX collapsed 17.5% to 25.25.
The consumer data contradicted Friday’s Michigan collapse. The Conference Board’s Consumer Confidence index beat at 91.8 versus 87.8 consensus, holding near February’s 91.0. The divergence between Michigan (53.3, plunging) and Conference Board (91.8, stable) reflects their different methodologies — Michigan captures inflation sentiment more directly, while the Conference Board weights labor market perceptions. JOLTS job openings fell to 6.882 million from 7.240 million, essentially in line with the 6.890M consensus, signaling continued cooling in labor demand.
The Chicago PMI slid to 52.8 from 57.7, missing the 54.8 consensus but remaining in expansion territory. The Texas Services Sector Outlook plunged to −13.3 from −3.2, the worst reading in months and consistent with the Dallas Manufacturing index’s slip into contraction. Case-Shiller home prices decelerated to 1.2% year-on-year growth from 1.4%, another sign that housing is normalizing under higher mortgage rates.
The API crude inventory report was the after-hours bombshell: a 10.263 million barrel build against consensus for a 1.3 million draw. This is the largest single-week build in months and screams demand destruction — refiners are not pulling crude because downstream demand is weakening under $4+ gasoline. Combined with the Baker Hughes rig drop to 409, the US energy complex is signaling that $100 oil is already damaging the real economy. Credit spreads widened to their highest since May, with high-yield reaching 3.31%.
Verdict
The rally is powerful but the fundamentals are deteriorating underneath. The API’s 10.3 million barrel build is the loudest demand-destruction signal of the war. Conference Board resilience buys time, but JOLTS cooling and Texas services collapsing point to a labor market that’s starting to crack. March ended down 5.3% — the worst month since 2022. The April 6 deadline and Friday’s payrolls report define the week ahead.
Asia-Pacific
Tankan Beats Across the Board, Korea Exports Surge, Caixin Slows
Japan’s Tankan survey was the standout Asian release, beating consensus across every major category. Large manufacturers came in at 17 versus 16 expected, large non-manufacturers hit 36 versus 33 — the highest reading in the series’ recent history. Even small manufacturers improved to 7 from 6. The outlook index held at 14, above the 13 consensus. However, all-industry capex expectations collapsed from 12.6% to 3.3%, and small-industry capex plunged to −8.1%, signaling that corporate optimism is not translating into investment commitments.
Korea’s March exports surged 48.3% year-on-year, crushing the 44.9% consensus and more than doubling February’s 28.7% pace. The trade surplus expanded to $25.74 billion from $15.38 billion. Imports rose a more modest 13.2%, below the 18.0% expected. Korea’s manufacturing PMI also improved to 52.6 from 51.1. The data provides a dramatic counterpoint to February’s −2.2% industrial production collapse, suggesting the base-effect distortion was temporary rather than structural.
China’s Caixin manufacturing PMI slowed to 50.8 from 52.1, missing the 51.6 consensus. This contrasts with Monday’s official PMI beat at 50.4, and the divergence reflects the Caixin survey’s greater exposure to smaller, export-oriented firms that are more vulnerable to the Hormuz disruption and trade-probe uncertainty. Japan’s industrial production fell 2.1% month-on-month as expected, but the forward-looking production forecasts are bullish: +3.8% for March and +3.3% for April.
Australia delivered a blowout building approvals print at +29.7% month-on-month, five times the 5.8% consensus and a massive swing from February’s −7.2%. However, Australian manufacturing PMI slipped to 49.8 from 51.0, and the AIG construction and manufacturing indexes plunged deeper into contraction at −31.4 and −27.9 respectively, painting a contradictory picture of the housing pipeline versus actual construction activity.
Verdict
The Tankan beat and Korean export surge challenge the Asia-is-cracking narrative from last week. Japan’s corporate sector entered the war strong; the question is whether Q2 Tankan will reveal the damage. The Caixin miss versus official PMI beat creates a two-speed China: SOEs stabilizing while private exporters weaken. Korea’s export rebound is the most constructive Asian trade signal of the month.
Latin America & Africa
Colombia Hikes 100bp, Brazil Fiscal Deteriorates, Chile Copper Drops
Colombia’s central bank delivered the expected 100bp rate hike to 11.25%, the most aggressive single move in LatAm this month and a direct response to the oil-driven inflation pass-through. The hike — from 10.25% — contrasts starkly with Banxico’s surprise cut last week, creating the widest LatAm monetary policy divergence of the cycle. Colombia’s labor market can absorb the tightening: February unemployment fell to 9.2% from 10.9%, as noted in our March 28 briefing.
Brazil’s fiscal picture darkened. Gross debt-to-GDP rose to 79.2% from 78.7%, while the primary budget swung to a deficit of −R$100.6 billion from a R$40 billion surplus. Net debt-to-GDP hit 65.5%. The CAGED net payroll jobs report showed 255,320 new formal jobs, below the 270,000 consensus but still healthy. Brazilian PPI deflated 0.25% month-on-month, providing a counterpoint to the IGP-M swing — wholesale prices are cooling even as the broader index turns positive on energy.
Chile’s copper production decline deepened to −4.8% year-on-year from −3.0%, a concerning signal for the world’s largest copper producer as mine output struggles against grade declines and operational challenges. Chilean retail sales were the bright spot at 5.4% year-on-year, up from 3.6%, while manufacturing production improved to −3.0% from −3.8% — still in contraction but narrowing. South Africa posted a ZAR 36.92 billion trade surplus, a dramatic improvement from ZAR 8.50 billion.
The LatAm monetary policy spectrum now spans from Banxico cutting at 6.75% to Colombia hiking at 11.25%, with Brazil’s BCB at 14.75% debating whether to continue easing. The April 6 deadline defines the macro calendar: if the war ends, oil collapses and the entire LatAm easing narrative revives. If it doesn’t, Colombia’s 100bp hike may prove to be the template, not the outlier.
Verdict
Colombia’s 100bp hike is the hawkish benchmark for LatAm. Brazil’s fiscal deterioration — debt-to-GDP at 79.2% and a R$100B deficit swing — is the region’s biggest medium-term vulnerability. Chile’s deepening copper output decline is a structural concern that transcends the war. The policy divergence between Banxico (cutting) and Colombia (hiking) tells the story of a region caught between growth fears and inflation reality.
Trades & Tilts
→ Fade the peace rally above S&P 6,500 — every ceasefire-hope rally this month has reversed within 48 hours; the API’s 10.3M barrel build and Texas services collapse at −13.3 signal the real economy is deteriorating faster than equities reflect
→ Buy eurozone core duration on the CPI undershoot — core at 2.3% versus 2.4% expected gives the ECB room to hold; the Schatz at 2.62% overprices tightening risk; buy 2-year German bonds
→ Long Korean exporters into the trade surplus — exports at +48.3% with a $25.7B surplus demolish last week’s industrial production collapse narrative; the semiconductor cycle may be bottoming
→ Short COP on Colombia’s 100bp hike — the aggressive tightening will compress economic activity; the peso may initially strengthen but the real economy impact argues for a medium-term short via USD/COP
→ Watch Friday’s nonfarm payrolls as the binary event — another miss after February’s 92K decline would confirm recession fears and trigger a vol spike; position long VIX into the report via April puts
Previously: Global Economy Briefing — March 31, 2026 · Sources: Trading Economics · CNBC Markets · Schwab · The Rio Times