This global economy briefing covers Wednesday, April 1 — a session that began with ceasefire optimism and ended with a presidential address that rattled risk assets worldwide. Trump told the nation that U.S. military action in Iran is “nearing completion,” then immediately promised two to three more weeks of “extremely hard” strikes. Oil jumped nearly 4% post-speech. The S&P 500 had closed up 0.72% during the day; futures reversed sharply after 9 p.m. ET. Meanwhile, Liberation Day turned one year old, ISM manufacturing prices surged to 78.3 — the highest print in months — and the Fed funds rate market now prices zero cuts for the rest of 2026. For yesterday’s coverage of the Dow’s 1,125-point surge, see the previous global economy briefing.
The Big Three
Trump’s prime-time Iran address killed the two-day ceasefire rally. The president vowed to “hit them extremely hard” for 2–3 more weeks and threatened to strike every power plant if no deal materializes. S&P futures dropped 0.7%, oil jumped ~4% after-hours, and the 10-year yield rose to 4.37%.
ISM manufacturing prices exploded to 78.3 (consensus 74.0, prior 70.5) — the clearest evidence yet that the Hormuz crisis and energy shock are feeding through to input costs. The headline PMI beat at 52.7 but the prices sub-index dominated the narrative.
Liberation Day turned one — and the Supreme Court’s February ruling vacating Trump’s IEEPA tariffs has triggered a $170 billion refund process. The administration replaced them with a temporary 10% global tariff under the Trade Act of 1974 (150-day limit). U.S. manufacturing lost ~100,000 jobs in the year since.
Dashboard: Key Prints vs Expectations
| Indicator | Actual | Expected | Prior | Verdict |
| US ISM Mfg PMI (Mar) | 52.7 | 52.3 | 52.4 | ▲ Beat |
| US ISM Mfg Prices (Mar) | 78.3 | 74.0 | 70.5 | ▲ Hot |
| US ISM Mfg New Orders (Mar) | 53.5 | 54.5 | 55.8 | ▼ Miss |
| US ISM Mfg Employment (Mar) | 48.7 | 49.0 | 48.8 | ▼ Miss |
| US ADP Nonfarm (Mar) | 62K | 41K | 66K | ▲ Beat |
| US Retail Sales MoM (Feb) | 0.6% | 0.5% | -0.1% | ▲ Beat |
| EZ Mfg PMI Final (Mar) | 51.6 | 51.4 | 50.8 | ▲ Beat |
| German Mfg PMI Final (Mar) | 52.2 | 51.7 | 50.9 | ▲ Beat |
| Spanish Mfg PMI (Mar) | 48.7 | 50.5 | 50.0 | ▼ Miss |
| UK Mfg PMI Final (Mar) | 51.0 | 51.4 | 51.7 | ▼ Miss |
| EZ Unemployment (Feb) | 6.2% | 6.1% | 6.1% | ▼ Miss |
| Brazil Mfg PMI (Mar) | 49.0 | — | 47.3 | ▲ Improving |
| EIA Crude Inventories | +5.45M | +1.80M | +6.93M | ▼ Bearish |
| Chile Economic Activity YoY (Feb) | -0.3% | 1.9% | -0.5% | ▼ Miss |
| Peru CPI MoM (Mar) | 2.38% | — | 0.69% | ▲ Hot |
Europe
Eurozone final manufacturing PMI was revised up to 51.6 from the 51.4 flash, confirming the bloc’s strongest factory expansion since before the energy crisis. Germany led the charge at 52.2 — its third consecutive month in expansionary territory and a beat against the 51.7 consensus. Italy also surprised at 51.3 versus the 50.9 expected, while France was in line at 50.0.
Spain was the outlier, slipping to 48.7 against a 50.5 consensus and falling back into contraction. The UK also softened, with its final manufacturing PMI printing 51.0 versus 51.4 expected — still expanding, but momentum is clearly fading from 51.7 in February. The BoE Financial Policy Committee released its meeting minutes during the session.
Eurozone unemployment ticked up to 6.2% in February, above the 6.1% consensus and the prior reading. Italy’s monthly unemployment also disappointed at 5.3% versus 5.2% expected. The labor market is showing the first cracks from the energy-inflation squeeze, though levels remain historically low by European standards. European car registrations surged 11.7% YoY in March, with MoM growth of 34.3%.
The STOXX 600 jumped more than 2% in a broad-based rally, powered by ceasefire optimism during the European session. Basic materials and financials led. The rally pre-dates Trump’s evening speech, meaning Thursday’s European open will price in the hawkish address. South Korea’s Kospi surged 8.44% in Asia — its best day since March 5 — while the Nikkei gained 5.24%.
Verdict
Eurozone factory momentum is real — three consecutive months above 50 with Germany pulling the bloc higher. But the Spanish miss and rising unemployment show the recovery is uneven. Thursday’s open will be ugly as markets digest Trump’s escalation overnight.
United States
The S&P 500 rose 0.72% to 6,575.32, the Nasdaq gained 1.16% to 21,840.95, and the Dow added 224 points (+0.48%) to 46,565.74. Nine of eleven sectors finished green during the regular session, led by industrials (+1.9%) and communication services (+1.8%). Energy was the notable laggard at -3.7% as earlier ceasefire hopes had pulled crude lower. After-hours, the picture reversed: S&P futures dropped 0.7% and Dow futures fell 260+ points following Trump’s address.
ISM manufacturing PMI beat at 52.7 (consensus 52.3), marking continued expansion in the factory sector. But the sub-indexes told a split story. New orders decelerated to 53.5 from 55.8 (missing the 54.5 consensus) and employment remained contractionary at 48.7 (missing 49.0). The prices-paid component was the alarm bell: 78.3 versus the 74.0 consensus and 70.5 prior, the biggest overshoot in months, directly reflecting energy and supply-chain cost pressures from the Hormuz closure.
ADP private payrolls added 62,000 jobs in March, well above the 41,000 consensus, suggesting labor demand remains intact despite geopolitical headwinds. Retail sales rose 0.6% MoM in February (consensus 0.5%), with core retail sales gaining 0.5% (consensus 0.3%). The consumer remains alive — for now. The Atlanta Fed GDPNow slipped to 1.9% from 2.0%. Business inventories fell 0.1% in January (consensus flat).
The 10-year Treasury yield fell to 4.28% during the session on ceasefire hopes before reversing to 4.37% post-speech. Markets now price zero Fed rate cuts for the rest of 2026, even though the March dot plot still shows one. MBA mortgage rates rose to 6.57% from 6.43%, with applications falling 10.4%. Brent settled near $102 but jumped ~4% after-hours. Gold surged to $4,720/oz (+$142). Trump’s speech was the market event — everything before it is now stale.
Verdict
The ISM prices print at 78.3 is the number that matters. It confirms that the Hormuz shock is transmitting to domestic input costs at an alarming rate. Combined with the post-speech oil spike, this is a stagflationary signal: activity is holding but inflation is reaccelerating from the supply side. The Fed is trapped.
Asia-Pacific
Asia rallied hard during Wednesday’s session on ceasefire hopes. South Korea’s Kospi surged 8.44% — its largest single-day gain since March 5 — while the Kosdaq climbed 6.06%. Japan’s Nikkei 225 rose 5.24% to 53,739.68, led by financial stocks, and the Topix added 4.95%. Hong Kong’s Hang Seng gained 1.88% and the CSI 300 rose 1.71%. However, after Trump’s evening speech, Thursday’s Asian open saw sharp reversals: Nikkei fell 1.4%, Kospi dropped 2.82%, and the Hang Seng opened 0.5% lower.
Japan’s monetary base contracted 11.6% YoY in March, deeper than the -10.8% consensus and -10.6% prior, reflecting the BoJ’s ongoing balance sheet normalization. The 10-year JGB auction cleared at 2.350%, sharply higher than the 2.122% at the previous sale — a sign that Japanese bond markets are repricing for a world of persistent energy inflation. Foreign investors dumped 4,448.1 billion yen in Japanese stocks and sold 945.4 billion yen in foreign bonds.
South Korea’s CPI came in at 2.2% YoY in March, below the 2.4% consensus, with MoM at 0.3% (consensus 0.6%). This is an encouraging inflation print that gives the Bank of Korea room to cut if growth deteriorates. Australia’s trade surplus blew out to A$5.686 billion in February, massively beating the A$2.810 billion consensus, driven by a 4.9% jump in exports and a 3.2% decline in imports.
Australian commodity prices surged 12.8% YoY, a sharp acceleration from the 4.9% prior — likely reflecting the oil and metals price spike. Iran’s IRGC threatened to attack U.S. tech companies with Middle East operations (including Nvidia, Apple, Microsoft, Google), warning employees to leave workplaces, adding another layer of geopolitical risk for Asia-exposed tech supply chains.
Verdict
Wednesday’s Asia rally is already unwinding. The Kospi’s 8.4% surge was the most violent bear-market bounce since the war began, and Trump’s speech has erased much of it. The JGB auction at 2.35% signals a repricing of Japanese duration risk. South Korea’s soft CPI is the lone bright spot — rate cuts are on the table if growth cracks.
Latin America
Brazil’s manufacturing PMI edged up to 49.0 in March from 47.3 in February — still contractionary, but representing the slowest pace of deterioration since May 2025. Input inflation remains persistent, though the direction of travel is encouraging for an economy operating under 14.75% Selic. Foreign exchange flows turned positive at +$1.596 billion after a -$119 million reading the prior period, continuing the trend highlighted in our latest Ibovespa market report.
The Ibovespa rose 0.3% to 187,953, extending its rally on ceasefire optimism. Banks led gains: Banco do Brasil +2.7%, Santander +2.0%, Bradesco +1.6%. Embraer surged 4.6% to lead industrials. Petrobras fell 4.4% as crude dropped during the daytime session — a move that has now reversed post-speech. The dollar/real fell to approximately R$5.15, the lowest since late February, supported by Brazil’s high carry and R$49.6 billion in Q1 foreign inflows.
Chile posted a shocking -0.3% economic activity reading for February (consensus +1.9%), essentially flat with the -0.5% prior. This is a major miss that raises questions about Chile’s growth trajectory under its new government. Peru’s CPI surged 2.38% MoM in March, massively higher than February’s 0.69%, reflecting the pass-through of elevated food and energy costs from the Hormuz disruption.
Colombia’s February exports grew 11.4% YoY, moderating from 12.6% in January. Mexico’s manufacturing PMI improved to 48.9 from 47.1 — still contractionary but the best reading in months. Canada’s manufacturing PMI printed flat at 50.0 (prior 51.0), and the Bank of Canada released its Summary of Deliberations. Argentina’s tax revenue came in at 16,071 billion pesos, slightly below the prior 16,232 billion.
Verdict
Chile’s activity collapse and Peru’s inflation spike are the warnings. The Hormuz energy shock is reaching Latin American consumers and producers with a lag, and it will intensify if Trump’s speech is right about 2–3 more weeks of escalation. Brazil’s improving PMI and FX flows provide a buffer, but Petrobras becomes the swing factor as oil reprices higher overnight.
Trades & Tilts
Previously: Global Economy Briefing — April 1, 2026 · Sources: Trading Economics · CNBC Markets · CNBC Iran Speech · The Rio Times