Macro Wrap

FOMC Reviews: The Fed kept the Fed Funds Rate (FFR) unchanged at 3.50-3.75% as expected. Four (out of 12) dissenting votes were noted, turning the overall vote hawkish, However, within the Federal Open Market Committee, resistance has grown to signalling the possibility of further rate cuts. In addition, Jerome Powell dropped a bombshell at his final press conference as Fed Chair: Although Kevin Warsh will take over as Chair in May as he won the backing of the Senate Banking Committee in a 13-11 vote, putting him on track to be confirmed by the full Senate as the next Fed Chair by May 15, but Powell will continue to serve as a regular governor for an indefinite period to defend the Fed’s independence against the government’s legal attacks. Negative for broader markets.

UST yields rose across the curve by 8-11bp, Two-year Treasury yields jumped 11 basis points, the biggest Fed-day move since 2022. The Dollar Index edged higher, while Brent crude oil prices rose over 6% to their highest level since June 2022. Negative for Gold

Global Energy markets remained the dominant driver of sentiment as oil futures surged on prospects of a prolonged US-Iran standoff. Brent crude rose above USD119 intraday before settling around USD118 a barrel, the highest level since the Iran war began two months ago. President Trump told Axios he will not lift the naval blockade of Iran’s ports until he secures a nuclear deal.
Global macro-Data

China’s official manufacturing PMI came in at 50.3% in April, down 0.1ppt from March but remaining in expansion for a second straight month, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The reading signals overall stable manufacturing activity and continued solid operating conditions.

China’s RatingDog general manufacturing PMI rose to 52.2 in April, the highest since 2021, signaling solid expansion in both production and demand, growth was driven by stronger new orders — including sustained expansion in export orders — alongside rising prices, which supported output and inventory rebuilding. Firms increased purchasing for a fourth straight month, with input inventories rising for five consecutive months. Rising input costs — driven by higher raw material and oil prices — pushed output prices higher at the fastest pace in over four years, with cost pressures increasingly passed on to customers.

US March advance goods trade deficit came in at USD87.9bn (Bloomberg consensus: USD88.0bn) vs USD83.5bn previously. US durable goods orders rose 0.8% in March 2026 to $318.9 billion, beating the 0.5% forecast and rebounding from a 1.2% drop. Despite war-related energy and shipping disruptions, orders gained across computers and electronics (3.7%), machinery, primary metals, electrical equipment, and transportation.

Germany’s CPI rose to 2.9% YoY in April 2026, up from 2.7% and just below the 3% forecast, driven by a 10.1% jump in energy. Core inflation fell to 2.3%, the lowest since June 2021, and the EU-harmonized rate also hit 2.9%, above the ECB’s 2% target. Negative for Industrial commodities and Euro
The DJIA fell 0.6%, while the S&P 500 and the Nasdaq Composite Index were flat yesterday. The Eurostoxx 50 declined 0.3%. The Dollar Index rose 0.3% to 98.96. EUR-USD fell 40 pips to around 1.1680. The US 2Y yield rose 11bp to 3.95% and the 10Y yield climbed 8bp to 4.43%. The German 10Y yield rose 4bp to 3.11%. The UK 10Y yield advanced 7bp to 5.07%. Brent crude oil prices surged 6.1% to settle at USD118.03 a barrel as concerns grew over a protracted standoff. Gold fell 1% to USD4,550.

Data watch: Today we have the advance estimate of US Q1 GDP, March PCE inflation, initial jobless and continuing claims, personal income, and personal spending. The market consensus for Q1 GDP is at 2.3% qoq annualized vs 0.5% in Q4 2025. The expectations for headline and core PCE inflation are at 3.5% and 3.2% yoy respectively vs 2.8% and 3.0% previously.