Market Summary - April 3, 2026
Market Context
As we approach the long Easter weekend, trading activity is expected to slow down significantly today and on Monday, with the exception of the U.S. markets. A key point of interest will be the release of the March Non-Farm Payroll (NFP) data from the U.S. economy at 2:30 p.m., which may introduce volatility into the market.
Global Economic Indicators
China
The Caixin Services PMI for March reported a decline to 52.1, down from February's 56.7, indicating a slowdown in growth. Despite remaining in expansion territory for over three years, the sector is facing challenges such as contracting export orders, declining employment, and companies reducing prices due to weak pricing power. The composite PMI also showed a slowdown but remains above the 50-point threshold.
Japan
Japan's services PMI (S&P Global) for March decreased slightly to 53.4 from February's 53.8. Although the sector has been in expansion for 12 consecutive months, the growth rate of new orders has slowed, and rising energy costs due to the ongoing conflict in the Middle East are raising concerns. Business confidence has also dropped to its lowest level since the pandemic.
Geopolitical Tensions
Former President Trump has issued threats against Iran, promising to destroy infrastructure if Iran does not comply with ceasefire terms, including the opening of the Strait of Hormuz. Iran has responded with threats of "devastating attacks" on American targets. The ongoing conflict, which involves the U.S. and Israel, raises legal concerns regarding the potential for war crimes due to the destruction of civilian infrastructure.
Iran has indicated a willingness to negotiate with European and Asian countries regarding oil trade through the Strait of Hormuz, excluding the U.S. and Israel. Additionally, Iran claims to have shot down a U.S. F-35 fighter jet over its territory.
Market Movements
Oil prices have surged, with WTI rising 12% to $112.06 per barrel and Brent increasing by 8% to $109.24 per barrel. This spike in oil prices is attributed to the geopolitical tensions in the Middle East.
In Asian markets, Japan and South Korea have shown strong performance, with gains of 1.25% and 2.77%, respectively. In the Forex market, the Swiss franc, British pound, and U.S. dollar are performing well, while the Australian and New Zealand dollars, along with the euro, have seen declines.