Introduction: Stock markets recovering Iran war losses
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
Hopes of a peace deal in the Middle East are pushing markets higher, helping equities to recover their losses since the Iran war began.
The US stock market is closing in on a record high, after the S&P 500 share index recovered all its losses since the conflict began at the end of February.
Markets in Asia – which is particularly vulnerable to the energy shock – are following; MSCI’s broadest index of Asia-Pacific shares outside Japan has gained 1.5% today to reach its highest level in six weeks.
Japan’s Nikkei has almost recovered its losses since the US-Israeli attacks began, while China’s CSI 300 share index has hit a six-week high this morning, touching its highest level since 3 March.
Optimism has seeped back into the markets, after a volatile March, on hopes that talks between Washington DC and Tehran during the current ceasefire might yield a breakthrough.
Tony Sycamore, market analyst at IG, says events in April have culminated in “a spectacular market rally”:
The Nasdaq has now risen for 10 consecutive sessions, marking its longest winning streak since late 2021, while the S&P500 overnight closed more than 10% above its March low of 6316.
While the situation in the Strait of Hormuz remains incredibly tense, markets are, by their very nature, forward-looking. Right now, equities are actively pricing in the end of this geopolitical chapter rather than dwelling on the current stalemate.
Take the nuclear negotiations, for example. Iran appears prepared to halt uranium enrichment for five years, whereas the US is demanding twenty. A compromise somewhere in the middle—perhaps around the ten-year mark—feels realistic and entirely within reach.
Overnight, Donald Trump has said that US-Iranian peace talks could resume in Islamabad over the next two days, and complimented the work of Pakistan’s army chief as mediator.
In the meantime, traffic through the the strait of Hormuz remains disrupted, with the US blockading Iraniain ports.
The US dollar is lingering near six-week lows today, having recently lost nearly all the gains it had made since the Iran war erupted.
The agenda
-
Noon BST: US weekly mortgage applications data
-
12.30pm BST: US treasury secretary Scott Bessent speaking at CNBC conference:
-
1.30pm BST: NY Empire State Manufacturing Index
-
2pm BST: IMF to release its fiscal monitor
-
2.30pm BST: UK chancellor Rachel Reeves speaking at CNBC conference
-
3.15pm BST: IMF press conference on the fiscal monitor
Key events
Rogoff warns markets are ‘naive’ if they think it’s ‘mission accomplished’ in Iran
The financial markets are being ‘naive’ if they think the Middle East conflict is resolved, Harvard University professor Kenneth Rogoff has suggested.
Rogoff says it’s ‘puzzling’ that the markets are taking a ‘no problem’ approach to the war, with US stocks near record highs amid hopes that US-Iranian peace talks could resume in Islamabad later this week.
Speaking to Bloomberg TV, Rogoff says:
I think it’s naive to think it’s mission accomplished. I think it’s a temporary respite.
The Iranian regime is still in place, Frankly the US regime is still in place, and I think more things will happen.
But…the markets have just decided it doesn’t matter, everything’s going to be fine. I think it’s a little naive.
Rogoff warns that the war is already a “big stagflationary shock”, on top of the impact of Donald Trump’s tariffs which is still working its way through the system.
Over the medium term, this pushes interest rates up, not down, he explains.
After climbing most days since the Iran war started, UK mortgage rates may have reached a plateau.
The average 2-year fixed residential mortgage rate today is 5.89%, unchanged from Tuesday, data from Moneyfacts shows.
The average 5-year fixed residential mortgage rate today is 5.77%, which is also unchanged.
Norway’s crude exports hit record high
Record-high export revenues from crude oil have pushed Norway’s trade surplus to its highest level since January 2023.
Statistics Norway has reported that the country’s export revenues rose to NOK 199.9bn (£15.6bn) in March 2026.
That includes exports of crude oil worth NOK 57.4bn (£4.5bn), an increase of 67.9% compared to the same month the previous year, due to increased prices and volumes.
Statistics Norway senior advisor Jan Olav Rørhus says:
The closure of the Strait of Hormuz has caused a significant supply shock in the oil market, which contributed to the high oil prices in March, and thus the highest export value ever.
Rørhus also flagged that “very high mainland exports and large gas revenues” also boosted Norway’s exports.
The trade surplus came in at NOK 97.5bn in March 2026.
BBG: Bessent and Reeves at odds over Iran war ahead of meeting
Bloomberg are predicting a ‘tense meeting’ between Scott Bessent and Rachel Reeves at the IMF later today, reporting:
“I wonder what the hit to global GDP would be if a nuclear weapon hit London,” Bessent said to the BBC. “I am less concerned about short-term forecasts, for long-term security.”
The relationship between the two countries looks increasingly fraught. On Tuesday, Reeves used her strongest language yet to criticize Donald Trump’s war in the Middle East and the damage it has wreaked on the global economy.
“I do feel very frustrated and angry that the US went into this war without a clear exit plan, without a clear idea of what they were trying to achieve. And as a result the Strait of Hormuz is now blocked,” Reeves told the Mirror newspaper.
French inflation higher than first thought after Iran war
Inflation in France rose faster than initially thought in the first month of the Iran war.
Consumer prices in the eurozone’s second-largest member rose by 2% year-on-year in March, on an EU-harmonised basis, up from the first estimate of 1.9%.
Statistics body Insee reports that energy prices rose sharply; they rose by 7.4% year-on-year in March, up from ‑2.9% in February, adding:
The high inflation of petroleum products (+18.1% after ‑2.2%) was mostly due to the one of diesel (+23.5% after ‑1.4%), petrol (+9.9% after ‑3.8%) and liquid fuel (+40.9% after ‑0.4%).
Britain’s stock market has opened a little higher, with the FTSE 100 share index up 28 points or 0.27% at 10,636 points.
That’s still about 2.5%, or 274 points, below its closing level just before the Iran war began.
Barratt Redrow cuts land buying as geopolitics pushes up costs and mortgage rates
Britain’s largest housebuilder is cutting back on its land purchases, after the Iran war drove up mortgage rates.
Barratt Redrow has told the City it is being more selective when buying land to build homes on, due to “recent geopolitical events” and their likely impact on mortgage rates and build cost inflation.
The company now expects to spend between £700m and £800m on new land this financial year, down from previous guidance of £800m-£900m .
That will buy between 7,000 and 9,000 plots, below its previous guidance range of between 10,000 and 12,000 plots.
Barratt Redrow also warns that higher energy costs are likely to push up the cost of building materials.
The US stock market’s recovery over the last 10 trading sessions is the fastest since early in the Covid-19 pandemic, reports Jim Reid, market strategist at Deutsche Bank.
He says:
Hopes for a de-escalation between the US and Iran have continued to propel markets higher this morning, with Trump saying overnight that “I think it’s close to over.”
So oil prices have remained steady, with Brent crude at $95.26/bbl, and the surge for risk assets has continued. Indeed, yesterday saw the S&P 500 (+1.18%) close just shy of its record high, meaning that the index is now up +9.8% over the last 10 sessions. For reference, that’s now even faster than the bounceback after Liberation Day last year, and we haven’t seen a run of gains that quick over 10 sessions since the post-Covid bounceback in April 2020.
Scott Bessent has also claimed the US economy could have a strong year, despite the hit from the Middle East conflict.
Bessent said the underlying US economy remains strong and that growth could still exceed 3% or 3.5% this year despite the impact of the US-Israel war on Iran.
That followed yesterday’s news that the International Monetary Fund (IMF) has cut its growth forecasts for 2026 based on the impact of the war and said any further escalation in the conflict could trigger a global recession. Bessent however cast cuts in global growth forecasts and higher inflation projections by the IMF and World Bank as an overreaction.
That’s from our main Middle East liveblog:
Reeves and Bessent to meet at IMF
UK chancellor Rachel Reeves is set to meet her US counterpart, Scott Bessent, in Washington DC today at the spring meeting of the International Monetary Fund and the World Bank.
The impact of the Iran war will surely be high on the agenda – an issue where the two finance ministers may not see eye to eye.
Overnight, Bessent has told the BBC a “small bit of economic pain” is worthwhile for long-term international security.
Reeves, reeling from seeing the UK’s growth forecasts downgraded yesterday, may not agree. She has already spoken of her anger and frustration at the “folly” of America’s actions in the Middle East and its financial impact it is having on UK families and businesses.
Introduction: Stock markets recovering Iran war losses
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
Hopes of a peace deal in the Middle East are pushing markets higher, helping equities to recover their losses since the Iran war began.
The US stock market is closing in on a record high, after the S&P 500 share index recovered all its losses since the conflict began at the end of February.
Markets in Asia – which is particularly vulnerable to the energy shock – are following; MSCI’s broadest index of Asia-Pacific shares outside Japan has gained 1.5% today to reach its highest level in six weeks.
Japan’s Nikkei has almost recovered its losses since the US-Israeli attacks began, while China’s CSI 300 share index has hit a six-week high this morning, touching its highest level since 3 March.
Optimism has seeped back into the markets, after a volatile March, on hopes that talks between Washington DC and Tehran during the current ceasefire might yield a breakthrough.
Tony Sycamore, market analyst at IG, says events in April have culminated in “a spectacular market rally”:
The Nasdaq has now risen for 10 consecutive sessions, marking its longest winning streak since late 2021, while the S&P500 overnight closed more than 10% above its March low of 6316.
While the situation in the Strait of Hormuz remains incredibly tense, markets are, by their very nature, forward-looking. Right now, equities are actively pricing in the end of this geopolitical chapter rather than dwelling on the current stalemate.
Take the nuclear negotiations, for example. Iran appears prepared to halt uranium enrichment for five years, whereas the US is demanding twenty. A compromise somewhere in the middle—perhaps around the ten-year mark—feels realistic and entirely within reach.
Overnight, Donald Trump has said that US-Iranian peace talks could resume in Islamabad over the next two days, and complimented the work of Pakistan’s army chief as mediator.
In the meantime, traffic through the the strait of Hormuz remains disrupted, with the US blockading Iraniain ports.
The US dollar is lingering near six-week lows today, having recently lost nearly all the gains it had made since the Iran war erupted.
The agenda
-
Noon BST: US weekly mortgage applications data
-
12.30pm BST: US treasury secretary Scott Bessent speaking at CNBC conference:
-
1.30pm BST: NY Empire State Manufacturing Index
-
2pm BST: IMF to release its fiscal monitor
-
2.30pm BST: UK chancellor Rachel Reeves speaking at CNBC conference
-
3.15pm BST: IMF press conference on the fiscal monitor
