No Hopeful Signs & More Evidence of the War’s Economic Impact – Currency Thoughts
Middle East Holding Spotlight: No Hopeful Signs & More Evidence of the War’s Economic Impact
April 23, 2026
Nothing encouraging has surfaced regarding a resumption of peace talks between the United States and Iran. Shipping traffic through the Strait of Hormuz remains stalled, and there have been more ship seizure incidents by both sides.
Preliminary findings from April purchasing manager surveys and other data out today point to a big blow to business and consumer confidence. Front-loading sustained manufacturing. Across countries, the economic impact was not distributed uniformly.
Aided by the roll-out of some first quarter corporate earnings, global financial markets had performed better on Wednesday than one might have presumed, but Thursday has been a more difficult session.
- Share prices in the Pacific Rim closed with losses of 2.2% in Indonesia, 1.2% in Singapore, 1.1% in India, 1.0% in Hong Kong, 0.8% in Japan, 0.6% in Australia, 0.5% in New Zealand, 0.4% in Taiwan and 0.3% in China but a 0.9% further rebound in South Korea. European stock exchanges are sporting moderate losses for the most part. U.S. stock futures had been lower but now are pretty flat.
- The dollar is narrowly mixed, with marginal dips versus sterling, the Swiss franc and Canadian dollar. The yen, won and Turkish lira show no net movement. The dollar is up 0.3% relative to the kiwi and 09.2% versus the Mexican peso. The rupiah touched a new record low of 17,323 per dollar. The euro is currently up 0.1% higher, having earlier visited a 2-week low of $1.1679.
- Ten-year sovereign debt yields have risen four basis points in Australia, three basis points in the U.K., two bps in Japan and a basis point each in Switzerland and Italy, but comparable yields are steady in the United States, Germany and Italy.
- Fading hope that shipping traffic might resume soon through the Strait of Hormuz had lifted the price of WTI oil to nearly $96 around four hours ago, but such has retreated to $92.5o currently and shows a net loss of 0.4%.
- The price of silver and of gold are 1.1% and 0.7% higher than yesterday’s closing levels. Bitcoin is 0.5% softer.
There’s been a 25-basis point central bank interest rate hike in the Philippines, its first increase since a similarly-sized move in October 2023 that lifted the rate then to cyclical high of 6.5% where it stayed until easing commenced in August 2024. Cuts totaling 75 basis points in the second half of 2024, 125 bps during 2025 and 25 bps two months ago had lowered the rate to 4.25%, and today’s move reverses that final cut. Even at the new 4.50% level, the Central Bank of the Philippines‘ interest rate is just barely above last month’s on-year consumer price inflation reading of 4.1% and over a percentage point above the 3.0% inflation target. Due to the spike in global energy and fertilizer prices according to a released statement,
Average headline inflation is seen to breach the 4.0-percent tolerance ceiling in both 2026 and 2027. Inflation expectations have also risen further. The policy rate increase is intended to anchor inflation expectations and contain the buildup of second-round effects. A measured increase in the policy rate will still accommodate economic recovery over the medium term.
However the Middle East war evolves militarily from here, a red line appears likely to be crossed soon if not already were central banks will be either putting interest rate cutting on indefinite hold or following the Filipino example and reversing course.
Euroland’s composite purchasing managers index slumped to a 19-month low of 48.6 this month from 50.7 in in March. It did so in spite of a 47-month high in the reading for the manufacturing sector, which reflecting front-loaded buying of needed supplies. At 47.4, a much lower-than-anticipated services PMI for April reflected significant deterioration in both business and consumer confidence and the spike in input price inflation to a multi-year high.
Within the euro area, the composite PMIs of Germany (a 16-month low of 48.3) and France (a 6-month low of 47.6) defined deeper-than-presumed activity contractions, wherein PMI readings north of 50 implying improving conditions and vice versa.
India’s preliminary composite, manufacturing and service sector PMIs of 58.3, 55.9 and 57.9 each represent 2-month highs and better-than-expected results. Japan’s composite PMI of 52.4 was at a 4-month low but not as down as analysts were predicting. Likewise Australia’s 2-month high composite PMI of 50.1 also beat market expectations after a reading of 46.6 in the prior month.
In Britain‘s case, the composite PMI also rose unexpectedly to a 2-month high of 52.0, but that lift in activity was counterbalanced by a huge rise in inflation subcomponents and a sharp deterioration in the forward-looking business outlook. There was other sour economic data in the Confederation of British Industry’s industrial trends survey. The orders subindex sank 11 points to a 6-month low. Moreover, the past quarter index of manufacturers’ sentiment tumbled to a 58-month low.
In France, INSEE’s latest measures of business confidence deteriorated sharply in April to 94.0, the worst result since the pandemic of 2020 and six whole points below 100 which is set to align with the data’s long-term average. The biggest hits were felt in services (a 39-month low) and retail and trade (a 21-month low).
South Korea reported its weakest consumer confidence in a year. April’s reading of 99.2 was down from 107 in March. Ironically, South Korea simultaneously revealed a sharper-than-expected revival of economic growth last quarter when GDP surged 1.7% versus on quarter. The year-on-year pace of 3.6% was the most in 17 quarters.
British consumer confidence weakened to a 30-month low in March.
Slovenian consumer sentiment dropped ten index points to a 30-month low in August.
Consumer price inflation in Singapore accelerated to an 18-month high of 1.8% in March from 1.2% in February. In Hong Kong last month, consumer price inflation matched February’s 9-month high of 1.7%. Latvian producer price inflation swung from -0.8% in February to a 2-month high of +0.8% in March.
The Chicago Fed National Activity Index printed at a 4-month low in March. U.S. new jobless insurance claims last week increased by 6k to a still-contained 214k.
Just in: The U.S. composite PMI easily surpassed expectations, rising 1.7 index points in April to a 3-month high. Manufacturing soared to a 47-month high of 54.0, while services moved back above 50 to a 2-month high of 51.3.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: British consumer confidence, Central Bank of The Philippines, French business confidence, preliminary PMIs
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