1) 📊 Last Week in Review (Week ending 27 March 2026)

Performance snapshot (levels + weekly % + YTD):

  • FTSE 100: 9,923.74 | -0.49% (YTD -7.9%)
  • S&P 500: 6,477.16 | -1.74% (YTD -5.8%)
  • MSCI World: 3,303.40 | -2.10% (YTD -3.2%)
  • UK 10y gilt yield: 4.98% (+14 bp) | US 10y: 4.41% (+9 bp)
  • GBP/USD: 1.3236 (-0.18%) | Brent: $108.01 (+5.66%)

What moved markets (3 bullets max):

  • US labour market shock: February’s NFP print of −92,000 — almost double the consensus miss — reignited recession fears and triggered the S&P 500’s largest single-session drop since the Iran war began, closing at a seven-month low.
  • Oil-driven stagflation narrative: Brent crude holding near $112/bbl (+45% YTD) keeps inflation elevated, trapping the Fed in a dual-mandate bind — wages rising at 3.8% YoY even as jobs are shed.
  • UK gilt yields at 18-year highs: The BoE’s surprise unanimously hawkish hold at 3.75% — reversing four members who voted to cut last month — sent 10-year gilts above 5% mid-week, reflecting the energy shock hitting UK inflation expectations harder than expected.

Sector & style:

  • Best sector: Energy (BP, Shell) — direct beneficiary of $112 Brent
  • Worst sector: Consumer Discretionary — squeezed by high fuel prices and falling confidence
  • Growth vs Value: Value outperformed by an estimated 2–3% as rate-sensitive growth names led the selloff
  • Large vs Small: Large-cap defensive bias dominated; small-caps underperformed meaningfully

So what? :

  • The technical damage is mounting: the S&P 500 has breached its 200-day moving average, and the FTSE 100 is struggling to hold the psychological 10,000 level as the “Rate Cut” dream evaporates.

2) 🌟 The Defining Narrative

Can the “Good Friday” lull provide a floor, or will Friday’s US jobs data confirm a hard landing?

Why it matters

Investors are demanding concrete proof—not just social media posts—that the Strait of Hormuz is reopening. Without this, energy prices act as a permanent brake on global growth while keeping yields at decade highs.

What confirms it / what breaks it (bullets):

  • Confirms: US March Payrolls (Fri) coming in weak (<50k) while Oil remains above $105.
  • Breaks: A verifiable ceasefire or a joint naval intervention to secure energy shipping.

UK investor angle (1–2 bullets):

  • UK investors face a “Gilt Trap”: rising yields are hammering housebuilders and retailers, but the FTSE 100’s heavy weighting in energy provides a structural buffer that the US lacks.

3) 🏦 Central Bank Watch

  • Federal Reserve (Fed):
    • What’s scheduled: Chair Powell Speech (Mon 2:30 PM UK); Goolsbee, Williams, and Barr speeches throughout the week.
    • Market pricing: Money markets now price a 42% chance of a rate hike in 2026, a massive hawkish shift from last month.
    • Key thing to listen for: Powell’s reaction to the “stagflation” label—is the Fed more worried about oil-driven inflation or the cooling labor market?
  • Bank of Japan (BoJ):
    • What’s scheduled: Summary of Opinions (Sun night); Tankan Survey (Tue).
    • Market pricing: Markets are watching for a hawkish “normalization” signal as the Yen hits 160 against the Dollar.

4) 🌍 Macro Calendar

Mon 09:30 | UK | S&P Global Mfg PMI | 50.1 | Signals if UK industry is back in expansion territory.

Mon 13:00 | DE | German Preliminary CPI (YoY) | 2.1% | The primary lead indicator for Eurozone inflation.

Tue 10:00 | EU | Eurozone CPI (Preliminary) | 2.5% | Determines if a June ECB rate cut is a “lock.”

Tue 15:00 | US | JOLTs Job Openings | 8.75M | Measures labor demand and US economic cooling.

Wed 10:00 | EU | Eurozone Unemployment Rate | 6.4% | Gauge of consumer resilience in the Euroblock.

Wed 13:15 | US | ADP Employment Change | 148k | Private-sector “warm up” for Friday’s jobs data.

Wed 15:00 | US | ISM Services PMI | 52.7 | Vital check on the largest part of the US economy.

Thu 09:30 | UK | S&P Global Services PMI | 53.8 | The main driver of UK GDP and wage pressure.

Fri 13:30 | US | Non-Farm Payrolls | 205k | The “make or break” data point for global sentiment.

Fri 13:30 | US | Average Hourly Earnings (YoY) | 4.1% | The Fed’s preferred metric for “sticky” inflation.

5) 📊 Earnings Watch

Nike (NKE) — Tuesday:

  • What matters: China demand recovery and inventory margins.
  • The “tell” headline: A miss on guidance would signal global consumer exhaustion.
  • Read-across: High impact for global retail and luxury names like Burberry (BRBY).

A.G. Barr (BAG.L) — Tuesday:

  • What matters: Margin pressure from input costs (sugar/energy).
  • The “tell” headline: Pricing power—can they pass costs to consumers?
  • Read-across: A bellwether for UK domestic consumer staples.

Shell (SHEL) — Thursday (Update):

  • What matters: Refining margins and Q1 production volumes.
  • The “tell” headline: Upside in buyback capacity due to $100 oil.
  • Read-across: Direct driver for the FTSE 100 heavyweight sector.

6) 💷 Fixed Income & Currency Outlook

A) UK Gilts / Rates

  • Facts: 10y Gilt yield at 4.98%; March has seen a surge of 75 basis points.
  • Watchlist: Nationwide House Prices (Tue); BoE consumer credit data (Mon).
  • Portfolio angle: Duration remains high-risk; the “higher-for-longer” narrative is being reinforced by the energy shock.

B) FX (GBP focus)

  • Facts: GBP/USD at 1.3236; GBP/EUR at 1.1510.
  • Watchlist: US Dollar safe-haven flows as the “Iran Overhang” persists.
  • Portfolio angle: Unhedged US holdings are benefiting from the Dollar’s strength, but Sterling is vulnerable if UK GDP (Tue) shows a wider deficit.

7) 🧠 Sentiment Check

Market gauges:

  • VIX: ~31 — elevated “fear zone” (above 25 = stressed conditions); Dow entered correction territory last week
  • Rates: Real yields rising as inflation expectations ratchet up with oil at $112; curve pricing in hikes, not cuts
  • Credit spreads: Likely widening — consistent with VIX at 31 and recession probability estimates (Goldman Sachs ~30%, Moody’s ~49%)
  • Sentiment indicator: Broadly in “Fear” territory — the S&P 500 is at a seven-month low, posting its worst monthly performance in over three years

Positioning / flows:

  • Institutional desks reducing leverage ahead of Good Friday gap — risk management is the priority over return-seeking this week
  • Gold at $4,524/oz signals extreme safe-haven demand — money flowing into hard assets ahead of a binary weekend

8) 📈 Valuations & Expectations

  • Valuation snapshot:
    • S&P 500 fwd P/E: 22.4x (Rich relative to 4.4% Treasury yields).
    • FTSE 100 fwd P/E: 11.2x (Deeply discounted; currently acting as a global value haven).
  • Earnings expectations:
    • Analysts are beginning to slash Q2 earnings targets for sectors outside of Energy and Defence due to rising input costs.
    • Next-year EPS growth (consensus): US est. +6–8% (at risk of downgrade) | UK est. +5–7% (more resilient given energy sector weight)
    • Revisions trend: Deteriorating for US — stagflation narrative, AI-driven labour disruption (58% of companies planning layoffs), and weak consumer confidence all weigh on forward estimates
    • Beat-rate context: Q1 2026 earnings season not yet formally underway; Nike/McCormick on Tuesday will be early read-across indicators

9) 🗳️ Geopolitics & Wildcards

  • Event: Trump administration Iran deadline
    • Impact channel: Oil supply, shipping (Strait of Hormuz), defence spending, EM risk
    • What to watch: Any escalation language from Washington or Tehran over the Easter weekend; military posturing
    • Most sensitive assets: Brent crude, BP/Shell, BAE Systems, EM FX, global risk appetite
  • Event: NFP Good Friday gap — Friday 3 April at 13:30 BST, markets closed
    • Impact channel: Federal Reserve policy path, USD, Treasuries, global equities
    • What to watch: Whether the number is negative for a second consecutive month (historically a near-certain recession signal)
    • Most sensitive assets: S&P 500 futures (Monday gap), GBP/USD, gold, Treasuries
  • Event: Sustained oil above $110 — ongoing
    • Impact channel: Consumer inflation, central bank policy paralysis, corporate margin pressure
    • What to watch: Any OPEC+ production signal or Iran ceasefire rumour
    • Most sensitive assets: Airlines, consumer discretionary, gilts (inflation premium)
  • Event: DOGE-driven US federal workforce contraction — ongoing
    • Impact channel: Government payrolls drag, consumer confidence, services sector
    • What to watch: Whether Thursday jobless claims data shows continued acceleration in public sector layoffs
    • Most sensitive assets: US consumer-facing equities, US small-caps

10) ⚡ The Bottom Line

  • If US Non-farm Payrolls (Fri) print negative again → then “Recession” replaces “Soft Landing” as the base case → watch the S&P 500 test 6,100.
  • If the BoJ Summary of Opinions (Mon) is hawkish → then the global “carry trade” unwinds further → watch for a tech-heavy sell-off.
  • If the Strait of Hormuz remains closed → then Oil tests $115 and the FTSE 100 likely breaks below 9,800 on stagflation fears.

© Clearly Investments Ltd. Educational information only. This is not investment advice.