Market navigator:
week of 20 April 2026

What happened last week

• Iran talks lift risk appetite: Direct talks between the US and Iran have not resumed but Israel and Lebanon entered a 10-day ceasefire, driving the S&P 500 up over 12% month-to-date to a fresh all-time high of 7,126. Brent crude fell 10% to below $90 a barrel on reopening of the Strait of Hormuz, before rebounding over 6% in weekend contract for difference(CFD) markets after renewed shipping restrictions.
• Wholesale prices ease inflation fears: US producer price index (PPI) for March delivered a downside surprise, with headline PPI rising 0.5% month-on-month (MoM) against a consensus of 1.1%. Energy goods surged 8.5% on war-related supply disruptions, but services prices were flat and core PPI rose 0.2% MoM, suggesting the energy shock has yet to broaden into underlying inflation.
• China GDP beats, but momentum fades: China's economy expanded 5.0% year-on-year (YoY) in Q1 2026, accelerating from 4.5% in Q4 2025. However, March activity softened — retail sales, industrial production and fixed asset investment all slowed, while new home prices fell 3.4% YoY, the steepest decline since May 2025. With exports threatened by the war and domestic momentum fading, recovery prospects face growing risks.
• Australia jobs steady, hike bets rise: Australia's March jobs report showed resilience, with unemployment steady despite a below-consensus payrolls gain of 17,900. Full-time employment remained firm, lifting market pricing for a third consecutive Reserve Bank of Australia (RBA) rate hike in May to 75%. AUD/USD touched 0.7221, its strongest since June 2022, before retreating.

Markets in focus

Markets look past the war

The S&P 500 (+4.5%) and Nasdaq 100 (+6.2%) surged to fresh all-time highs last week, with the latter recording its longest winning streak since 2013 at 13 consecutive sessions. The rally mirrors the V-shaped recovery seen after Liberation Day last April — markets are pricing in a benign resolution to the Iran conflict despite no agreement in place, much as they looked past elevated tariffs to push indices to record highs last year. Retail participation, which had fallen to unusually low levels during the selloff, snapped back to normal within days according to JPMorgan client flow data, suggesting fear of missing out is drawing investors back in on dips.

However, market breadth has not kept pace — around half of US stocks remain below their 200-day moving average, leaving the advance heavily concentrated in technology names. A broadening of participation would be needed to confirm the breakout.

Q1 bank earnings were largely robust. Citigroup was the standout, reporting its best quarterly revenue in a decade at $24.6 billion with net income surging 42% YoY, making it the best-performing major bank stock of the week. JPMorgan and Goldman Sachs also beat estimates on record trading revenue, while Wells Fargo disappointed on both revenue and net interest income. JPMorgan chief Jamie Dimon cautioned of an increasingly complex risk environment amid geopolitical tensions and elevated asset prices.

Following a 17% rally from the 31 March low, the US Tech 100 is trading with strong momentum. Recent price action resembles Wave 5 of the Elliott Wave, where a 161.8% Fibonacci extension could take the index to 27,507. However, with the relative strength index (RSI) at 74 indicating overbought conditions, a pullback is possible. Immediate support lies near 26,200 at the previous peaks.

Figure 1: US Tech 100 index daily price chart

Cautious optimism in Hong Kong

Enthusiasm in the Hang Seng Index (HSI) has been notably more measured than in US markets. The HSI gained 1.0% over the week, led by consumer and technology stocks buoyed by better-than-consensus China Q1 gross domestic product (GDP) growth. Baidu surged 12.2% on higher cloud revenue growth expectations while JD.com rallied 10.0% following analyst upgrades. However, southbound Stock Connect total turnover averaged around HK$100 billion per day — approximately 30% below the daily average recorded when the index reached local highs in late January — suggesting conviction among mainland investors remains limited.

The initial public offering (IPO) pipeline provided additional colour on market appetite. Manycore Tech, the first of Hangzhou's celebrated 'Six Little Dragons' to list — a cohort that includes DeepSeek and robotics firm Unitree — raised HK$1.22 billion and surged 144% on its first trading day, with the Hong Kong public offering oversubscribed 1,591 times. The spatial intelligence software developer, best known for its 3D interior design platform Kujiale, focuses on enabling artificial intelligence (AI) to understand and visualise physical spaces. Its blockbuster debut adds to a string of high-profile Chinese AI listings that have energised Hong Kong's capital markets in 2026.

Technically, the HSI is at a critical juncture as it attempts to break above the resistance level near 26,250. A successful breach would target the next level at 27,200. A failure, however, would signal a lack of technical momentum, likely keeping the index range-bound between 25,500 and 26,250. A potential death cross between the 50-day and 200-day moving average (MA) also warrants close monitoring.

Figure 2: Hang Seng Index daily price chart

Yen caught between intervention rhetoric and policy paralysis

The Japanese yen traded in a relatively narrow range last week, drifting between 157.59 and 159.86 against the US dollar on shifting war-related headlines. Given Japan's heavy reliance on Middle Eastern oil imports, the yen remains acutely sensitive to shifts in ceasefire sentiment.

Verbal intervention from Finance Minister Katayama, who flagged a high sense of urgency over yen weakness and confirmed bilateral foreign exchange (FX) discussions with US Treasury Secretary Bessent at last week's G20 and International Monetary Fund (IMF) meetings in Washington, provided only temporary relief. With no actual intervention executed so far this year, the credibility of verbal warnings is increasingly in question. History suggests currency intervention without complementary monetary policy tightening offers limited lasting impact.

The Bank of Japan (BoJ) delivered a dovish signal at the G20, with Governor Ueda avoiding any hint of an imminent rate hike and acknowledging that supply-driven inflation is difficult to address through monetary policy. Market pricing for an April hike collapsed from around 30% earlier in the week to approximately 15% following his remarks, removing a key pillar of yen support ahead of the 30 April – 1 May policy meeting.

USD/JPY maintains a long-term bullish bias, trading above its 50-day and 200-day moving average (MA) despite recent consolidation. The pair is currently compressed within a symmetrical triangle pattern below the 160.4 resistance ceiling, pointing to likely sideways movement in the near term. A decisive breakout above 160 is required to resume the broader uptrend. Immediate support rests at 157.6 where the 50-day MA currently lies.

Figure 3: USD/JPY daily price chart

The week ahead

The Middle East conflict continues to cast a shadow over global markets. The coming week's data slate will provide a clearer gauge of how ongoing geopolitical turmoil is feeding through to business activity, prices and consumer spending across major economies.

US retail sales for March arrive against a backdrop of consumer sentiment at historic lows amid uncertainty over price pressures stemming from the Middle East conflict. February's 0.6% MoM gain sets a high base; a meaningful pullback would amplify concerns about consumer resilience and rising stagflation risks.

Inflation readings from the UK and Japan will be critical ahead of both central banks' April policy meetings. The Bank of England (BoE) is already under pressure after February's core consumer price index (CPI) came in hotter than expected at 3.2% YoY, challenging its dovish March hold. Any upside surprise would unsettle the current consensus for an April hold. In Japan, Governor Ueda has cautioned that supply-driven inflation is difficult to address through monetary policy alone, with geopolitical tensions compounding already fragile growth concerns.

Flash purchasing managers' index (PMI) readings across Germany, the UK and US on Thursday will provide a timely read on whether the conflict is weighing on April business activity and order books. The UK warrants particular attention, with consensus pointing to a contraction in activity.

On the earnings front, Tesla reports on Wednesday, with investors focused on Robotaxi expansion progress and the Terafab chip joint venture amid declining electric vehicle sales. Lam Research and Intel will provide further signals on artificial intelligence infrastructure spending.

Figure 4: UK inflation vs. employment

Key macro events this week

(All times in GMT+8)

Tuesday 21 April 2026

• 2.00pm — UK unemployment rate (February): previous 5.2%, consensus 5.2%
• 8.30pm — US retail sales MoM (March): previous 0.6%, consensus 1.3%

Wednesday 22 April 2026

• 7.50am — Japan balance of trade (March): previous ¥57.3 billion, consensus ¥1,100 billion
• 2.00pm — UK inflation rate YoY (March): previous 3%, consensus 3.3%

Thursday 23 April 2026

• 3.30pm — Germany S&P Global manufacturing PMI flash (April): previous 52.2, consensus 51.2
• 4.30pm — UK S&P Global manufacturing PMI flash (April): previous 51.0, consensus 49.5
• 4.30pm — UK S&P Global services PMI flash (April): previous 50.5, consensus 49.9
• 4.30pm — US S&P Global manufacturing PMI flash (April): previous 52.3, consensus 52.5
• 4.30pm — US S&P Global services PMI flash (April): previous 49.8, consensus 50.1

Friday 24 April 2026

• 7.30am — Japan core inflation rate YoY (March): previous 1.6%, consensus 1.8%
• 2.00pm — UK retail sales MoM (March): previous -0.4%, consensus 0.2%

Key corporate earnings

(In local exchange time)

Tuesday 21 April 2026

• GE Aerospace
• UnitedHealth

Wednesday 22 April 2026

• Tesla
• Lam Research
• GE Vernova

Thursday 23 April 2026

• Intel
• American Express

Friday 24 April 2026

• Keyence
• Procter & Gamble

_{Source: Trading Economics, Nasdaq, LSEG (as of 19 April 2026)}