Week commencing
20 April 2026

US equities hit record highs as ASX 200 slips

United States (US) equity markets are on track for a third consecutive week of gains, with the highlight being fresh record closing highs for both the S&P 500 and the Nasdaq 100. This robust rally unfolded as optimism around a potential permanent ceasefire between the US and Iran allowed markets to largely look through the near‑term disruption in the Strait of Hormuz.

Locally, the ASX 200 is on track to finish the week about 0.40% lower, around the 8920 level, snapping a three‑week winning streak. After a strong rally in the first half of April, which saw the index briefly reclaim the psychologically important 9000 mark, profit‑taking set in. Soft Australian business and consumer confidence data served as a stark reminder of lingering domestic headwinds, coupled with the high probability of another Reserve Bank of Australia (RBA) interest rate hike looming in just over two weeks.

The week that was: highlights

• The US producer price index (PPI) for March came in softer than expected, rising 0.5% month-on-month (MoM) against a consensus of 1.1%, while core PPI also rose by less than expected, increasing 0.1% versus a 0.5% forecast
• US existing home sales for March fell to 3.98 million, missing the consensus forecast of 4.06 million and declining 3.6% MoM.
• The US New York Empire State Manufacturing Index for April surged to 11.0, significantly exceeding the expected -0.5 and moving out of contraction territory
• Continuing jobless claims ticked up slightly in the week ending 11 April, rising from 1.787 million to 1.818 million (consensus, 1.810 million), but remained near multi‑year lows
• Meanwhile, initial jobless claims fell back to 207,000 (consensus, 213,000) from 218,000 the week prior
• China’s (CN) balance of trade for March showed a surplus of US$51.13 billion, falling well short of the US$112 billion consensus estimate as imports surged 27.8% year-on-year (YoY) against an expected 11.1%
• Japan’s (JP) machinery orders for February jumped 13.6% MoM, massively exceeding the expected -1.1% decline and pushing the YoY figure to 24.7%
• Euro area industrial production for February rose 0.4% MoM, slightly beating the 0.3% consensus estimate
• The United Kingdom’s (UK) British Retail Consortium (BRC) retail sales monitor for March rose 3.1% YoY, easily beating the 0.9% consensus forecast
• Australia’s (AU) Westpac consumer confidence index for April plunged 12.5% to 80.1, falling well below the previous 91.6 reading
• Australian National Australia Bank (NAB) business confidence for March slumped to -29, a sharp drop from the revised zero reading in the previous month
• The Australian labour force report for March came in broadly as expected. Employment rose by 17,900 jobs, close to the forecast gain of 20,000
• The Australian unemployment rate held steady at 4.3%, as the participation rate eased slightly to 66.8% from 66.9%
• West Texas Intermediate (WTI) crude oil fell 7% to US$89.80
• The US dollar index (DXY) lost 0.50% to 98.22
• Bitcoin rose 6% to US$74,987
• Gold gained 1.56% to US$4795
• Wall Street’s gauge of fear, the volatility index (VIX), fell to 17.95 from 19.22 the previous week.

Key dates for the week ahead

Australia & New Zealand

• NZ – Balance of trade: Monday, 20 April at 6.45am SGT
• NZ – Inflation Q1: Tuesday, 21 April at 6.45am SGT
• AU – S&P Global Manufacturing PMI (flash): Thursday, 23 April at 7.00am SGT
• AU – S&P Global Services PMI (flash): Thursday, 23 April at 7.00am SGT

China & Japan

• JP – S&P Global Manufacturing PMI (flash): Thursday, 23 April at 8.30am SGT
• JP – S&P Global Services PMI (flash): Thursday, 23 April at 8.30am SGT
• JP – Inflation: Friday, 24 April at 7.30am SGT

United States

• US – Retail sales: Tuesday, 21 April at 8.30pm SGT
• US – Pending home sales: Tuesday, 21 April at 10.00pm SGT
• US – Initial jobless claims: Thursday, 23 April at 8.30pm SGT
• US – S&P Global flash PMIs: Thursday, 23 April at 9.45pm SGT

Europe & United Kingdom

• UK – Unemployment rate: Tuesday, 21 April at 2.00pm SGT
• UK – Inflation: Wednesday, 22 April at 2.00pm SGT
• EA – S&P Global flash PMIs: Thursday, 23 April at 4.00pm SGT
• UK – S&P Global flash PMIs: Thursday, 23 April at 4.30pm SGT
• UK – Retail sales: Friday, 24 April at 2.00pm SGT

Key events for the week ahead

NZ: Inflation Q1

Date: Tuesday, 21 April at 6.45am SGT

For the fourth quarter (Q4) 2025, New Zealand’s (NZ) annual headline inflation rate rose to 3.1%, the highest reading since mid‑2024 and slightly above the Reserve Bank of New Zealand (RBNZ) 1% - 3% target band. This was driven by higher tradables inflation, including food, international airfares and electricity costs. Core measures remained above the 2% midpoint, but still within the target band overall.

At the RBNZ’s official cash rate (OCR) review held last week (8 April), the central bank kept the OCR unchanged at 2.25%. While the bank acknowledged that the conflict in the Middle East could further weaken domestic demand and slow the economic recovery, it appeared more concerned about the inflationary implications.

The RBNZ noted that headline inflation is now forecast to reach 3.0% in the March quarter and rise considerably to 4.2% in the June quarter, driven by higher fuel prices and supply chain disruptions.

The committee emphasised that medium‑term inflation pressures will ultimately depend on how firms and households respond to these cost increases through price‑ and wage‑setting behaviour.

‘On balance, the committee decided to leave the OCR unchanged at this meeting. It will continue to assess the countervailing forces on the inflation outlook and stands ready to act decisively to ensure that inflation reaches the 2% midpoint of the target band in the medium term.’

Following this, the New Zealand rates market is now pricing in a full 25 basis points (bp) rate hike by July, with a cumulative 77 bp of RBNZ rate hikes priced by year end, taking the OCR back to 3.0%.

NZ headline and core inflation chart

UK: Inflation

Date: Wednesday, 22 April at 2.00pm SGT

For February, annual headline inflation in the UK held steady at 3.0%, unchanged from January. While this marked an eleven‑month low, it remained well above the Bank of England (BoE) 2% target. At the same time, core inflation unexpectedly ticked higher to 3.2% from 3.1% previously.

The February print was the final reading before the energy shock stemming from the Middle East conflict began feeding through. Energy prices have since surged by approximately 50%, significantly altering the inflation outlook.

Prior to the US‑Israeli strikes on Iran at the end of February, the BoE had expected inflation to fall close to its 2% target by April, helped by lower regulated household energy bills. However, at its mid‑March meeting, the BoE sharply revised its forecasts higher, now projecting inflation to rise towards 3.5% by mid‑year.

‘The committee will continue to monitor closely the situation in the Middle East and its impact on global energy supply and energy prices. It stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.’

Following this, the UK rates market is now pricing in a full 25 bp rate hike by July, with roughly a 50% probability of a second 25 bp hike before year end.

UK core inflation chart

US: S&P Global flash PMIs

Date: Thursday, 23 April at 9.45pm SGT

For March, the S&P Global US composite flash PMI slipped to 50.3, its lowest level in nearly a year. The details revealed a clear divergence between sectors. The services PMI fell to 49.8, slipping into contraction territory for the first time in three years. Firms cited the weakest growth in new business since April 2024, partly attributed to tariffs and the ongoing conflict in the Middle East.

In contrast, the manufacturing PMI rose to 52.3, marking an eighth consecutive month of expansion. Stronger output and new orders were supported by businesses stockpiling supplies and locking in prices amid the Middle East conflict.

The April flash figures will offer an early snapshot of how the US economy is navigating ongoing geopolitical uncertainty, elevated oil prices and shifting trade dynamics.

Consensus expectations point to a modest rise in the composite measure. However, any further slowdown, especially in services, could heighten concerns about stagflation risks and complicate the Federal Reserve (Fed) policy balancing act. Stronger‑than‑expected readings, by contrast, would support risk sentiment and reinforce the view of a resilient US economy.

US composite PMI chart

US Q1 2026 earnings

The US Q1 2026 earnings season continues with results due from companies including 3M, GE, Tesla, IBM, Boeing, Intel, Procter & Gamble, United Airlines and many more.