Global markets close out the week navigating a mix of strong U.S. labour data, rising geopolitical tensions in the Middle East, and shifting monetary policy expectations—all under thin liquidity conditions due to Easter bank holidays.
U.S. labour market data surprised to the upside, with Nonfarm Payrolls printing at 178K, significantly above the 65K forecast, while private payrolls surged to 186K. The unemployment rate edged down to 4.3%, reinforcing resilience in the labour market. However, wage growth softened to 3.5% YoY, suggesting some easing in inflationary pressures. Meanwhile, labour force participation ticked slightly lower to 61.9%, and government payrolls remained weak.
Following the data, traders scaled back expectations for Federal Reserve rate cuts in 2026, as the stronger employment picture supports a more cautious policy stance.
On the geopolitical front, tensions in the Middle East remain elevated. Escalation between Iran and regional actors continues to disrupt key infrastructure and energy routes, with fresh attacks reported across Gulf states, including damage to energy facilities in Kuwait and operational disruptions in Abu Dhabi. The Strait of Hormuz remains a focal point, with limited signs of reopening despite ongoing negotiations. Former President Donald Trump added to the volatility, suggesting the U.S. could take control of the strategic waterway if given more time.
Oil markets reacted sharply, with crude prices holding above $110 per barrel, supported by supply concerns and continued threats to regional stability.
Equity markets showed mixed performance. Asian stocks edged higher into the close, supported by optimism around potential trade flow improvements, while U.S. equity futures drifted lower, with S&P 500 contracts down modestly. European and several global markets remained closed for Easter holidays, contributing to subdued liquidity and limited price action across asset classes.
In fixed income, Treasury futures traded largely unchanged during the Asian session, with cash markets closed in major financial centres. The U.S. dollar traded mixed against G10 peers as investors positioned ahead of further macro developments.
Looking ahead, markets will remain highly sensitive to geopolitical headlines over the weekend, particularly any developments around the Strait of Hormuz and Middle East conflict dynamics. Additionally, evolving expectations around Federal Reserve policy will continue to drive cross-asset volatility in the sessions ahead.
