Ten Stories Moving the Market

U.S. President Donald Trump told aides he’s willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed, according to administration officials; Trump and his aides assessed that a mission to pry open the chokepoint would push the conflict beyond his timeline of four to six weeks – WSJ. (Why you should care – officials are considering diplomatic pressure to resume the free flow of trade through the Strait of Hormuz)

China's ​factory activity grew at the fastest pace in a year in March, underpinned by improved demand, according to National Bureau of Statistics data; the official manufacturing purchasing managers' index rose back into expansion territory, driven by sub-indexes for output and new ​orders – Reuters. (Why you should care – the data was likely skewed by the Lunar New Year holiday)

Federal Reserve Chair Jerome Powell said the central bank is inclined to hold rates steady and look past the energy shock from the war in Iran but cautioned that it might not be able to sit on the sidelines if rising prices shift the public’s expectations about inflation over time – WSJ. (Why you should care – Powell’s comments should help to ease Wall Street’s concerns around imminent interest rate hikes)

Federal Reserve Bank of New York President John Williams said the current setting of monetary ​policy is in a good place to deal with a range of challenges that very likely herald higher near-term inflation; Williams said the war in the Middle East boost inflation near term but dampen economic activity – Reuters. (Why you should care – Wiliams comments imply the Fed doesn’t need to raise interest rates)

The U.S. bond market rallied back from its deepest selloff in 17 months as traders ditched wagers that the Federal Reserve will hike interest rates, with the focus shifting to speculation the Iran war will deepen an economic slowdown – Bloomberg. (Why you should care – a prolonged conflict could weigh on domestic economic consumption, boosting the case for Fed support)

Minutes of the Reserve Bank of Australia's March meeting showed board members agreed it was not possible to predict the future path for interest rates with any confidence, after two rate ​hikes this year; RBA members recognized that a prolonged Iran conflict could raise inflation but hurt economic growth – Reuters. (Why you should care – policymakers expressed concern that inflation growth could hit 5% if oil stays above $100 per barrel)

U.S. President Donald Trump repeated threats to destroy Iranian energy assets if the Strait of Hormuz isn’t reopened soon, raising fears the war could escalate after more American troops arrived in the region - Bloomberg. (Why you should care – the White House reiterated it is in “serious discussions” with Iran to end military hostilities)

Iran’s National Security Committee is said to have approved a bill that would impose fees on ships passing through the Strait of Hormuz, according to the semi-official Fars news agency; the bill would ban any country that imposes unilateral sanctions against Iran – Bloomberg. (Why you should care – the bill signals the Iranian government is willing to reopen the Strait of Hormuz for countries in Asia where the bulk of the traffic is headed)

Finance ​leaders from the Group of Seven economic powers are ready ‌to take "all necessary measures" to safeguard energy market stability and limit broader economic spillovers from recent volatility, according to a statement from the group – Reuters. (Why you should care – the group called on countries "to refrain from imposing ​unjustified export ⁠restrictions" on oil, gas and related products)

The White House proposed a regulation that is intended to open 401(k)s and similar retirement plans to private equity and private credit; the proposed regulation by the Labor Department aims to curb the litigation that dissuades employers from broadening their 401(k) investment menus beyond the typical mix of stock and bond funds – WSJ. (Why you should care – uptake is likely to be slow given the gradual pace of change in the 401(k) industry)

Economic Calendar:

Earnings – FDS, MKC, NKE, PLAY, PVH, RH

Australia – RBA Meeting Minutes

China – Official Manufacturing, Non‑Manufacturing, Composite PMI for March

Japan – CPI for March

Japan – Industrial Production for February

Japan – Retail Sales for February

U.K. – GDP Second Take for Q4 (2 a.m.)

Germany – Retail Sales for February (2 a.m.)

France – Consumer Spending for February (2:45 a.m.)

Eurozone – CPI for March (5 a.m.)

Canada – GDP for February (8:30 a.m.)

U.S. – FHFA House Price Index for January (9 a.m.)

U.S. – S&P Cotality Case‑Shiller U.S. National Home Price Index for January (9 a.m.)

U.S. – Chicago PMI for March (9:45 a.m.)

U.S. – CB Consumer Confidence for March (10 a.m.)

U.S. – JOLTS Job Openings for February (10 a.m.)

Treasury Auctions $75 Billion in 6-Week Bills (11:30 a.m.)

Fed’s Goolsbee (Chicago, Non‑voter) Speaks (12 p.m.)

Fed’s Barr (Board Member, Voter) Speaks (3 p.m.)

U.S. – API Weekly Crude Oil Stock (4:30 p.m.)

U.S. - American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)

Fed’s Bowman (Board Member, Voter) Speaks (5:10 p.m.)