Labor market conditions were broadly steady. Overall employment was unchanged, but firms reported slightly longer workweeks, with the hours worked index rising to 4 from 0.9. Wage pressures showed little change, as both the wages and benefits indexes were flat.

Price pressures intensified. The finished goods price index jumped to 27.6, its highest level since July 2022, and the raw materials price index increased 4.3 points to 37.

Looking ahead, expectations for general business activity improved, with the corresponding index up 4 points to 14.1, indicating that firms anticipate stronger manufacturing activity over the next six months.

Recent data reinforced this trend: Canada’s headline producer price index rose 2.4% month-on-month in March, well above the 1.6% consensus forecast, while raw materials prices jumped 12%, the steepest gain since 2020. Earlier releases also showed annual consumer inflation accelerating by 0.6 percentage points to 2.4%, consistent with Bank of Canada warnings that higher energy costs are pushing up inflation expectations.

The Bank of Canada is widely expected to leave interest rates unchanged at this week’s meeting, though markets remain divided over whether policymakers will hint at a possible rate hike or signal an extended pause for the remainder of the year.

On the supply side, drought concerns persisted across key US growing areas, particularly in West Texas, although these risks were partially offset by improved conditions in the Delta and Southeast regions.

In contrast, demand fundamentals weakened on the back of softer US export activity. The latest USDA weekly export sales report showed net sales of Upland cotton totaling 119,900 running bales for the 2025/26 marketing year, a decline of 26% from the prior week and 55% below the four-week average.

The move deeper into negative territory suggests a modest worsening in manufacturing conditions compared with the previous month, when the indicator was close to flat. While still not pointing to a sharp contraction, the April reading indicates that manufacturers in the Dallas Fed region are facing increased headwinds as demand and activity lose some momentum.

Investors and economists will be watching upcoming releases closely to see whether April’s decline marks the start of a more pronounced slowdown in the sector, or a temporary setback following March’s near-neutral reading.

Both the Bank of Canada and the US Federal Reserve are scheduled to deliver policy decisions on Wednesday. Markets widely expect the BoC to leave interest rates unchanged. However, persistent geopolitical tensions, ongoing oil shocks, and mounting worries over energy-driven stagflation—combined with higher bond yields and signs of softer credit demand—have fueled speculation that policymakers could shift to a more hawkish tone later this year.

This backdrop pressured financials and the broader index. Bank of Montreal fell 0.5%, Toronto-Dominion Bank slipped 0.2%, and Royal Bank of Canada also edged lower. Fairfax Financial declined 0.4% ahead of its earnings release.

In contrast, energy producers outperformed as crude extended its gains on supply concerns. Canadian Natural Resources rose 0.7%, while Suncor Energy added 0.5%.

Over the weekend, President Trump canceled a planned visit to Pakistan by key envoys involved in mediation, while Iran reiterated that it will not negotiate under pressure. Although a ceasefire has largely held since early April, reciprocal shipping blockades have driven traffic through the strait to nearly zero. Trump is expected to meet with his national security team to seek a way out of the impasse.

Now in its ninth week, the conflict has pushed energy prices higher and triggered shortages in major consuming regions. The International Energy Agency has warned of an unprecedented supply shock and mounting risks of a slowdown in global oil demand.

Globally, oil prices advanced amid stalled US–Iran peace talks, stoking inflation concerns and prompting investors to further discount the likelihood of rate cuts in developed economies this year. In Brazil’s equity market, major banks were little changed, with Bradesco and Banco do Brasil each edging up 0.2%. Petrobras rose 0.5% on the back of higher crude prices. Among corporates set to report results, Gerdau (+1%) will release earnings after today’s close, Vale (+0.1%) is scheduled to report on Tuesday, and WEG will publish its figures on Wednesday.

At the same time, markets are closely tracking policy signals and decisions from major central banks. The South African Reserve Bank has maintained a cautious stance in recent months, repeatedly warning that external shocks, rand weakness, and persistent domestic price pressures continue to pose upside risks to inflation. March CPI remained close to the SARB’s 3% target, but rising fuel and electricity costs could push inflation above that level in the coming months, heightening the probability of an interest rate hike. Governor Lesetja Kganyago has recently reiterated that the central bank stands ready to act should price pressures intensify.

Market sentiment was supported by reports that Iran is prepared to permit vessels to transit the Strait of Hormuz if the US lifts its blockade, a development that could reopen the flow of tanker exports from the region.

Shares of the large-cap tech “hyperscalers” were mixed ahead of earnings due Wednesday and Thursday from Microsoft, Alphabet, Amazon, and Apple. Investors expect fresh announcements on AI-related investment and updated guidance, set against ongoing skepticism over unchecked growth in capital expenditures across the sector.

Elsewhere, Qualcomm jumped 7% following reports it is partnering with OpenAI and MediaTek to develop new smartphone processors. Banks and asset managers were little changed as markets looked ahead to the likely confirmation of Kevin Warsh as the next Fed Chair.

The uptick in the 12-month BTF yield suggests investors are demanding slightly higher compensation for holding short-term French government debt. While the move is incremental, it underscores a continuation of upward pressure on short-term funding costs for the French Treasury, and may reflect evolving expectations around interest rates and market conditions in the euro area.

For market participants, the higher BTF yield serves as a reference point for short-term euro-denominated assets and can influence pricing across money markets, corporate funding costs, and liquidity strategies within the region’s fixed-income space.

The marginal increase in the short-term borrowing cost suggests a modest uptick in market expectations for near-term interest rate conditions, as investors continue to demand slightly higher compensation for holding French government paper. While the move is small, it will be closely watched by market participants as an indicator of sentiment around eurozone monetary policy and short-term funding conditions for France.

The 6-month BTF auction remains a key barometer for the French Treasury’s short-term financing environment, and the latest result signals that funding costs, while still contained, are nudging higher compared with the prior auction round.

The move, based on data updated on 27 April 2026, indicates a modest increase in investor-required returns on short-dated French government paper. While the change is marginal, the higher yield suggests markets are still demanding a small premium for holding short-term French sovereign debt, often seen as a barometer of immediate funding conditions and near-term interest rate expectations.

This incremental rise in the 3-month BTF rate will be closely watched by fixed-income investors and policymakers as they assess the evolving cost of refinancing and the broader trajectory of short-term rates in the euro area.

At the same time, traders remained focused on inflation dynamics and monetary policy signals. South African Reserve Bank Governor Lesetja Kganyago flagged an increased probability of further interest rate hikes, stressing that the Bank would act against sustained inflationary pressures linked to the US–Israeli conflict with Iran and reiterating its strong commitment to the 3% inflation target. Headline inflation in South Africa ticked up to 3.1% in March from 3.0% in February, and the full impact of higher oil prices and broader global cost pressures has yet to feed through to consumer prices, with steeper increases anticipated in the months ahead.

Meta has signed agreements for up to 7.8 gigawatts of nuclear capacity to support its AI services, while Microsoft has committed to renewing older reactors that will exclusively supply more than 800 megawatts to its AI data center operations.

At the policy level, the U.S. government has moved to ease regulations on the construction and permitting of uranium conversion and enrichment facilities and has announced new deals to build additional nuclear power plants. These include a partnership with Cameco, which cleared the way for development of Westinghouse reactors, as well as a new $2.7 billion package of contracts awarded to Centrus and two other reactor and enrichment companies.

Manufactured exports were the main growth engine, rising 29.5% to $64.72 billion. Within this category, there were notable advances in mining and metallurgical products (61.8%), electrical and electronic equipment (17.8%), food and beverages (14.4%), and automotive products (2.0%).

Agricultural and fishery exports increased 0.7% to $2.22 billion, supported primarily by strong growth in edible fruits (38.5%) and citrus products (36.1%). In contrast, oil exports fell 20.4% to $1.71 billion, as crude export volumes declined to 495,000 barrels per day from 827,000 a year earlier.

Imports climbed 24.3% to $64.79 billion, reflecting a broad-based increase across categories: consumer goods imports rose 19.3%, intermediate goods 27.2%, and capital goods 7.0%.

Over the first quarter of 2026 as a whole, Mexico posted a trade deficit of $1.01 billion.

The Bank of Canada and the US Federal Reserve will deliver policy decisions on Wednesday. While markets largely expect the BoC to leave rates unchanged, persistent geopolitical tensions, oil-related supply shocks, and growing fears of energy-driven stagflation—combined with higher bond yields and concerns over weakening credit demand—have fuelled expectations of a more hawkish tilt later in the year. This backdrop is weighing on banking shares and the broader Canadian equity benchmark.

Energy producers are poised to open higher as oil extends its gains on supply concerns, though the upside may be contained as prices remain below recent highs. Gold prices edged lower, putting mild pressure on gold miners.

After recording a trade deficit of USD -1.090 billion in February 2026, Mexico’s external accounts improved markedly the following month. The country’s trade balance rose to a surplus of USD 2.499 billion in March 2026, signaling a significant month-on-month adjustment in the flow of goods with the rest of the world.

The move from deficit to surplus suggests a strong rebound in net exports during the period. While detailed drivers such as sector breakdowns or export and import volumes were not disclosed in the available data, the headline figure points to a notable strengthening in Mexico’s external position as the first quarter of 2026 came to a close.

After recording a trade deficit of -0.463 billion USD in February 2026, Mexico’s external position strengthened markedly in March, with the trade balance reaching a surplus of 5.932 billion USD. This month‑to‑month shift represents a significant improvement in the country’s trade performance in the space of just one period.

The March figures suggest a notable change in the dynamics of Mexico’s cross‑border goods flows compared with February. While the data released do not break down the specific drivers, the headline move from deficit into a multi‑billion‑dollar surplus will be closely watched by markets and policymakers assessing the momentum of Mexico’s external sector in early 2026.

Non-earmarked (free resource) credit reached R$4.1 trillion, an increase of 1.1%. For legal entities, this segment totaled R$1.6 trillion, driven by seasonal growth in discounted bills (8.5%), working capital with maturities of up to 365 days (9.1%), and on-demand (sight) credit card lines (14.6%).

For individuals, non-earmarked credit amounted to R$2.5 trillion, up 1.1%, supported by growth in sight credit cards (2.2%), private-sector payroll-deductible loans (10.1%), and vehicle financing (0.8%).

Directed (earmarked) credit advanced 0.7% to R$3.1 trillion, with increases of 1.2% for companies and 0.5% for households. On a yearly basis, credit to legal entities expanded 7.6%, while credit to individuals rose 10.9%.

Market sentiment was supported by reports that Iran is prepared to allow vessels to transit the Strait of Hormuz if the US lifts its blockade, a move that could reopen the flow of tanker-based energy exports from the region.

Shares of large-cap technology “hyperscalers” were subdued ahead of earnings due Wednesday and Thursday from Microsoft, Alphabet, Amazon, and Apple. The sector is expected to detail increased AI-related investment and update forward guidance, set against a backdrop of growing skepticism toward unchecked capital expenditure growth.

In single-stock moves, Qualcomm jumped 10% following reports it is collaborating with OpenAI and MediaTek to develop next-generation smartphone processors.

Meanwhile, bank and asset management shares were largely flat as investors awaited the likely confirmation of Kevin Warsh as the next Chair of the Federal Reserve.

The data, based on a month‑over‑month comparison, indicate that while February’s lending had already been growing modestly, March’s increase more than doubled the pace. In this framework, the “actual” figure of 0.9% reflects the change from February to March, while the “previous” 0.4% represents the change from January to February. The acceleration points to rising demand for credit or a more accommodative lending stance by banks as the first quarter of 2026 drew to a close.

Market participants and policymakers will now be watching whether this faster lending growth proves to be a one‑month rebound or the start of a more sustained upswing in Brazilian credit conditions as the year progresses.

The dry spell is expected to continue following weeks of scant rainfall, high temperatures, and pasture fires. Farmers are weighing whether to drill new wells for irrigation and, in some cases, considering grazing cattle directly on wheat fields. Meteorologists at the US Department of Agriculture emphasize that the spring growing period is critical for grain formation, making upcoming weather patterns particularly important. Market participants are closely monitoring rainfall forecasts for signs of relief.

At the same time, fertilizer prices have surged amid supply disruptions tied to tensions involving the US, Iran, and Israel, while traffic through the Strait of Hormuz remains heavily constrained, further tightening global energy markets. On the demand side, Saudi Arabia has purchased 985,000 metric tons of wheat, with shipments routed via Red Sea ports to avoid potential disruptions in Gulf shipping lanes.

Buying in pharmaceuticals, information technology, automobiles and banking stocks underpinned the advance. Sun Pharma led the gains, jumping 7% after announcing a major all-cash acquisition of US-listed Organon in a deal valuing the company at $11.75 billion. Other notable gainers included Reliance (2.9%), Adani Ports (2.7%), Tech Mahindra (2.6%), M&M (2.1%), NTPC (2.1%), HCLTech (2.1%) and TCS (2.1%). On the downside, Axis Bank fell 3.1% after the lender reported a marginal decline in Q4 profit.

Across Asia, coal remains crucial for baseload power. Japan is extending the operating life of its coal-fired plants, and South Korea is loosening restrictions on coal use. At the same time, China is ramping up domestic coal production and accelerating coal-to-gas projects to reduce reliance on imports. Together, these moves highlight a wider shift toward energy security, with governments seeking to shield themselves from persistent concerns over gas and oil supply.

Nonetheless, any normalization in energy flows from the Middle East could quickly reverse recent coal price gains. Over the longer term, demand for coal is expected to face mounting headwinds from the rapid expansion of renewable energy and ongoing policy-driven energy transitions around the world.

In corporate developments, Anglo American has drawn interest from at least three potential buyers for its Australian steelmaking coal assets. Stanmore Resources, Mitsubishi Corporation, and PT Buma Internasional Grup are among the suitors reportedly evaluating bids.