Persistent tensions between Donald Trump and Iranian officials continue to undermine diplomatic prospects ahead of a looming ceasefire deadline, with uncertainty around the Strait of Hormuz further unsettling markets. Escalating rhetoric — from warnings of major strikes to Iran’s firm rejection of key US demands — has amplified risk-driven volatility across commodities.

Still, downside pressure on palladium was partly offset by supportive longer-term demand expectations. Nornickel is progressing research into the use of palladium in lithium-sulphur batteries, focusing on enhancing durability for next-generation EV systems. The initiative aims to extend battery lifespans beyond 1,000 charge cycles, a key threshold for large-scale commercial deployment.

Even so, the BOJ is widely expected to upgrade its inflation projections at this month’s meeting, reflecting persistently high energy costs. Separately, the IMF indicated that the BOJ could largely look through inflation stemming from the conflict involving Iran, arguing that its impact on underlying price dynamics is likely to be limited and should not derail the central bank’s gradual tightening path.

At the same time, US–Iran tensions intensified over the weekend. The United States seized an Iranian-flagged cargo vessel in the Gulf of Oman, while Tehran backed away from plans to reopen the Strait of Hormuz and announced it would not participate in a second round of negotiations.

The modest 0.5 percentage point fall suggests a cautious recalibration rather than a sharp withdrawal by overseas investors. While the change is incremental, continued easing in offshore ownership can be closely watched by markets for potential implications for demand, liquidity, and pricing in New Zealand’s sovereign bond market.

The figures were updated on 20 April 2026, providing the latest snapshot of foreign appetite for New Zealand government securities as investors adjust their portfolios amid evolving global and domestic conditions.

The one-year Loan Prime Rate was left unchanged at 3%, while the five-year LPR held at 3.5%, marking the eleventh straight month without adjustment and remaining at record lows. Although deflationary pressures have begun to ease tentatively and growth momentum is gradually stabilising, authorities remain vigilant to external risks.

In particular, policymakers are closely watching rising geopolitical tensions in the Middle East, following the US seizure of an Iranian cargo vessel over alleged sanctions violations and Iran’s indication that it will not join a second round of ceasefire talks. The central bank has reiterated that monetary policy will stay “supportive” and “moderately loose,” with the dual objective of sustaining economic growth while safeguarding currency stability and overall financial conditions.

Investors largely shrugged off escalating tensions in the Middle East after Iran reasserted control over the Strait of Hormuz, claiming that the U.S. blockade of Iran-linked vessels breached a ceasefire agreement. Market sentiment was further supported by the People’s Bank of China’s decision to keep its key lending rate unchanged at 3%, as well as stronger-than-expected economic data showing China’s GDP expanding 5% year-on-year in the first quarter.

Heavyweight contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which represents more than 40% of the TAIEX’s total market capitalization, climbed 1.2%. Other notable early gainers included VisEra Technologies, Qualipoly Chemical Corp., Lintes Technology, and Mirle Automation, each rising by around 10%.

The one-year Loan Prime Rate was left unchanged at 3.0% and the five-year LPR at 3.5%, marking the eleventh consecutive month without adjustment and keeping both benchmarks at record lows. Although deflationary pressures have begun to ease and growth is gradually stabilizing, policymakers remain alert to external risks, particularly escalating geopolitical tensions in the Middle East.

Financial stocks led the gains, with Industrial and Commercial Bank of China up 0.7%, Agricultural Bank of China advancing 1.1%, and China Construction Bank Corporation climbing 1.5%. Other notable movers included Zhongji Innolight, up 2.5%, Midea Group, which added 1.5%, and Luxshare Precision Industry, gaining 4.3%.

Upside momentum was limited, however, by a sharp decline in U.S. stock futures after Washington seized an Iranian cargo ship accused of attempting to breach its blockade. Tehran vowed retaliation and ruled out further talks, adding to geopolitical uncertainty.

On the domestic front, investors are looking ahead to Bank Indonesia’s policy meeting this week, after the central bank left interest rates unchanged for a sixth straight meeting in March. While inflation currently remains within the official target range, the balance of risks is tilted to the upside, with geopolitical tensions heightening concerns over core inflation.

Early gainers included Bumi Resources Minerals (+5.3%), Impack Pratama Industri (+4.4%), Energi Mega Persada (+3.4%), and Triputra Agro Persada (+3.0%).

Even so, the medium-term outlook remains mixed. The planned restart of Boliden’s Tara mine and the ramp-up of output at Ivanhoe Mines’ Kipushi project are expected to keep the global zinc market in a modest surplus, consistent with data indicating that the market moved into surplus in January.

On the demand side, conditions remain broadly supportive, with forecasts pointing to annual growth of around 2%. At the same time, investors are closely tracking developments in the Middle East, which could reshape broader macroeconomic conditions and, in turn, influence sentiment toward zinc demand.

Over the weekend, President Donald Trump stated that American naval forces had intercepted and seized control of an Iranian-flagged cargo vessel in the Gulf of Oman after it allegedly attempted to breach a blockade—an action Tehran denounced as a violation of the ceasefire. The incident intensified concerns over energy supply security and kept regional risk appetite restrained at the start of the week.

Even so, finance and technology shares underpinned the market’s advance. Key gainers included Tencent Holdings (0.1%), Guoquan Food (1.0%), Xiaomi Corporation (1.3%), AIA Group (1.8%), and Kuaishou Technology (1.2%).

The protracted conflict has fueled higher inflation, sub-target economic growth, a wider current account deficit, and increased risks to remittance inflows in the Philippines. In response, the Bangko Sentral ng Pilipinas has urged banks to be more proactive in encouraging corporates to hedge their foreign exchange exposure, highlighting how the Iran conflict has exposed the country’s vulnerability to geopolitical shocks. The central bank emphasized that its main priority is to ensure the smooth functioning of domestic financial markets, so that capital continues to flow even amid oil price spikes, peso depreciation, and heightened volatility in global yields.

On the domestic front, recent data pointed to softer food inflation and moderating consumer spending, reinforcing expectations that the Reserve Bank of New Zealand will likely keep interest rates on hold for now. While price pressures are easing in some areas, underlying inflation remains a key concern, and the RBNZ has recently indicated it is ready to raise rates if core inflation shows signs of re-accelerating.

Investors are now focused on the upcoming first-quarter CPI release for clearer guidance on the central bank’s monetary policy trajectory.

However, overall risk appetite remained restrained. Escalating tensions between the United States and Iran pushed oil prices sharply higher, stoking inflation concerns and raising worries about input costs for South Korea’s energy‑dependent economy. Renewed disruptions around the Strait of Hormuz also reinforced expectations of elevated market volatility in the near term.

The decision by the People’s Bank of China (PBoC) signals a continued preference for policy stability, as authorities weigh the need to support economic activity against concerns over financial risks and capital outflows. With the LPR steady, borrowing costs for corporates and households remain anchored, suggesting that Beijing is not yet ready to deploy fresh rate cuts despite ongoing growth pressures.

Investors and analysts will be watching upcoming economic data for hints on whether the PBoC might adjust its stance later in the year, especially if signs of softer domestic demand or property-sector weakness intensify. For now, the unchanged 3.00% LPR underscores a cautious, wait-and-see approach from China’s monetary authorities.

The unchanged 5-year LPR suggests Chinese policymakers are opting for stability in lending costs as they monitor domestic economic conditions and financial sector dynamics. With the rate holding at 3.50%, markets will be watching upcoming data for clues on whether authorities will adjust borrowing costs later in the year to support growth or address financial risks.

The latest figures were updated on 20 April 2026.

Persistent disruptions in this key shipping corridor have unleashed an unprecedented energy supply shock, amplifying inflationary pressures and posing a threat to global growth. Oil-importing economies such as Japan are seen as particularly vulnerable. Even so, Japanese equities had climbed to fresh record highs last week, buoyed by optimism over a potential peace agreement and renewed enthusiasm for artificial intelligence–related sectors.

Among the standout gainers were Lasertec (up 5.2%), SoftBank Group (1.9%), Fujikura (1.7%), Mitsubishi Heavy Industries (4.7%), and Keyence (2.1%).

Risk sentiment was further weighed by caution ahead of the monthly lending rate decision in China, Australia’s largest trading partner, due later today, as well as upcoming domestic PMI releases. Persistent concerns over Australia’s inflation outlook also pressured the market.

Sector-wise, energy minerals, non-energy minerals, healthcare, and consumer non-durables led the declines, while gains in process industries and retail trade helped limit broader losses. The big four banks retreated between 0.5% and 3.1%. Other notable laggards included PLS Group (-5.1%), Lynas Rare Earths Ltd. (-2.5%), Woodside Energy (-1.9%), and BHP Group (-1.0%).

President Donald Trump said a US Navy guided-missile destroyer had disabled an Iranian-flagged cargo vessel in the Gulf of Oman, after which US Marines boarded and took control of the ship. The operation followed reports that Iran had fired on commercial vessels transiting the Strait of Hormuz, and that Tehran had once again closed the strategic waterway. Iranian authorities argued that a US blockade of Iran-linked ships violated a ceasefire set to expire on Tuesday.

The standoff in the Strait of Hormuz is amplifying concerns over a potentially deeper global energy crisis and undermining Trump’s expectations for a swift resolution of the conflict. Supply risks are being compounded by ongoing attacks on Russian refining infrastructure.