Market News

China exports surge at start of 2026 as trade surplus widens sharply.

Summary:

• China’s exports surged 21.8% y/y in January–February, far exceeding expectations and accelerating sharply from December’s 6.6% growth.

• The country recorded a $213.6B trade surplus, well above forecasts and last year’s level.

• Imports also jumped 19.8% y/y, suggesting stronger trade flows despite weak domestic demand.

• China’s export strength continues despite renewed U.S. tariffs, with manufacturers shifting shipments toward emerging markets.

• Energy trade data showed crude imports up 15.8%, while refined product exports rose and natural gas imports edged lower.

• Large stockpiles and diversified supply chains may help China weather global energy disruptions tied to…

China’s trade data for January–February came in much stronger than expected.

• Exports (USD terms) rose 21.8% y/y (expected 7.1%, previous 6.6%).

• Imports (USD terms) increased 19.8% y/y (expected 6.3%, previous 5.7%).

• Trade balance printed at $213.62B, well above the $179.6B forecast (previous $114.10B).

• ICYMI: Goldman Sachs & Barclays warn sustained oil surge could push US inflation toward 3%
• Trump advisers urge Iran war exit plan amid epic oil price surge. Epic Blunder?
• Recap - Japan upgrades Q4 GDP to 1.3% on strong investment, Iran war clouds outlook
• PBOC sets USD/ CNY reference rate for today at 6.8982 (vs. estimate at 6.8891)
• Iran plans shipping levies in Gulf. Trump warns massive retaliation if oil flows disrupted
• Australian business confidence turns negative as conditions hold steady (pre war survey)
• Iran rejects Trump’s claims of progress in war, warns regional oil exports could halt
• UK consumer spending remains subdued as inflation fears rise and wage growth firms
• Japan Q4 GDP final revision improves from a porr preliminary result
• Japan…

Japan’s GDP growth revised sharply higher as investment strengthens, but energy risks cloud outlook.

Summary:

• Japan’s fourth-quarter GDP growth was revised sharply higher to 1.3% annualised, far above the preliminary estimate of 0.2%.

• The upgrade was driven by strong capital expenditure, which rose 1.3%, the fastest increase in a year.

• Private consumption also improved, revised up to 0.3% growth, indicating steady domestic demand.

• However, household spending fell 1.0% year-on-year in January, raising concerns about momentum heading into 2026.

• The war involving Iran threatens higher energy costs that could dampen consumption and investment.

• The Bank of Japan remains open to further rate hikes if growth continues broadly in line with its outlook.

Iran signals shipping pressure in Gulf while Trump warns of massive retaliation if oil flows are disrupted.

Summary:

• Iran is reportedly preparing “security duties” on ships linked to U.S.-allied countries in the Persian Gulf, signalling potential leverage over oil flows.

• Iranian sources claim Tehran holds influence over global oil prices through its position around the Strait of Hormuz.

• The Strait is one of the world’s most critical energy chokepoints, carrying roughly one-fifth of global oil shipments.

• Meanwhile, Donald Trump warned Iran would face overwhelming military retaliation if it disrupts oil flows through the strait.

• Trump also suggested the U.S. is not currently close to deciding on deploying troops to secure Iran’s nuclear stockpile.

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Australian business conditions hold steady while confidence slips into negative territory.

Note - this survey was taken before the war. With the surge in energy prices confidence will not have improved.

Summary:

• Australian business conditions held steady in February, while confidence slipped into negative territory.

• The NAB business conditions index remained at +7, around its long-run average.

• Business confidence fell sharply to -1 from +4, the first negative reading in almost a year.

• Sales strengthened modestly, while profits held steady and employment eased slightly.

• Labour and input cost pressures rebounded and retail price growth accelerated.

• Investment plans and forward orders improved, suggesting underlying demand remains resilient.

Summary:

• UK consumer spending grew modestly in February, rising 1.1% year-on-year, highlighting fragile household demand.

• Sentiment weakened as the Middle East conflict raised fears of higher fuel prices, energy bills and inflation.

• Retail sales growth slowed sharply, with wet weather and cautious spending weighing on the high street.

• Meanwhile, private sector pay awards accelerated to 3.4% in the three months to January.

• The pickup in wage settlements suggests cost-of-living pressures remain persistent despite easing inflation in 2025.

• The combination of resilient wage growth and geopolitical inflation risks could complicate the Bank of England’s policy outlook.

UK consumer spending expanded modestly in February but remained subdued overall as…

Japanese GDP Q4 2025, final.

0.3% q/q

• expected 0.3%, prior -0.6%

Annualized 1.3%

• expected 1.2%, prior -2.3%

GDP inflation measure 3.4% y/y

• expected 3.4%, prior 3.5%

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External Demand 0% q/q

• expected 0.0%, prior -0.2%

Capital Expenditure 1.3% q/q

• expected 1.1%, prior -0.2%

Private Consumption 0.3% q/q

• expected 0.1%, prior 0.2%

---

I'll have more to come on this separately

Japanese Household Spending January 2026

-2.5% m/m

• expected +0.8%, prior -2.9%

-1.0% y/y

• expected +2.5%, prior -2.6%

Australian consumer sentiment edges higher but households remain pessimistic as inflation fears rise.

Summary:

• Australian consumer sentiment rose modestly in March, breaking a three-month run of declines.

• The Westpac–Melbourne Institute index increased 1.2% to 91.6, though pessimists still outnumber optimists.

• Sentiment deteriorated later in the survey period as the U.S.–Israeli war with Iran intensified.

• Inflation expectations surged to 6.1%, marking the largest weekly increase since the series began in 2010.

• The Reserve Bank of Australia recently lifted the cash rate to 3.85% and warned further tightening may be needed.

• A separate ANZ-Roy Morgan survey showed confidence dropping sharply last week as rising petrol prices weighed on households.

Earlier on Monday Trump did a TACO for the benefit of markets, sending oil down from its highs and boosting stocks:

• US Trump: The war could be over soon

He has since spoken at a Republican conference where he has delivered much more mixed messaging.

Summary:

• Donald Trump delivered hawkish remarks on the war with Iran at a Republican conference, signalling the U.S. intends to pursue a decisive outcome.

• Trump said the U.S. has already achieved major battlefield success but insisted the conflict will continue until Iran is fully defeated.

• He claimed Iran’s drone and missile capabilities are being “demolished” by ongoing military operations.

• Trump argued Iran had been preparing attacks against the U.S., Israel and the broader Middle East before the…

• US stocks rebound into the close as Trump signals war could be over soon
• US Trump: The war could be over soon
• Crude oil futures settle up $3.87 and $94.77
• The good news? Crude oil is -16% off the high.The bad news? It is 10% higher on the day
• Tech turmoil: Financial stocks slump while energy sees a surge
• White House is mulling releasing oil from the SPR, but no formal decision has been made.
• Aureus Greenway shares soar on Trump-backed drone merger
• S&P 500 falls below December lows, opening the door for a retest of November's trough
• The USD is higher but off the highs for the day. What next technically?
• investingLive European markets wrap: Oil prices come off the boil, eyes on G7/IEA action
• Rate cut bets evaporate amid surging oil prices but rate…