Week ending 27th March 2026.

As you can see from the accompanying table it was more of a mixed week performance wise for global financial markets. Geopolitics and energy markets remained the primary drivers of financial markets over the past week, with the ongoing conflict involving Iran continuing to shape investor sentiment. Elevated oil and gas prices, alongside persistent uncertainty around supply disruptions, have increased concerns that the current situation could evolve into a more sustained inflationary shock, with implications for both economic growth and monetary policy.

Markets began the week on a more positive footing, supported by reports of a potential U.S.-led ceasefire on Iranian energy infrastructure and indications of renewed diplomatic engagement. This led to a temporary easing in oil prices and a rebound in both equities and bonds. However, optimism faded as the week progressed, with subsequent headlines suggesting that the U.S., Israel, and Iran remain far apart on the terms of any agreement. At the end of the week, Brent crude continued its climb over $110 per barrel. This came despite President Donald Trump’s announcement that he would extend his deadline for Iran to reach a deal by 10 days—pausing his threatened attacks on Iranian energy facilities until 6 April. Even with this temporary de-escalation, markets remained cautious.

In the US, equity markets ended a headline-driven week mixed. With a relatively light economic calendar, investor focus remained firmly on geopolitical developments and energy price movements.

European markets were somewhat more resilient, although gains were modest. The STOXX Europe 600 Index rose 0.35% in local currency terms, while the UK’s FTSE 100 Index outperformed slightly, advancing 0.49%, as negative drivers were offset by stronger‑than‑expected consumer data and energy‑sector support.

Economic data was thin on the ground. Reports demonstrated a softening in US consumer sentiment, reflecting growing caution among households. The University of Michigan’s Index of Consumer Sentiment declined to 53.3 in March from 56.6 in February, with notable weakness in short-term expectations and personal financial outlooks.

A similar trend was evident in Ireland, where consumer confidence fell to a three-year low. Retail sales data in both Ireland and the UK also indicated more subdued consumer activity, suggesting that higher living costs and uncertainty are beginning to weigh on spending behaviour. UK retail sales declined by 0.4% month-on-month in February, following a strong 2.0% increase in January, although the fall was less pronounced than expected.

Rising energy prices remain a key risk for the inflation outlook. Higher fuel and utility costs can feed through into a broad range of goods and services, potentially prompting central banks, including the Bank of England, Federal Reserve, and European Central Bank, to maintain a cautious stance on interest rate cuts.

Looking ahead, markets are likely to remain sensitive to geopolitical developments, particularly any changes in the outlook for energy supply and prices. Central bank policy expectations and further signs of consumer resilience or weakness will also be important in shaping market direction.

While the current environment may result in continued short-term volatility, it is important to recognise that such periods are a normal part of the investment cycle. Markets this year have increasingly been influenced by geopolitical developments and shifting inflation expectations, but underlying economic fundamentals remain broadly intact. For long-term investors, maintaining a diversified approach and focusing on strategic objectives remains key, particularly as periods of uncertainty can also create opportunities over time.

It will be a shorter trading week due to the Easter bank holiday weekend. Key data releases include Japan’s unemployment rate, industrial production, and retail sales, alongside Eurozone inflation figures. From the U.S., markets will be watching retail sales, the unemployment rate, and corporate earning.

Kate Mimnagh, Portfolio Economist