Stable Market Minute - 20th April 2026: Strait Stand-Off

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Over the weekend, geopolitical tensions flared as communications between Iran and the US broke down, leading to uncertainty around the status of the Strait's opening. This has resulted in a volatile market environment, with equity markets dipping, crude oil prices climbing, and gold seeing a slight decrease. Meanwhile, the US dollar has shown some strengthening.

In recent news, the International Monetary Fund (IMF) has downgraded the UK's growth forecast, singling out Rachel Reeves' tax policies as the most impactful among G7 nations. This has added to the economic uncertainty, particularly for businesses and investors navigating these shifts.

The airline industry is also facing challenges due to rising kerosene costs. Virgin Atlantic has hedged 60% of its fuel at lower rates, yet continues to impose fuel surcharges. Conversely, Norse Airlines, having opted not to hedge, has been forced to park planes and cut flight routes.

This week's market data is set to be dense, with key releases including UK jobless data and US retail sales on Tuesday, UK inflation figures on Wednesday, and sentiment reports from manufacturing and global services in both the UK and US on Thursday. The week concludes with UK retail sales figures on Friday morning.

Currency movements have seen GBP/USD back above 1.35, EUR/USD trading around 1.1750, and GBP/EUR hovering near 1.15. As global tensions and economic forecasts continue to influence market dynamics, investors should brace for another turbulent week ahead.

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