Introduction: Markets 'Growing Numb' to Trump's TACO's
Good morning, and welcome to our continuous coverage of business, financial markets, and the global economy.
Is the market losing interest in TACOs?
Oil traders are largely disregarding Donald Trump’s recent extension of the deadline concerning Iran’s energy infrastructure, maintaining crude prices at elevated levels today.
Last night, Trump extended the deadline for Iran to reopen the Strait of Hormuz by 10 days, moving it to 6 April, stating that talks are "going very well." However, Iran denies "begging to make a deal," as claimed by the US president, and this delay has not significantly boosted energy market sentiment.
Brent crude oil initially declined following Trump’s remarks but has since rebounded to $108.37 per barrel, slightly higher today, after a 5% increase on Thursday prior to the extension announcement.
Brent is nearly back to its pre-TACO levels, remaining a clear indicator of risk for some time. It is doubtful this has changed. pic.twitter.com/1TcpJSStt2
Despite Trump’s assertion that ceasefire talks "are going very well," traders observe Iranian officials describing the US proposal as one-sided and unfair.
Asia-Pacific markets also appear unimpressed, with Japan’s Nikkei down 0.43% and South Korea’s KOSPI losing nearly 0.5%.
Tony Sycamore, market analyst at IG, comments that Trump’s extension prolongs market uncertainty:
"While the rhetoric around de-escalation and dialogue is certainly preferable to outright conflict, the market appears to be growing increasingly numb to President Trump’s verbal reassurances. By extending the deadline, it effectively kicks the can down the road, pushing back any concrete resolution regarding the reopening of the Strait of Hormuz. This, in turn, simply extends the uncertainty weighing on markets and the broader global economy."
The agenda
- 7am GMT: UK retail sales for February
- 9am GMT: ECB Consumer Inflation Expectations survey
- 2pm GMT: University of Michigan consumer confidence report
CMA Launches Investigations into Fake Online Reviews
The UK's Competition and Markets Authority (CMA) has initiated a new crackdown on fake and misleading online reviews.
The CMA has launched consumer law investigations against five companies: Autotrader, Feefo, Dignity, Just Eat, and Pasta Evangelists.
The authority has not yet concluded whether consumer law has been violated but has expressed concerns regarding several issues:
- Treatment of negative reviews: Whether a number of 1-star reviews moderated by Feefo were not published on Autotrader’s platform and excluded from star ratings, potentially depriving consumers of a comprehensive view of customer experiences.
- Misleading reviews: Whether Dignity encouraged staff to write positive reviews about its crematoria services, possibly presenting an inaccurate representation of genuine customer feedback.
- Star ratings: Whether Just Eat’s rating system inflated certain restaurants’ and grocers’ star ratings, potentially misleading consumers about quality when choosing where to order.
- Discounts for reviews: Whether customers were offered discounts on future orders in exchange for leaving 5-star reviews on delivery apps without disclosure, which may have affected the reliability and representativeness of those ratings.
Trump’s new 10-day extension for Iran followed Wall Street’s largest daily loss since the Iran conflict began.
Michael Brown, senior research strategist at Pepperstone, suggests the US stock market approached the White House’s ‘pain threshold’:
"Call me a cynic, but the latest ‘TACO’ coming just eleven minutes after the S&P had closed out its worst day since the conflict began, having notched a loss of 1.7% on the day, is surely not a coincidence.
Yet again, this shows us that not only is Trump still receptive to pressure from financial markets, but that we are also still very, very close to the Admin’s pain threshold. Put even more simply, 6,500 in spoos is the strike price for the ‘Trump Put’."
UK Consumers Feel 'Ripple of Fear' from Iran Conflict
A longstanding measure of consumer confidence indicates that UK households are increasingly doubtful about the economy’s and their own financial prospects since the conflict began.
With forecasts predicting a rise in inflation as Brent crude prices remain above $100 per barrel, GfK reported its confidence index declined by two points to -21 in March—the lowest level since Donald Trump announced sweeping import tariffs in April last year, when the index dropped to -23.
Neil Bellamy, GfK’s consumer insights director, stated that the survey reflects concerns about inflation and economic prospects:
"A ripple of fear is spreading as is evident from the six-point fall in perceptions of the general economic situation over the next 12 months."
GfK noted that the sharp increase in energy prices, caused by the effective closure of the Strait of Hormuz and attacks on infrastructure in the region, "has led to fears of higher inflation and weaker growth across oil-importing countries."
Most respondents indicated that the economy had improved modestly over the past year but expected a significant decline ahead. They also reported intentions to save more and reduce spending on major purchases over the next 12 months.
A recent survey by the British Retail Consortium (BRC) showed that consumer confidence has "collapsed" since the onset of the Iran conflict.
The BRC poll asked respondents about the UK economy’s outlook over the next three months; 64% expected it to worsen, while only 11% anticipated improvement. The resulting balance of -53% was sharply lower than the -20% recorded a month earlier.
