Bonds & Stocks
Stocks kicked off the week on a positive note, while bonds fell as data showed economic resilience and speculation grew that the Middle East conflict remains contained. Equities rose in early trading as US retail sales climbed by more than forecast in March and the prior month was revised higher. A surprise profit from Goldman Sachs Group Inc. also helped boost sentiment. Treasuries fell across the curve.
Economy
Intentionally or otherwise, Iran’s strikes on Israel have combined maximum international attention with minimal actual impact — firing more than 300 drones and missiles without any reported fatalities or much physical damage. That suggests the immediate impact on oil prices — and so global inflation and the trajectory for central banks — should be limited.
World
The huge salvo of missiles and drones launched from the arid plains of Iran toward Israel was the kind of direct conflict between the Middle East powers that the world had long feared would mark the explosion of a full blown regional war. But behind the unprecedented nature of the attack was a dance of diplomatic signaling that allowed both sides to claim success, raising the risk of a broader conflict without making it a certainty.