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Introduction: Markets ‘growing numb’ to Trump’s TACO’s
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Is the market losing its appetite for TACOs?
Oil traders are shrugging off Donald Trump’s latest pause on striking Iran’s energy infrastructure, and are keeping crude prices at elevated levels today.
Last night, Trump extended his deadline for Iran to open the strait of Hormuz by 10 days to 6 April, claiming talks are “going very well”. But with Iran denying it is “begging to make a deal”, as the US president claims, the delay isn’t bringing much cheer to energy markets.
Brent crude oil did drop after Trump made his comments, but it has now risen back to $108.37 a barrel, slightly higher today, having jumped by 5% on Thursday before the extension was announced.
With Trump claiming ceasefire talks “are going very well”, traders can also see Iranian officials describing the US proposal as one-sided and unfair.
Asia-Pacific markets seem unimpressed too – Japan’s Nikkei is down 0.43%, with South Korea’s KOSPI losing almost 0.5%.
Tony Sycamore, market analyst at IG, says Trump has extended the uncertainty gripping markets:
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
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7am GMT: UK retail sales for February
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9am GMT: ECB Consumer Inflation Expectations survey
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2pm GMT: University of Michigan consumer confidence report
Key events
UK mortgage rates climb again to 19-month high
Average UK mortgage rates have climbed yet again, as the Middle East conflict drives up borrowing costs.
Data provider Moneyfacts reports:
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Average 2-year fix has risen from 4.83% at the start of March to 5.75% today. It’s highest since August 2024, and up from 5.67% yesterday.
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Average 5-year fix has risen from 4.95% at the start of March to 5.69% today. It’s highest since December 2023, and up from 5.62% yesterday
The City money markets are indicating that the Bank of England will raise interest rates three times by the end of 2026, to 4.5%, from 3.75% today.
Many economsts, though, have predicted the BoE will hold borrowing costs, rather than hike and risk further weakening the economy.
Adam French, head of consumer finance at Moneyfacts, says:
“Mortgage rates have continued to rise sharply, with around three in four active lenders increasing rates, launching or withdrawing products this week. The speed at which pricing is shifting is remarkable, the benchmark Moneyfacts average mortgage rate has risen from 5.40% on Monday to 5.65% today, its highest level in 19 months.
“Products have been slowly trickling back onto the market in recent days, with 160 added since Wednesday, but priced at much higher rates than previously which has been driving up average rates on new mortgages. There is still a net 1,620 fewer products on the market than there were when lenders began pulling deals in response to rising funding costs on 9 March 2026.
“The softer end of the mortgage market has been taking some of the biggest hits as short-medium term rate expectations have been completely turned on their head. The very cheapest deals have shifted significantly, with the lowest rate available to borrowers across the UK now at 4.47%, up from 3.51% before the conflict with Iran began – almost a full percentage point higher. This adds an extra £132 per month – almost £1,600 per year – to the cost of borrowing £250,000 over 25 years.
“While a quicker resolution to the conflict in the Middle East could ease pressure on rates, the reality is that a more volatile world is a more expensive world. Anyone looking to buy or remortgage this year needs to prepare for substantially higher costs than previously expected.”
European bond yields are rising…
European government bonds are weakening, as fears of the inflationary consequences of the Iran war rise.
UK government bond prices have fallen, pushing up the yield (or interest rate) on the debt.
Ten-year gilt yields are up 10 basis points (0.1 percentage point) at 5.048%.
Two-year gilt yields are 7.5bps higher at 4.6%.
Reuters reports that France’s 10-year government bond yield has hit itss highest since June 2009 at 3.876%, up 8 bps.
German government debt is suffering too – the yield on 2-year bunds has reached its highest since July 2024 at 2.768%, up 5 bps
European markets in the red as traders don’t buy Trump’s TACO
It’s another morning of anxious trading on Europe’s bourses.
The pan-European Stoxx 600 index has dropped by 0.66%, with losses on Germany’s DAX index (-0.75%), France’s CAC 40 (-0.34), Spain’s IBEX (-0.6%) and the Italian FTSE Mib (-0.7%).
The UK’s FTSE 100 couldn’t hold onto its earlier gains either – it’s down 40 points or 0.4% at 9,931 points.
Neil Wilson of Saxo Markets points out that Trump’s latest delay is not a deal – and that’s what investors want to see.
Minutes after US stocks posted their worst day since Middle East war, Trump was back on Truth Social extending his deadline for a peace deal with Iran by 10 days, claiming talks were going “very well”. So far so Taco…but markets ain’t buying it with crude oil prices stubbornly higher and equity markets lower while the dollar and bond yields are elevated.
Trump extended his deadline to Iran to 6 April, but while this scales back the risk of immediate escalation, it does not indicate a clear path to resolution. Markets have largely shrugged it off with Brent back to $110, rising for a third day and European stock markets selling off again in early trade on Friday morning.
Brent hits $110/barrel as markets don’t buy into Trump’s claims
The Brent crude oil price is now up 2% above $110 a barrel, for the first time since Monday, as markets shrug off Donald Trump’s new 10-day extension for Iran to open the strait of Hormuz.
Aaron Hill, chief market analyst at FP Markets, suggests traders may be “calling Trump’s bluff”.
He explains:
Commodity traders clearly did not buy into Trump’s de-escalation commentary, which is understandable. Brent is currently higher by nearly 2% this morning.
Sustained oil prices north of US$100 will clearly cement a more volatile market environment. Essentially, for stocks to gain a footing, oil prices must drop – oil is a fundamental input for crucial industries.
Uk auto sector ‘at crisis point’ as output falls
The UK’s car industry is at “crisis point”, economists are warning, after a slump in production in the run-up to the Iran war.
UK vehicle production fell by 17.2% in February, with 68,061 units leaving factories, new data from the Society of Motor Manufacturers and Traders shows.
That included a 74% plunge in commercial vehicle production, with car output down 10.7%.
Emily Sawicz, director and industrials senior analyst at audit, tax and consulting firm RSM UK, says:
“Today’s SMMT figures are further evidence that the UK automative industry is at crisis point.
At a time when it was already struggling, the war in the Middle East will add to its woes, not only pushing up energy prices but also disrupting the supply chains of key input materials with car makers “panic-buying” aluminium amid fears of a supply shortage.”
London stock market opens higher
Shares have opened a little higher in the City.
The FTSE 100 share index is up 23 points at 9,995 points, a rise of 0.23%.
Pharmaceuticals giant AstraZeneca (+3.4%) is leading the risers, after reporting that its Tozorakimab treatment for chronic obstructive pulmonary disease (COPD) had met its “primary endpoints” in key trials, by reducing “annualised rate of moderate-to-severe COPD exacerbations” compared with a placebo.
UK retailers have reported stronger demand for artworks this year.
The Office for National Statistics says there was strong growth in sales volumes at commercial art galleries in January, which continued to rise in February.
Brent crude back over $109
Brent crude is climbing higher this morning, further above its levels before Donald Trump gave Iran 10 days to open the strait of Hormuz.
Brent is now trading at $109.58 a barrel, the highest since Monday.
Oil traders may be concluding that the extension simply means the vital oil route will be closed for longer.
Jim Reid, market strategist at Deutsche Bank, says:
While the delay might reduce some of the immediate escalation risk, it offers no new visibility on the path towards resolution, given Iran’s denials over talks, and while the Strait of Hormuz remains largely closed.
More concrete signs of talks would surely be taken positively by investors, but they also have to grapple with the potential for further escalation, with the Wall Street Journal reporting last night that the US was considering sending as many as 10,000 additional troops to the Middle East.
Autotrader says it will “co-operate fully” with the CMA’s investigation into online reviews.
The car marketplace says:
We note that the CMA, exercising its new direct consumer enforcement powers, has today announced an investigation into a number of companies, including Autotrader and our third-party moderator, in relation to online consumer reviews.
We endeavour always to operate as a responsible and compliant business and will co‑operate fully with the CMA’s investigation.
UK retail sales fell in February
Retail sales across Great Britain fell in February, after a splurge in spending at the start of the year.
Retail sales volumes are estimated to have fallen by 0.4% in February, following a rise of 2.0% in January, the Office for National Statistics reports.
The ONS says supermarkets’ sales volumes fell back following a rise in January, while non-store retailers’ volumes also fell in February – implying people cut back after splashing out in the January sales.
Over December-February, retail sales volumes were up by 0.7%.
ONS senior statistician Hannah Finselbach says:
“Retail sales rose in the three months to February, with online shops seeing strong sales and art dealers also faring well. These were partially offset by a weak period for clothing stores.”
Retail sales were 0.7% up in Dec 2025 to Feb 2026 on the previous three months.
This was because non-store retail did well in the three months to Feb 2026 following a weaker Nov, as well as strong sales volumes for non-food stores in Jan 2026.
➡️ https://t.co/hrLTf5Pqrx pic.twitter.com/uk4kEXCSCJ
— Office for National Statistics (ONS) (@ONS) March 27, 2026
CMA launches investigations into online reviews
The UK’s competition watchdog has launched a new crackdown on fake and misleading online reviews.
The Competition and Markets Authority (CMA) has launched new consumer law investigations against five companies – Autotrader, Feefo, Dignity, Just Eat and Pasta Evangelists.
The CMA says it has not reached any conclusions about whether consumer law has been broken, but is does have concerns.
It says it will investigate:
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Autotrader and Feefo – Treatment of negative reviews: Whether a number of 1‑star reviews – which were moderated by Feefo – were not published on Autotrader’s platform, and were not counted towards star ratings, therefore denying consumers a fully rounded picture of other customers’ experiences.
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Dignity – Misleading reviews: Whether Dignity asked staff to write positive reviews about the company’s crematoria services – giving people a potentially inaccurate picture of genuine customers’ feedback.
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Just Eat – Star ratings: Whether Just Eat’s ratings system has inflated certain restaurants’ and grocers’ star ratings – giving consumers a potentially misleading picture of quality when choosing where to order.
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Pasta Evangelists – Discounts for reviews: Whether customers were offered discounts on future orders in exchange for leaving 5-star reviews on delivery apps, without this being disclosed – meaning people may not have known how reliable or representative those ratings were.
Trump’s new 10-day extension for Iran came shortly after Wall Street posted its biggest daily loss since the Iran war began.
Michael Brown, senior research strategist at Pepperstone, suspects the US stock market fell close to 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 war
Phillip Inman
A long-running measure of consumer confidence has confirmed that UK households are losing faith in the ability of the economy and their own finances to grow since the Middle East conflict began.
Amid forecasts of a jump in inflation as Brent crude prices remained above $100 a barrel, GfK said its confidence index was down two points to -21 in March – the weakest level since Donald Trump announced sweeping import tariffs in April last year. At the time, the index sank to -23.
Neil Bellamy, the firm’s consumer insights director, said the survey showed people are concerned about the prospects for inflation and the economy.
“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 said the sharp rise 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”.
A majority of respondents said the economy had improved modestly over the last year, but was about to decline significantly. They said they were likely to save more and spend less on big ticket items over the next 12 months as a result.
A measure of consumer sentiment by the British Retail Consortium showed yesterday that consumer confidence had “collapsed” since the start of the Iran war.
The BRC poll asked about the state of the UK economy over the next three months, 64% of respondents told a survey they expected it to get worse. Just 11% thought it would get better. The resulting balance of -53% was sharply lower than the -20% reading a month earlier.
Introduction: Markets ‘growing numb’ to Trump’s TACO’s
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Is the market losing its appetite for TACOs?
Oil traders are shrugging off Donald Trump’s latest pause on striking Iran’s energy infrastructure, and are keeping crude prices at elevated levels today.
Last night, Trump extended his deadline for Iran to open the strait of Hormuz by 10 days to 6 April, claiming talks are “going very well”. But with Iran denying it is “begging to make a deal”, as the US president claims, the delay isn’t bringing much cheer to energy markets.
Brent crude oil did drop after Trump made his comments, but it has now risen back to $108.37 a barrel, slightly higher today, having jumped by 5% on Thursday before the extension was announced.
With Trump claiming ceasefire talks “are going very well”, traders can also see Iranian officials describing the US proposal as one-sided and unfair.
Asia-Pacific markets seem unimpressed too – Japan’s Nikkei is down 0.43%, with South Korea’s KOSPI losing almost 0.5%.
Tony Sycamore, market analyst at IG, says Trump has extended the uncertainty gripping markets:
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
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