International financial markets have fallen into a state of serious instability due to recent heightened tensions in the Middle East and the United States' hardline diplomatic stance. Along with a sharp rise in oil prices, the value of the dollar has once again climbed upward, while global stock markets have experienced a general downward adjustment, clearly showing a risk-averse sentiment. In particular, according to data released by the International Financial Center on the 24th, concerns that the conflict between Myanmar and Iran could become prolonged have stimulated volatility across the entire market, causing stock indices to fall by 0.4% and the dollar index to rise by 0.2%, while interest rates have also risen by 2 basis points, indicating that market instability is intensifying.
In particular, international crude oil prices surged by more than 3%, raising fears of a renewed inflation, which has led to a vicious cycle of rising U.S. Treasury yields. Meanwhile, as the sentiment of preferring safe assets has strengthened, the dollar index has continued to rise, while the euro and yen have been unable to avoid weakness. President Donald Trump stated that he would only reach an agreement with Iran when conditions favorable to the United States are met, hinting at the possibility of delayed negotiations. He also mentioned the sinking of a ship that laid mines in the Strait of Hormuz and announced plans to expand mine-clearing operations, thereby heightening military tensions. This clearly suggests that energy price instability could become prolonged, coupled with the message that short-term oil price increases are being accepted.
Macroeconomic indicators are sending mixed signals, confusing the market's direction. The U.S. April S&P Global Purchasing Managers' Index rose to 52.0, continuing the economic expansion trend, with an increase in new manufacturing orders being the main driver. However, there is also an assessment that the expansion of production could be a temporary response to supply concerns caused by the war. At the same time, as input and output price indices rise, inflationary pressures are resurfacing, and while new initial jobless claims exceeded expectations, they remain at around 200,000, indicating that the labor market is still stable. Consequently, the expectation for interest rate cuts by the Federal Reserve has weakened.
Economic trends by region are diverging sharply. The Eurozone Purchasing Managers' Index fell to 48.6, re-entering a contraction phase, due to the simultaneous effects of demand slowdown and rising prices caused by the Middle East war. Conversely, China is seeing analysis suggesting that the expectation of passing the bottom of the real estate market could have a positive impact on the stock market. Japan is maintaining a gradual recovery while strengthening coordination with the United States to address the weak yen, leaving open the possibility of currency intervention. Oil price increases, war risks, and monetary policy paths, which have emerged as key variables, are acting as major factors expanding market volatility. As a result, the current market has entered a phase where robust economic conditions, a resurgence of inflation, and geopolitical risks collide, making it highly likely that volatility will continue to expand in the short term.