Edward Meir's week in review and thoughts for the week of April 27, 2026

An energy rally as US, Iran talks fall apart

The rally in energy was of course attributable to ongoing tensions in the Persian Gulf emanating from the dueling US/Iranian blockades. Both blockades remain in place. President Trump declared an “indefinite” ceasefire on Tuesday, raising hopes that diplomatic talks would ensue. But there is no sign that this is happening either. On Friday, markets were hopeful a second round of talks would take place over the weekend in Pakistan. That followed news Iranian Foreign Minister Abbas Araghchi had flown into Islamabad on Friday as part of a three-nation swing.

But just as US negotiators were preparing to leave for Pakistan, the Iranian foreign minister left for Oman. His departure prompted Trump to cancel the US leg altogether.

“Too much time wasted on traveling, besides which, there is tremendous infighting and confusion within their ‘leadership.’ Nobody knows who is in charge, including them,” Trump posted.

Could fighting resume?

In the Gulf, traffic in and out of the Strait of Hormuz remains constrained. US naval forces boarded at least four ships over the last week, including another on Saturday. Since the blockade began, 37 vessels have been stopped and redirected. Trump also ordered the US Navy to “shoot to kill” any Iranian boats putting mines in the Strait.

Meanwhile, a third aircraft carrier group – the USS George HW Bush – arrived in the region last week. Will it beef up the formidable naval power already assembled there? Or will it relieve one of the other carrier groups? Not helping market sentiment either last week was a statement from Israeli Defense Minister Israel Katz. Israel is ready to resume the war. It is just “waiting for a green light from the US” to deliver a “different and lethal” attack against Iran, Katz said. Israel itself is struggling with an uneasy ceasefire with Hezbollah in Lebanon.

Equities and treasuries

While all these developments helped crude prices push higher, the impact on other markets was more measured. US equity markets finished the week mixed. The Dow fell by 0.5%. The S&P-500 ended up 0.5%. And NASDAQ was the best performer, up 1.5% on the week as semiconductor stocks surged. In the US treasury market, the two-year yield ended down five basis points at 3.78%. The 10-year ended down one basis point at 4.31%. So far, treasury yields are taking the spike in oil prices in stride.

Metals and currency markets

In base metals, nickel ended 5% higher on the week on concerns about sulfuric acid shortages and Indonesian production quotas. The rest of the LME group finished with modest changes. Copper ended down by 0.3%. Aluminum and zinc each finished 0.7% higher. Lead ended flat, while tin finished 0.7% lower. Steel prices were firm across most geographies.

In the currency markets, the general dollar index gained ground, snapping a three-week losing streak. Its advance generated pressure on both gold and silver. Each closed down by about 2.5% and 6% on the week, respectively.

Macro readings and other news from the past week

• Secret Service agents rushed Trump offstage at White House Correspondents’ Dinner on Saturday night after shots were fired. A 31-year-old suspect from California has been detained.

• March retail sales jumped 1.7% month-over-month (consensus 1.3%) following a 0.7% increase in February. Excluding autos, sales rose 1.9% (consensus 0.9%). The numbers are constructive. Why? Because they suggest the Iran war has not crimped US consumer spending – at least not yet. Gasoline station sales surged by 15.5% last month following a 1.3% increase in February. The surge in prices at the pump lifted overall sales. The latest AAA figures list US pump prices at $4.09 per gallon, up from $2.98/gallon prior to the conflict.

• The March ADP private payroll number came in at 62,000, ahead of the 40,000 expected. There was not much change in the weekly initial claims numbers despite more layoffs making the headlines. Claims rose by 6,000 to 214,000. The longer-term continuing claims average rose by 12,000 to 1.821 million.

• March pending home sales came in at 1.5%, well ahead of the 0.5% consensus. The prior reading was revised to 2.5% from 1.8% as well.

• The preliminary US April S&P Global manufacturing PMI checked in at 54.0 vs. 52.3 seen in the month prior. In fact, there has been a notable uptick in a number of global manufacturing readings of late. Companies seem to be restocking given rising prices and growing logistical issues emanating from the crisis in the Persian Gulf.

• Steel Dynamics Inc. (SDI) remains bullish on the US steel market after it reported strong results for Q1. The company’s total steel shipments came in at 3.64 million short tons, up by 10% from Q4 levels and up 4.5% from a year ago. “We are seeing an improved steel market environment, supported by domestic trade actions, manufacturing onshoring, infrastructure program funding, and the increasing regionalization of supply chains in the US,” company CEO Mark Millett was quoted as saying. SDI expects the long steel US product markets to remain strong this year, particularly in structural steel and rail. The non-residential construction sector should be supported by strong data center spending and a rise in multifamily home building. “Overall, we remain optimistic,” Millett said.

• Century Aluminum has restarted the second potline at its Nordural smelter in Iceland several months earlier than anticipated, the company announced last week. The news will come as a relief to the European market. The region has been deprived of Mozal units out of Mozambique. And the shortage has been compounded by the recent falloff in Mideast supply.

• The global aluminum market is experiencing a “Black Swan” event, according to a Mercuria analyst who addressed the Financial Times Commodities Global Summit in Lausanne, Switzerland. Mercuria estimates the market will face a deficit of roughly two million tons between now and the end of the year, eroding the 3 million tons global stockpile (including non-visible units) projected to be on hand.

• Despite the problems emanating from the Persian Gulf, we were surprised to read that the International Aluminum Institute has global primary output in March rising by 0.9% year-on-year to 6.302 million tons. These numbers will surely have be revised at some later stage to incorporate the massive decline in Gulf production.

• South32 reported lower alumina and aluminum production last month, reflecting the placement of the Mozal smelter in Mozambique on care and maintenance. The company’s total aluminum production was 274,000 tons in the March quarter, compared with 298,000 tons a year ago. Output fell by about 11% at South32’s Brazil aluminum operations y/y in Q1. And the company’s Hillside smelter in South Africa experienced a decline as well to 176,000 tons in Q1, off by nearly 3% y/y.

• Higher fuel prices have led to increased sales of electric vehicles among European consumers. And we are seeing sales rising in the US as well, further contributing to stronger aluminum demand. E Mobility Europe reports new registrations of European EVs rose by 51% in March compared with February levels, running at about 242,000 units across fifteen countries. China’s battery electric vehicle (BEV) exports to Europe have continued to increase as well despite high duties. Export volumes reached 214,000 vehicles in the first two months of 2026, up 62% y/y, this according to the Rhodium Group.

• Shares of Freeport McMoRan weakened last week after the company cut its forecast for its Grasberg copper production in Indonesia to 800 million pounds for this year from an earlier estimate of 1.1 billion pounds. It expects total copper sales this year to reach 3.1 billion pounds, down from a January estimate of 3.4 billion pounds. Freeport added that it sees Grasberg’s operations nearing 65% of capacity in the second half of the year before reaching 80% by mid-2027. Full capacity should be restored by late 2027. These targets were all pushed back from what the company indicated earlier.

• The International Copper Study Group (ICSG) said it now sees the refined copper market in a 96,000-ton surplus for 2026, reversing its previous forecast calling for a 150,000-ton deficit. The ICSG cited lower demand and increased secondary production as key reasons behind its revisions. For 2027, the ICSG sees a 377,000-ton surplus but cautioned the number could change. Global refined copper usage is expected to grow by 1.6% in 2026 (down from a prior estimate of 2.1%) and by 2% in 2027. Chinese demand is projected to rise by 1.9% this year, with growth of 1.3% expected in ex-China regions. Mine output is expected to increase by 1.6% in 2026, down from 2.3% on account of slower growth in the Democratic Republic of Congo (DRC), Chile, and Indonesia, as well as output constraints at Grasberg and Kamoa. Mine output next year is expected to increase by 2.3% as new capacity ramp-ups in Chile and Zambia.

• China’s sulfuric acid exports to Chile collapsed to virtually nothing in March, according to Chinese customs data. An HSBC note cited by Reuters said the decline is going to feed into “upside risk to prices for copper and nickel.”

• In trade news, Canadian Prime Minister Mark Carney has assembled a new advisory committee that he will draw on as talks on renewing the United States-Mexico-Canada Agreement (USMCA) with the US get underway. Meanwhile, US Trade Representative Jamieson Greer told Mexico’s auto and steel industries they should not expect a renegotiation of USMCA to lead to lower tariffs on their respective sectors. “Greer said tariffs are here to stay. President Trump likes them. We will never go back to a zero-tariff world,” a source who attended his speech told Reuters. Reuters also reported that US buyers purchased 2.8 million of the 4 million vehicles produced in Mexico in 2024. But in 2025, Mexican exports to the US were down by nearly 3%. In addition, 60,000 related Mexican jobs were lost last year. Further job declines are expected for this year as well.

• In the UK, we are starting to see signs of inflation creeping into the economy. The March inflation reading rose to 3.3% from 3% in February. The prices paid index reported by British factories jumped as the price of “motor fuels” spiked by 9% on the month, its biggest rise since June 2022. The Eurozone is experiencing its own inflation issues as well. As we reported in a previous note, prices in the EU rose to 2.6% in March from 1.9% in February. In Asia, South Korea’s March PPI increased at its fastest year-over-year pace in three years.

This week’s US macro readings

Nothing comes out on Monday.

On Tuesday, we get the S&P Case-Shiller home price index and April consumer confidence readings (expected at 89.1, last 91.8).

Wednesday brings us durable goods orders for March (expected at 0.5%, last -1.4%), along with February housing starts (delayed, expected at 1.35 million). Building permits for February (delayed) and the March permit report, along with housing starts for March, all come out later that day as well. Wednesday also brings us the Fed policy statement and Federal Reserve Chair Jerome Powell’s news conference. It’s possibly Powell’s last one now that his successor, Kevin Warsh, could soon get confirmed by the Senate after the federal case against Powell was dropped.

Thursday brings us weekly initial claims data (expected at 215,000, last 214,000), our first look at Q1 GDP (expected at 2.4%, last 0.5%), and March personal income and spending (expected at 0.3% and 0.9%, last -0.1% and 0.5%, respectively). We also get March inflation numbers on Thursday as reflected by the PCE reading (expected at 0.7%, last 0.4%), with core PCE expected up by 0.3% (last 0.4%). The year-over-year rate is expected to come in at 3.2% (last 3%). Chicago PMI also comes out on Thursday as does the index of leading economic indicators.

On Friday, we get the April S&P manufacturing PMI, along with the April ISM manufacturing reading (expected at 52.9, last 52.7).

As has been the case for the past several weeks, geopolitical headlines will outweigh the impact of any of this week’s macro releases.

We wish all our readers all the best for the upcoming week.