To The Moon

Peace At Last ?

Its just as well that there were not too many US economic reports out for the week ending 10 Apr 2026.

This is because the Middle East was on the brink of civilization annihilation when Trump almost made good his scarce tactics to level Iran flat.

Perhaps it was all the behind the scenes, flurry of activities that helped to successfully brokered the 2-week truce while the tripartite of US, Pakistan and Iran try to work out a lasting peace proposal acceptable to all parties.

It was this “peace” deal that help US market to turnaround for better or almost for worse.

This is not even considered a “work-in-progress” as both sides are still searching for the common ground to agree upon.

Nevertheless, while the peace deal’s details are being sorted out, US economic reports continued to be released as planned, for the show must go on.

Reports out last week.

The bunch of reports out includes:

• 6 Apr 2026 - ISM services for March 2026.

• 7 Apr 2026 - US consumer credit for February 2026.

• 8 Apr 2026 - Minutes of meeting of FOMC March 2026.

• 9 Aor 2026 - Jobless claims.

• 9 Apr 2026 - Personal consumption expenditure (PCE) for March 2026.

ISM Services PMI.

The ISM services PMI for March 2026 showed the sector is still expanding, but at a slower pace.

Headline PMI eased to 54.0 from February 2026’s of 56.1, while market consensus expected 55.4.

In short, the print missed expectations but remained solidly above the 50-growth threshold.

Beneath the headline numbers, the tone is mixed:

• New orders strengthened to 60.6.

• Employment fell back into contraction at 45.2.

• Prices jumped to 70.7, the highest since October 2022

From a distant, the report shows a "stagflationary" tilt within the services sector.

Although still resilient rather than rolling over, the uneven mix of softer hiring and stronger price pressures remains.

For US markets, that combination is more supportive of caution than excitement.

Growth (for now) is intact, yet inflationary pressure and weaker employment reduce the chance of a clean disinflation narrative.

Consumer Credit.

The February 2026 US consumer credit report showed that total credit rising by $9.48 billion. (see above)

This is a slowdown from January 2026’s downwardly revised $7.67 billion gain in January but still below market consensus of $10 billion.

Revolving credit (mainly credit cards) grew by a modest $0.71 billion, after a $2.57 billion increase in January 2026 - equating to a 0.6% annualized average.

Meanwhile, non-revolving credit (mainly auto & student loans) expanded more robustly by $8.79 billion, or 2.8% annualized.

This is a 2.2% overall annualized growth rate for the month, reflecting consumer caution amid high interest rates averaging 21% on cards.

In summary, consumer borrowing is still growing, but at a slower pace than expected.

This is good news though, to me.

The weaker credit card usage suggests households are becoming more cautious, while steady non-revolving credit confirms underlying demand remains.

FOMC - March 2026 minutes of meeting.

The document reveals a committee that is increasingly "divided" due to:

• Rising energy costs from the Middle East conflict.

• A notably cooling laboru market.

As a result, most members agreed that while current interest rate (3.50% –3.75%) is restrictive, they require "further confirmation" that inflation is heading back to 2% before committing to rate cuts.

Latest "dot plot" is “showing” only one cut for the remainder of 2026; despite “protest” from new membered Stephan Miran calling for an immediate -0.25% cut.

For the first time in several cycles, the minutes explicitly discussed a "two-sided" path.

1. Several members, led by Christopher Waller, suggested that rate hikes could become appropriate if inflation remains persistently above target due to tariffs and energy shocks.

2. Conversely, others noted they would favour quick cuts if US labour market weakens materially.

In summary, FOMC’s March 2026 minutes confirms that the committee is no longer on a pre-set path to interest cut.

This is due to paralysis encountered between (a) an "inflationary oil shock" and (b) a "labor market slowdown."

Until one of the 2 forces outweighs the other by a ‘wide’ berth, the Fed appears set to maintain current "wait-and-see" pause and this is likely to extend into April’s meeting. Oops !

Jobless Claims.

Weekly.

For week ending 04 Apr 2026, US weekly jobless claims rose to 219,000 claims. (see below)

This is up by +16,000 from prior week's upwards revised 203,000 and also above market consensus of 210,000.

The 4-week moving average expected edged up to 209,500.

Overall, the report hints at the "low-fire" environment of late 2025 may be seeing some early cracks.

Continuing.

For week ending 28 Mar 2026, continuing claims fell by -38,000 to 1.794 million, the lowest level since May 2024. (see above)

It is definitely lower than prior week’s unrevised 1.832 million and market consensus of 1.84 million.

Explanation for the reduction remains status quo. Either the unemployed are finding jobs OR they have exhausted their 26-week eligibility for jobless claims.

Perhaps the most “negative” theory is the median duration of unemployment has crept up to 11.4 weeks, the longest in nearly 4.5 years.

Indicating that while mass layoffs are not happening (low-fire), the labour market is becoming "sticky." It is becoming increasingly difficult for those who do lose their jobs to secure equivalent new positions.

What is puzzling to me is, there is no report detailing whether who have been laid off, have the qualifications or skills required of available jobs in the market.

Personal Consumption Expenditure (PCE).

US Fed’s inflation report for February 2026 provides a critical look at the US economy ‘before’ the rise of the Middle East conflict that will hit the data.

The report shows a US economy’s inflation numbers are "cementing" at levels well above the Fed’s 2% target, even before the full impact of the recent energy spike is taken into account.

While headline inflation remained steady on an annual basis, core inflation (Fed’s preferred gauge) surprised to the upside. (see below)

Headline inflation.

Stayed flat at 2.8% annually. This is due to February 2026 data only captures the very beginning of the oil price surge.

While gasoline and energy goods rose +1.4% MoM in the report, this was before oil price hitting the $120 /barrel mark seen in late March 2026.

Core inflation.

The "rise" of core monthly inflation from +0.3% to +0.4% is concerning for policymakers.

It is because latest readings marks the 3rd consecutive month of 0.4% gains, suggesting that "disinflation" has not only stalled but may be reversing.

Annual core rate rose by +0.1% to close at 3.0%, a level it has struggled to break below for several months.

Analysts are in agreement that February 2026 PCE report should be viewed as the last "moderate" report.

The March 2026 data (due late April 2026) is expected to show the full, aggressive impact of the $120 oil spike and disrupted global supply chains.

My viewpoints: (mine only)

The US economy is currently trapped between sticky 3% inflation and a cooling labour market where hiring has slowed significantly.

With consumers depleting their savings to keep up with rising costs, the Fed remains incapacitated to cut interest rates despite the economic slowdown, if it wants to keep inflation at bay.

This "higher-for-longer" reality will likely (a) limit US stock market gains and (b) keep volatility high as investors brace for weaker corporate earnings. Do you think so, too ?

US Economic reports due this week.

• 13 Apr 2026 - Existing home sales for March 2026

• 14 Apr 2026 - Producer price index (PPI) for March 2026..

• 15 Apr 2026 - Import price index for March 2026.

• 16 Apr 2026 - Jobless clams - weekly and continuing.

Except for US producer inflation reports, the others have minimal influence over US market sentiments.

What will be interesting is the quarterly earnings from the US big banks - Goldman Sacs, Citibank, JP Morgan, Morgan Stanley, Bank of America, ASML NV, TSM will be taking centrestage next week.

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