Iran Deadline Approaches: Markets Stabilize

The Middle East conflict has now entered its sixth week. Over the Easter break, President Trump set a deadline for Iran to reopen the Strait of Hormuz by 8pm Eastern time.

Military deadline and regional risk

The US warned of fresh attacks on civilian infrastructure if the strait remains closed. Bridges and power plants were cited as potential targets. The move raises clear humanitarian and strategic concerns.

Officials say uncertainty remains over how Iran will respond. This is not the first ultimatum in the crisis, increasing unpredictability.

Markets and Asia under strain

Global markets opened relatively calm despite the tensions. In some regions, the outlook is more fraught.

After a strong 2025, the MSCI Asia Pacific index has fallen sharply over the past month. The region has underperformed US and European peers.

Asia imports roughly 60% of its crude oil from the Middle East. That dependence leaves it vulnerable to higher energy prices.

Currency pressure has surfaced in oil-sensitive economies. India and Thailand are notable examples.

• The Reserve Bank of India has intervened to support the rupee.
• Japanese authorities have increased warnings about yen intervention.

With the deadline approaches, markets stabilize in some trading sessions. Still, volatility risks remain as diplomats and traders wait for a response.

Inflation, central banks and stagflation fears

On Friday, US inflation data will offer fresh clues on the economic impact. Analysts expect headline inflation to rise from 2.4% in February to above 3% in March.

The US is better insulated from an energy shock than Asia and Europe. Still, an impact on inflation seems likely.

Higher inflation would influence interest-rate expectations. Market bets that the Bank of England and Federal Reserve will hike rates have been scaled back.

Fears of stagflation—rising prices with weak growth—are growing. Policymakers will watch incoming data closely.

Key central bank dates

The Federal Reserve will announce its decision on Wednesday 29 April. The Bank of England is set to decide on Thursday 30 April.

The BoE held rates at 3.75% in March after a unanimous Monetary Policy Committee vote. Markets will assess whether that stance changes.

UK mortgages and the new tax year

UK mortgage costs have risen since March. The average two-year fixed rate climbed from 4.83% at the start of March to well above 5%, according to Moneyfacts.

Borrowers coming off five-year fixes face a sharp increase. Many secured previous deals when the base rate was 0.1%.

Economic news in the UK is otherwise light as the new tax year begins. Investors are weighing ISA and pension allocations in uncertain markets.

Looking back and forward

A year ago, global markets feared major trade disruptions from Washington’s tariff policies. Markets later steadied and the worst scenarios did not materialize.

The current crisis shows how quickly conditions can change. Timing the market remains difficult.

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