The proof is in the PMI: Purchasing Managers’ Indexes across Europe and Asia for this month are the latest evidence of the global economic slowdown caused by the regional war, according to a spate of recent reports from across the world.

Private sector activity in the eurozone (pdf) dropped to a 10-month low in March, with the composite PMI falling to 50.5 from 51.9 in February, barely above the 50 threshold that separates growth from contraction. The reading fell short of economists polled by Reuters, who had penciled in 51.

A closer look: Manufacturing held up slightly better, but services are starting to stall. Some of the strength in manufacturing was chalked down to frontloading orders to beat future supply chain issues, which could lead to weaker data later on, S&P director and economist Phil Smith told Morningstar.

Results are similarly bleak elsewhere: Australia’s PMI saw a sudden contraction, while business confidence in Japan (pdf) dropped to its lowest level in nearly a year. India (pdf) registered its weakest growth since 2022 as war-driven inflation bites, and the UK’s (pdf) private sector activity came in at its lowest level in six months.

As expected, energy volatility is primarily behind the results. Companies are reporting the fastest rise in input costs in three years, as attacks on oil infrastructure and the Strait of Hormuz disruption propel the energy sector into panic. Rising oil prices are pushing up costs for businesses, disrupting supply chains, and feeding through into inflation, with supplier delays also increasing sharply due to shipping disruptions.

Yet again, it’s another symptom of stagflation as slow economic growth colludes with inflation. The phenomenon has already hit the bond market, wiping USD 2.5 tn off global bond values and making investors think twice about where to hedge their bets.

Where do we go from here? In short, everything depends on how long the war lasts. While indicators pointed to global growth gathering momentum pre-war, the conflict has turned predictions on their head, Director of Global Economics at Bloomberg Jamie Rush said. Even if a ceasefire is agreed tomorrow, the damage is already done, with a European Central Bank statement pointing to higher inflation risks and slower economic growth.

MARKETS THIS MORNING-

Asia-Pacific markets are a sea of green in early trading this morning, with Japan’s Nikkei and South Korea’s Kospi leading gains — both are up around 2.5% — as hopes that the US-Iran war will soon conclude drive the rally.

TASI

10,949

0.0% (YTD: +4.4%)

MSCI Tadawul 30

1,479

-0.1% (YTD: +6.6%)

NomuC

22,492

-1.1% (YTD: -3.5%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

4.25% repo

3.75% reverse repo

EGX30

46,931

-1.4% (YTD: +12.2%)

ADX

9,524

+1.1% (YTD: -4.7%)

DFM

5,471

+1.6% (YTD: -9.5%)

S&P 500

6,556

-0.4% (YTD: -4.2%)

FTSE 100

9,965

+0.7% (YTD: +0.3%)

Euro Stoxx 50

5,581

+0.1% (YTD: -3.6%)

Brent crude

USD 104.49

+4.6%

Natural gas (Nymex)

USD 2.90

-1.3%

Gold

USD 4,514

+1.8%

BTC

USD 70,359

-0.6% (YTD: -19.7%)

Sukuk/bond market index

912.53

-0.5% (YTD: -0.7%)

S&P MENA Bond & Sukuk

148.45

-0.5% (YTD: -2.3%)

VIX (Volatility Index)

26.95

+3.1% (YTD: +80.3%)

THE CLOSING BELL: TADAWUL-

The TASI remained unchanged yesterday on turnover of SAR 8.5 bn. The index is up 4.4% YTD.

In the green: Bawan (+10.0%), MESC (+7.3%), and APC (+7.1%).

In the red: Amak (-7.4%), Arabian Drilling (-6.9%), and Maaden (-6.8%).

THE CLOSING BELL: NOMU-

The NomuC fell 1.1% yesterday on turnover of SAR 20.7 mn. The index is down 3.5% YTD.

In the green: Tharwah (+10.3%), DRC (+9.7%), and Ngdc (+9.5%).

In the red: Mayar (-16.1%), Mobi Industry (-10.7%), and Apico (-9.6%).

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