The University of Michigan’s Consumer Sentiment Index was revised up to 49.8 in April 2026 from an initial estimate of 47.6, according to final data. Despite the slight improvement, this remains the weakest reading on record, reflecting the heavy toll of the Iran conflict on consumer morale. Sentiment declined across all demographics, regardless of political affiliation, income, age, or education. Expectations for business conditions deteriorated for both the short and long term, nearly matching levels seen a year ago when reciprocal tariffs were introduced. While the two-week ceasefire and a slight dip in gasoline prices helped sentiment recover a fraction of its early-month losses, the conflict’s primary impact on consumers stems from energy and broader price shocks. Inflation expectations surged, with year-ahead expectations jumping to 4.7% from 3.8%, the largest one-month increase since April 2025, while long-term expectations climbed to 3.5%, the highest since October 2025.

Retail sales in Canada are estimated to have increased 0.6% month-over-month in March 2026, according to a preliminary estimate. If confirmed, it would mark a third consecutive month of gains in retail sales. In February, retail sales were up 0.7%, below an initial estimate of a 0.9% rise, with sales up in seven of nine subsectors. Sales at motor vehicle and parts dealers increased 1%, led by sales at new car dealers (+0.7%), followed by used car dealers (+4.0%). Sales at gasoline stations and fuel vendors were unchanged in February. Meanwhile, core retail sales rose 0.6%, posting their second consecutive increase. The gain was led by higher sales at general merchandise retailers (+1.2%) and food and beverage retailers (+0.9%). Higher sales were also recorded at clothing, clothing accessories, shoes, jewelry, luggage and leather goods retailers (+1.1%). The largest decrease came from building material and garden equipment (-0.6%).

The dollar index fell below 98.6 on Friday, paring an earlier rise, as traders continued to focus on developments in the Middle East. Al Jazeera reported that government sources indicated a “high likelihood of a breakthrough” in US–Iran talks in Islamabad, with a delegation led by Iran’s Foreign Minister expected to arrive in the Pakistani capital tonight. In addition, US President Trump announced a three-week extension to the ceasefire in Lebanon, which was due to expire on Sunday. Still, the greenback is up about 0.7% on the week, its first weekly gain in three weeks, as the stalemate in US–Iran talks and the near closure of the Strait of Hormuz continue to support higher oil prices and add to inflationary pressures, prompting traders to reassess the interest rate outlook. The Fed is widely expected to keep the federal funds rate unchanged next week, with no further rate changes anticipated for the remainder of the year.

WTI crude oil futures slipped to $94.8 per barrel on Friday, reversing earlier gains and snapping a four-session winning streak as hopes of diplomatic progress between the US and Iran improved sentiment. Reports indicated Iranian Foreign Minister Abbas Araghchi was expected to arrive in Islamabad, with sources suggesting a high likelihood of a breakthrough in negotiations involving mediators such as Pakistan. Despite the pullback, oil remains on track for a weekly gain of about 14%. Markets continue to be influenced by US policy signals, including President Donald Trump’s continuation of a naval blockade on Iranian ports, which has restricted crude exports from the Persian Gulf since the conflict began. The blockade remains a key obstacle in negotiations. A sanctioned tanker carrying Iranian oil was also seen attempting to leave the Strait of Hormuz, highlighting ongoing tensions in the vital shipping route that has seen sharply reduced flows since the war began.

The Bank of Russia cut its policy rate by 50bps to 14.5% in its April 2026 decision, as expected by markets, and signaled that the cutting cycle is likely close to ending. The move marked the eighth consecutive rate cut since departing from the record-high rate of 21% in June last year. The Board of Directors indicated it sees inflation expectations easing from their assessment in the previous meeting, adding room for looser financial conditions. The Board also noted that tax increases in the first quarter of the year slowed the Russian economy, which the government passed to finance its war in Ukraine and fiscal stimulus to aid consumers in Russia's sanction-hit economy. Pro-inflationary risks continued to prevail over disinflationary risks, resulting in the signal that there might not be room for more cuts. Still, policymaker suggested that expansion in aggregate supply capacity, which was pressured since the war, may expand with lower rates, reducing limiting inflationary concerns.

Germany’s Ifo Business Climate Index declined 1.9 points to 84.4 in April 2026, marking its lowest level since May 2020 during the COVID-19 pandemic and falling short of market expectations of 85.5. The decrease was mainly driven by a significant drop in future expectations, which fell to 83.3 from 85.9, highlighting growing concerns about the impact of the ongoing Middle East conflict on Germany’s already fragile economic recovery. Additionally, the assessment of current conditions also worsened, decreasing to 85.4 from 86.7. Sector sentiment in Germany has weakened across all major industries. Manufacturing fell to -15.5 (from -14.4), driven by pessimism in the chemical sector. Services dropped sharply to -11.0 (from -5.1), with logistics under particular strain. Trade plunged to -32.6 (from -24.6) amid fears of inflation curbing consumer spending, while construction declined to -24.0 (from -15.0) as recovery hopes faded.