24.03.2026 - First signs of economic damage
March PMI (Purchasing Managers’ Index)* readings are beginning to reflect what wars eventually trigger far beyond the battlefield: rising uncertainty, weaker demand, and more cautious corporate behavior.
Across Europe, growth momentum is clearly fading:
Germany’s private-sector activity slowed to a three-month low
France contracted at its fastest pace since October
The UK recorded its weakest reading since September
In the US, the picture is similar. The service sector, previously the key driver of resilience, is now weakening more visibly. Manufacturing instead, sees a slight uptick.
This suggests that the Middle East conflict is no longer just a geopolitical risk, it is increasingly feeding into real economic activity, already after 3 weeks after the conflict started.
Markets: moving reverse to yesterday’s relief rally
Equities: Asian markets followed the US rebound this morning, but globally equities are lower again, giving back most of the previous gains
Bonds: yields higher - US 10-year Treasury yield at 4.40% (+5bps)
Commodities: oil prices resume its upward trend moving towards pre Trump post level - WTI crude oil above USD92/barrel and Brent towards USD 104/barrel. Precious metals remain stable with silver at USD 69/oz and gold above USD 4’400/oz
Currencies: USD stronger again
Cryptos: broadly falling - Bitcoin falling below USD 70k
Volatility: The VIX is up again to 28
My View: What stands out is the shift in growth dynamics:
The service sector — the backbone of recent economic resilience — is now showing clearer signs of weakness than manufacturing. This is a meaningful change and typically an early warning signal.
Markets, however, continue to oscillate between optimism and reality, heavily driven by headlines rather than fundamentals.
As highlighted in my latest Weekly Market Snapshot, the Nasdaq is trading near the lower bound of its sideways range. A break below this level could trigger a more pronounced sell-off, driven by systematic and technical strategies. In such an environment, moves tend to accelerate quickly.
At the same time:
Oil prices remain a key risk driver. Without a resolution around the Strait of Hormuz, a second leg higher remains likely
Rising yields are tightening financial conditions further, adding pressure on valuations and future refinancing
Precious metals may stay volatile short-term, but the broader setup remains constructive, pullbacks could present opportunities
Overall, the environment remains highly fragile: Too many risks are currently building up, geopolitical, macro, and technical.
This is not the time to aggressively deploy cash into risk assets.
*PMI (Purchasing Managers’ Index) is considered a leading indicator for economic activity. A reading below 50 signals contraction, while a reading above 50 indicates expansion.
Become a member to access more valuable market updates like this
