“April 6 Military Shock” and “April 10 CPI Shock”
— Markets Face a Two-Stage Impact Driven by WTI, Interest Rates, and Accelerating Inflation**
■ Executive Summary (Today’s Conclusion)
Next week, global markets will confront a two-stage shock:
- April 6 (Mon, U.S. time): The “Trump Deadline” and the risk of a military shock, and
- April 10 (Fri): The U.S. CPI shock.
The primary focus is:
① The risk of a WTI spike surrounding the April 6 military shock.
And even if no military action materializes, markets will immediately face:
② Accelerating inflation in Friday’s CPI → A resurgence of rate-hike fears.
In other words:
“Whether a military shock occurs or not, next week will be volatile.”
This structure is already in place.
**1. Market Overview This Week:
Only Crude Oil Has Priced in the Reality of War**
As shown in my Global Financial Markets Data Table (as of April 3), this week’s market behavior can be summarized in three points.
(1) Equities: The U.S. rebound is merely a “reluctant bounce”
The NASDAQ rose +4.4%,
but this is nothing more than a technical rebound below the 200-day moving average.
Markets continue to rely on wishful assumptions:
- “The war won’t drag on,”
- “Trump will strike a deal at the last minute.”
Yet the latest developments in the Middle East point to deterioration, not stabilization.
(2) Bonds: The key message is that yields simply “do not fall”
The U.S. 10-year yield dipped slightly to 4.34%,
but this was purely a pre-holiday technical move.
Given the strength of the employment report,
yields are likely to retest the mid-4.5% range next week.
(3) Commodities: WTI is the only asset telling the truth
- WTI: $111.54 (+11.9%)
- Gold: +3.4%
Only the crude oil market is correctly pricing:
- supply risks,
- attacks on Gulf infrastructure,
- and the ongoing Hormuz Strait disruptions.
**2. U.S. Employment Shock:
A “Death Sentence” for Rate-Cut Expectations**
Last night’s U.S. employment report underscored a critical fact:
“Even in wartime, the U.S. labor market remains resilient.”
- Nonfarm payrolls: +178,000 (vs. +65,000 expected)
- Unemployment rate: 4.3% (vs. 4.4% expected)
- Labor participation: Lowest since 2021
This is not a sign of “strong growth,”
but rather a wall preventing rate cuts.
As a result,
the importance of Monday’s ISM report has diminished.
Markets have already concluded:
“Rate cuts are off the table for now.”
**3. April 6 (Mon): The “Military Shock”
— The Key Focus Next Week Is the Risk of a WTI Spike**
Integrating yesterday’s emergency report with the latest developments:
(1) U.S. aircraft downed, Gulf infrastructure attacked, Hormuz still disrupted
Recent reports indicate:
- A U.S. aircraft shot down
- Attacks on Gulf energy infrastructure
- Tanker attacks
- Continued Hormuz disruptions
Trump’s remark about sending Iran “back to the Stone Age”
should be interpreted not as rhetoric,
but as a signal of operational readiness.
(2) WTI could test the $120 range
If a military shock materializes:
- WTI could surge into the $120s,
- Brent could test $115–118.
This would trigger:
Inflation acceleration → Higher yields → Equity sell-off
(3) Why markets will be shaken even if no military action occurs
This is the most important point.
Even without military escalation, markets remain unstable because:
- WTI is already above $110
- The employment report was too strong for the Fed to cut rates
- “Postponing” a military shock is the scenario markets fear most
Thus:
Whether a military shock occurs or not, WTI will remain elevated and markets will remain volatile.
**4. April 10 (Fri): The “CPI Shock”
— What Markets Fear Most Is the Core CPI MoM**
Current consensus:
- Headline CPI (MoM): +0.3%
- Core CPI (MoM): +0.2–0.3% (centered at +0.3%)
The market’s greatest fear is:
Core CPI MoM exceeding +0.3%.
(1) +0.2% → No problem (markets remain calm)
- Inflation sticky but not reaccelerating
- No discussion of rate hikes
- Yields stable
(2) +0.3% → Markets can tolerate it, but caution rises
- Confirms inflation stickiness
- Yields drift higher
- Equities unstable but not collapsing
(3) Above +0.3% → A sudden resurgence of “rate-hike fears” (worst-case scenario)
This would be the most damaging outcome:
- U.S. 2-year yield spikes toward 4.8–5.0%
- USD/JPY heads toward 162
- NASDAQ breaks sharply below its 200-day line
- Nikkei opens with a gap-down on Tuesday
- Gold whipsaws violently
In short:
This is the moment when the long-dormant “rate-hike fear” returns.
**5. Next Week’s Market Scenarios:
Prepare for the Two-Stage Shock (April 6 → April 10)**
(1) April 6 (Mon) = First Wave (Military Risk)
- Crude oil: Likely to test $115–120
- Yields: Could rise depending on ISM
- Equities: NASDAQ at risk of breaking below its 200-day line
- FX: USD/JPY toward 160.8–162
(2) April 10 (Fri) = Second Wave (CPI Shock)
**If Core CPI MoM exceeds +0.3%,
markets will not merely “lose rate-cut expectations”—
they will face a full-scale revival of “rate-hike fears.”**
**6. Conclusion:
Markets Awakened by the Employment Shock,
Tested by the CPI Shock**
This week,
only WTI told the truth,
while equity markets continued to look away.
But last night’s employment report forced markets to confront
the reality of higher-for-longer interest rates.
Next week brings:
- April 6 (Mon): The Military Shock, and
- April 10 (Fri): The Inflation Shock.
A two-stage impact is now unavoidable.
As practitioners,
we must monitor—calmly and relentlessly—
the interplay between data, military developments, and accelerating inflation.
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