Week to date since April 22, 2026 as of April 29, 2026

^{Index definitions: Global Real Estate = FTSE EPRA/NAREIT Developed Index; Global Infrastructure = Dow Jones Brookfield Global Infrastructure Index; Natural Resource Equities = S&P Global Natural Resources Index; Commodity Futures = Bloomberg Commodity Index; TIPS = Barclays US TIPS Index; Global Equities = MSCI World Index; Real Assets Index = 30% FTSE EPRA/NAREIT Developed Index, 30% Dow Jones Brookfield Global Infrastructure Index; 15% S&P Global Natural Resources Index; 15% Bloomberg Commodity Index, 10% Barclays TIPS Index. Source: Bloomberg, DWS. Past performance is not indicative of future results. It is not possible to invest directly in an index.}

Market commentary

Markets have been balancing an AI-led technology surge against an energy backdrop that seems anything but settled. Upcoming quarterly results may prove less representative of summer market direction than the outstanding known unknowns. Still to be decided is the impact of the impaired Strait of Hormuz, Brent’s move higher, and jet fuel prices in Singapore and Rotterdam have risen to a level two-times their pre-war level.^[1]​ There are visible investor-related tensions elsewhere: China’s electric vehicle (EV) price war has intensified, a leading AI company missed internal user and revenue targets, and the April Federal Open Market Committee (FOMC) meeting produced four dissents for the first time since October 1992. On the positive economic side, confirming earlier indicators the U.S. economy reportedly grew at a 2.0% annualized rate in 1Q. GDP growth was supported by a sharp rise in business investment, particularly in AI-related equipment and software spending.^[2]​ We’d be remiss not to point out the Dallas Fed’s Weekly Economic Index’s rolling 13 week moving average (one quarter) hit its highest level since 2022 suggesting strong economic momentum hence any respite in energy prices could provide further longevity to the growth cycle.

For the period, Real Assets outperformed Global Equity returns. In global equities, the positive performance was driven by the Energy, Technology, Utilities, and Consumer Staples sectors. However, the returns were not enough to overcome negative performance in the Materials, Health Care, Consumer Discretionary, and Financials segments. Within Real Assets, Commodity Futures and Global Infrastructure securities outperformed, while Natural Resource Equities, Global Real Estate Securities, and U.S. TIPS (Treasury Inflation Protected Securities) underperformed. Across other market indicators we track, the VIX, a measure of 30-day expected stock market volatility, fell 0.6% to end the period at 18.8. Breakeven yields, a measure of implied inflation, were flat in the 5-year segment and rose 8 bps in the 10-year segment. Gold prices fell -4% to end at $4,548/ounce. Brent oil prices rose 15% to end the period at $106.88/barrel. The U.S. dollar strengthened 0.4% against major trading partners. Credit spreads widened 2 bps for investment grade and 6 bps for high yield credits.^[1]​

Why it matters: We continue to monitor the data to see if conflict-driven damage to the economy extends past a temporary phase to hamper growth or drive inflation for 2026. Capital markets are still absorbing higher energy prices, disrupted shipping through the Strait of Hormuz, a more uncertain central bank backdrop, and a technology cycle that remains powerful but increasingly difficult to separate from broader inflation and earnings risks.

This week we will review the latest data developments covering inflation, central banks, and sentiment indicators.

• Prices: Inflation readings continue to show the impact of higher energy prices. In Australia, 1Q 2026 headline CPI rose 1.4% q/q and 4.1% y/y, up from 0.6% q/q and 3.6% y/y in the December quarter of 2025. In March, headline inflation rose 1.1% m/m to 4.6% y/y from 3.7% in February. Automotive fuel, up 32.8% m/m, was the largest contributor and supported the transport group, which rose 9.2% m/m.^[3]​ In Japan, March headline CPI came in at 1.5% y/y after 1.3% in February, as rising fuel prices were tempered by subsidies.^[4]​
• Central Banks: The April FOMC meeting was notable on several fronts. It was described as historic, marked by four voting dissents for the first time since October 1992. Stephen Miran favored a 25-basis-point rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan supported holding rates at 3.5%–3.75% but objected to the statement’s easing bias. The document also states that Jerome Powell said he would remain on the Board of Governors after stepping down as Chair. In Europe, the ECB is expected to keep key interest rates unchanged, with the latest document emphasizing data dependency, meeting-by-meeting decisions, and no pre-commitment on the future path of rates. In Canada, the Bank of Canada held the overnight policy rate at 2.25%, judged the growth outlook to be “little changed” versus January, and said inflation is likely to be slightly higher in the near term because of higher energy prices, while still seeing little evidence of broad pass-through so far.^[1]​
• Survey says: Survey-based indicators painted a mixed picture. In China, the official NBS manufacturing PMI edged down to 50.3 from 50.4 in March, while the RatingDog manufacturing PMI rose to 52.2 from 50.8, reflecting stronger new orders and production. The official non-manufacturing PMI fell to 49.4 from 50.1, with both services and construction contracting.^[5]​ In the U.S., the Conference Board’s Consumer Confidence Index rose to 92.8 from 91.8.^[6]​ In Germany, the April ifo business sentiment index fell sharply to 84.4 from 86.3, with both current conditions and expectations deteriorating, and the document describes this as the worst decline since the pandemic.^[7]​

Real Assets, Real Insights: This week we look at a rumored merger in the residential real estate investment trust (REIT) area, EU legislation that could help the infrastructure sector, and further impacts from the Iran war on soft commodities.

• Apartment complex (Real Estate): Press reports suggest AvalonBay Communities and Equity Residential, the two largest apartment REITs in the U.S. by market value, are considering a merger . Each firm has a market capitalization near $25 billion and together they control almost 200,000 units, mainly in urban coastal markets. Their portfolios are similarly sized, with AvalonBay spanning more than 300 properties and 100,000 units across 11 states, while Equity Residential holds over 300 properties and around 85,000 units in six states. Despite their housing segment leadership, both companies have struggled with slow rent growth and declining stock prices over the past year. Talks are in the early stages, but if successful, this deal would be one of the largest in U.S. real estate history and could face regulatory scrutiny given the companies' scale and influence in the apartment market.^[1]​
• Step on the gas (Infrastructure): The European Commission unveiled AccelerateEU, a package designed to respond to the energy risks stemming from the Gulf conflict while speeding up Europe’s transition away from fossil fuels. The plan combines near-term energy security measures with longer-term electrification and clean energy investment initiatives, reflecting concerns that gas supply disruptions and elevated energy prices could weigh on the EU economy for years. The package highlights the EU’s attempt to balance energy security, industrial competitiveness, and decarbonization. As with many government initiatives, the biggest constraint will likely be funding. The broader Clean Industrial Deal is estimated to require around EUR200bn per year of public money, with only about half potentially covered by carbon market revenues. The remainder would need to come from borrowing, taxes, or higher end-user prices, while private investment needs are more than double that amount. In short, delivery likely will depend less on ambition and more on whether the EU can credibly mobilize both public and private capital at scale. This additional fiscal push could add further support to infrastructure investments.^[8]​
• The touch, the feel (Commodities): Another impact of the war in Iran has been a sharp jump in the price for cotton, reversing a downward trend seen since the fourth quarter of 2024. Rising oil prices have contributed to increased input costs for synthetic fabrics derived from petroleum products, enhancing cotton’s relative attractiveness. Meanwhile, as demand has remained unexpectedly steady, cotton-growing areas in the U.S. are facing drought conditions, while farmers have planted less acreage this year. The input costs (i.e. fertilizer) have also risen, as well as transportation costs, further discouraging increased planting.^[1]​, ^[9]​