This week in the markets: investors hold their breath as the deadline for a deal between Iran and the US approaches.

The Middle East conflict has entered its sixth week - but it is still very unclear what happens next.

Over the Easter break, President Trump gave Iran a deadline of 8pm today (Washington time) to reopen the Strait of Hormuz or face fresh attacks on civilian infrastructure like bridges and power plants. This could have a significant human impact.

Amid the uncertainty, markets are fairly stable this morning. Nobody knows for certain how Iran will react or whether the US will follow through on its threats. This is not the first deadline, after all.

Asian stock markets are a particular concern for investors at the moment. After a great 2025, Asian stocks have fallen sharply over the past month, underperforming their US and European counterparts. This is because Asia gets about 60% of its crude oil from the Middle East, meaning it is very exposed to higher energy prices.

Currency pressures have started to emerge, particularly in oil-sensitive economies like India and Thailand. Governments are trying to help. For example, the Reserve Bank of India has taken action to prop up the rupee and authorities in Japan have stepped up their yen intervention threats.

Asian economies are not the only ones affected, of course. On Friday, we will get a glimpse of how the Middle East conflict is affecting inflation in the US.

Analysts are expecting the headline rate of inflation to jump from 2.4% in February to over 3% in March. The US is more insulated from an energy crisis than Asia and Europe, as it has plenty of its own resources, but it is unlikely to emerge unscathed.

Inflation has a direct bearing on interest rates. For now, bets that the Bank of England and Federal Reserve will increase rates in response to the conflict have been scaled back. However, fears of ‘stagflation’ loom large.

We will learn more later this month. The Bank of England is due to announce its next interest rate decision on Thursday 30 April. It held rates at 3.75% in March following a unanimous decision from the Monetary Policy Committee. The Federal Reserve will report its own decision on Wednesday 29 April.

In the meantime, mortgage rates in the UK have been rising. The average two-year fixed rate has jumped from 4.8% at the start of March to well above 5% today. Mortgage borrowers coming to the end of five-year fixed deals face a particularly nasty shock, as they would have secured their previous deals when the base rate was just 0.1%.

Economic news in the UK is fairly light following the Easter break. As we push into a new tax year, though, people are thinking about what to put in their ISAs and pensions.

It is a nerve-wracking time to be making money decisions. If you cast your mind back to last April, though, the world was reeling from ‘Liberation Day’. America’s sweeping tariff regime threatened to upend global trade and caused markets to briefly tumble. A year later, our worst fears have not been realised.

That’s not to underplay the significance of the Middle East conflict - or the human cost. It is simply a reminder that events can unfold very quickly, and trying to time the market is often a fool’s errand.