Good morning traders from a warm Amsterdam morning at the IntelliTrade HQ. Grab a coffee because this week is one of those weeks where the calendar matters, but the headlines can still steal the show before the data even arrives.
Overall Market Sentiment
This Monday feels different from last Monday.
Last week was about digesting the Fed minutes. This week starts with the market asking a much harder question: does inflation still matter more than growth?
Over the weekend, geopolitical tensions picked up again, oil opened higher, and the dollar found fresh support as traders moved into defensive positioning ahead of tomorrow’s U.S. CPI report. That matters because higher energy prices arriving just before an inflation release make the market much more sensitive to surprises.
The mistake here would be assuming today’s direction tells us the rest of the week. I would not overcomplicate Monday price action. Most markets are positioning ahead of Tuesday rather than expressing strong conviction today.
Geopolitics
Geopolitics is impossible to ignore this morning.
Renewed tensions involving Iran have pushed energy markets back into focus, with Brent crude moving higher as concerns around Strait of Hormuz shipping returned. Even if the situation does not escalate further, the market now has to ask whether energy inflation becomes part of this week’s CPI discussion.
For FX, this mainly supports the dollar through defensive flows while making life more difficult for energy-importing economies.
Macro Calendar
Today
- Markets are mainly positioning ahead of tomorrow’s U.S. CPI rather than reacting to today’s lighter calendar.
- OPEC’s monthly oil market report will be watched for any changes to supply and demand expectations.
- Geopolitical headlines remain an active market driver throughout the session.
The rest of this week
- Tuesday brings U.S. CPI, easily the most important macro release of the week.
- Fed Chair Kevin Warsh begins congressional testimony, giving markets fresh insight into the Fed’s current thinking.
- Wednesday brings U.S. PPI and the Bank of Canada’s policy decision.
- Thursday shifts attention toward U.S. retail sales and weekly jobless claims.
- China GDP and activity data continue to matter for commodity-linked currencies as the week develops.
⚖️ USD - A stronger floor, but still waiting for confirmation
The dollar has started the week on firmer footing.
Part of that comes from higher oil, part comes from geopolitical uncertainty, and part comes from traders reducing risk before CPI. Those are very different drivers, which is why I would be careful about calling this the start of another sustained dollar rally.
The cleaner read for me is simple. If inflation surprises higher tomorrow, USD has room to stay supported. If CPI disappoints, today’s strength could unwind surprisingly quickly.
🔻 JPY - Still the currency under the most pressure
JPY remains the currency I care about most this week.
The yield gap has not disappeared, oil is moving higher again, and USD/JPY is still trading in territory that keeps intervention discussions alive. Those three factors are working together instead of cancelling each other out.
That is why I still think traders underestimate how quickly sentiment around the yen can change. The macro story still favours weakness, but political tolerance for further weakness is becoming increasingly important.
⚖️ EUR - Following the dollar more than leading itself
The euro is not weak.
It is simply struggling to build its own story while markets focus on U.S. inflation and geopolitics. Until those themes settle down, EUR/USD is likely to remain driven more by the dollar than by Europe itself.
⚖️ GBP - Holding together reasonably well
Sterling continues to show resilience.
The UK story has not changed dramatically over the weekend, so GBP is mainly reacting to broader dollar strength rather than domestic developments. Relative performance remains respectable, but this is not really a sterling-driven market today.
⚖️ CAD - Oil helps, but the story is bigger than oil
CAD naturally benefits from firmer crude prices.
The mistake here would be stopping the analysis there. Oil is rising because geopolitical risk has increased, not because global demand has suddenly accelerated. Those are very different environments for the Canadian dollar.
This week’s Bank of Canada decision now becomes even more interesting because policymakers also have to navigate that changing inflation backdrop.
⚖️ CHF - Quiet, but worth watching
CHF is behaving exactly how I would expect.
The franc is attracting modest defensive interest without becoming the centre of attention. If geopolitical risk eases, CHF probably fades back into the background. If tensions increase, it can quickly become much more relevant.
⚖️ AUD - Waiting for China and global risk
AUD is still trading more like a global growth currency than a domestic Australian story.
China data later this week remains important. A softer U.S. CPI alone may not be enough to create a lasting AUD recovery if confidence around Chinese growth remains mixed.
🔺 NZD - Still carrying the RBNZ advantage
NZD continues to benefit from last week’s RBNZ decision.
Among the commodity currencies, it still has the clearest domestic policy support. That does not make it immune to global volatility, but it does leave NZD with a stronger underlying story than AUD at the moment.
Cross-Asset Wrap
- 🪙 Gold: Gold is trading around the $4,050 to $4,100 area after giving back some recent gains. Higher real yields and a firmer dollar are offsetting traditional safe-haven demand. Watch whether tomorrow’s CPI shifts real-yield expectations. [USD] [REAL YIELDS] [INFLATION]
- 🥈 Silver: Silver remains near the $59 to $60 area, underperforming gold as industrial demand expectations remain mixed. China data later this week could become increasingly important. [USD] [GROWTH] [INDUSTRIAL DEMAND]
- 🛢 Oil (Brent): Brent is trading around the upper-$70s after renewed Middle East tensions lifted the geopolitical risk premium. Markets remain focused on shipping disruption, supply risks and tomorrow’s inflation implications. [OIL] [GEOPOLITICS] [INFLATION]
- 📈 Stocks: Equity futures are softer as investors reduce risk before CPI while also monitoring geopolitical developments. Technology leadership remains intact, but broader market participation has become more cautious. [RISK] [EARNINGS] [INFLATION]
- ₿ Crypto: Bitcoin is trading around the mid-$63,000 area. The market remains sensitive to liquidity expectations, dollar direction and tomorrow’s inflation report more than crypto-specific news. [LIQUIDITY] [USD] [RISK]
Want to turn this market context into a trading plan?
Check today’s Currency Strength Meter and Economic Calendar inside IntelliTrade Pro.
This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.
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