Good morning traders from a rain-swept but mellow Easter Sunday IntelliTrade desk, with Amsterdam sitting near 12°C in light rain before clearer skies later, so settle in with a strong coffee and keep the chocolate eggs within reach while we map the week ahead.
Overall Market Sentiment:
Market mood starts the week cautious rather than outright panicked. U.S. payrolls beat expectations, equities managed a weekly rebound, and OPEC+ is signaling more supply on paper, but the real market anchor is still oil and the inflation shock coming through energy.
That leaves the regime mixed but still defensive. The S&P 500 is nearly 6% below its late-January high, oil remains the market’s main macro input, and Friday’s U.S. CPI now looks like the week’s clearest test of whether March’s energy surge is already feeding into headline inflation.
Weekly Thesis:
The dominant question this week is whether the oil shock stays mostly in energy or starts leaking into broader inflation before growth meaningfully cracks. The base case is that headline inflation runs hot, central banks stay cautious, and activity data softens only gradually rather than collapsing. Our house view is that this keeps the dollar relatively well supported, leaves the euro and yen more exposed to energy stress, and makes Wednesday’s policy signals and Friday’s CPI the key week-ahead pivot points.
Scenario Map:
- Base case (55%): Oil stays high but broadly contained, CPI rises sharply on fuel, and central banks lean patient rather than reactive. That should keep USD supported, leave EUR and JPY under pressure for different reasons, and stop high-beta FX from sustaining a clean rebound.
- Risk-on scenario (20%): Hormuz headlines improve, OPEC+ supply messaging calms crude, and CPI proves less sticky outside energy. That would ease pressure on yields and the dollar, helping AUD, NZD, and EUR recover more cleanly.
- Risk-off escalation scenario (25%): Physical flows stay disrupted, oil pushes back toward the recent spike area, and CPI plus central-bank rhetoric keep the inflation scare alive. That would likely favor USD and CHF, keep equities under valuation pressure, and leave JPY torn between haven demand and terms-of-trade stress.
What Changed Since Last Week:
Payrolls came in much stronger than feared, but the details were softer than the headline, with weaker participation and slower wage momentum underneath. Equities managed a weekly bounce, yet oil stayed elevated and the latest OPEC+ increase still looks mostly symbolic while Hormuz remains impaired. That combination strengthened the inflation-first narrative and weakened the old assumption that the next big move from major central banks would soon be toward easier policy.
Geopolitics:
The geopolitical story is no longer just about headlines, it is about damaged supply routes and how long the energy system stays impaired. OPEC+ is signaling readiness to raise output, but the group also faces the reality that Hormuz disruption and Gulf infrastructure damage still limit what can actually reach market. Brent above the broad $105 to $110 zone remains the clearest macro reference because that area keeps inflation expectations sticky and leaves Europe especially exposed. Assumption: markets spend at least one more week pricing disrupted flows rather than an immediate return to normal shipping conditions.
Macro Calendar
The week ahead
- Sunday’s OPEC+ meeting sets the starting tone, but the bigger question is whether any quota change can matter while real export routes stay constrained.
- Monday’s ISM Services report is the first clean check on whether the U.S. domestic economy is still absorbing higher fuel costs without a broader demand break.
- Wednesday brings the March FOMC minutes and the RBNZ decision, which matters because markets want to see how central banks are thinking about an oil-led inflation shock that does not yet look like a full recession.
- Friday’s U.S. CPI is the week’s main macro event. Consensus looks for a 0.9% monthly headline rise and 0.3% core, so the market will be asking whether the problem is still mostly fuel or already broadening.
🔺 USD - Dollar supported, but CPI now matters more than payrolls
The dollar goes into the week with support from three places at once: stronger-than-expected payrolls, safe-haven demand, and the U.S. economy’s relative energy advantage. The payroll headline was strong enough to keep the Fed on hold, but the softer participation and wage details mean the market still needs inflation to stay firm to keep the dollar’s edge intact. That is why Friday’s CPI matters more now than last week’s payroll headline. The current bias stays supportive if oil remains elevated and core inflation does not cool meaningfully. What would change that bias is a cleaner geopolitical off-ramp plus softer inflation that pulls yields lower.
🔻 EUR - Euro still carries the clearest energy vulnerability
The euro enters the week with euro zone inflation back at 2.5%, energy prices up 4.9%, and markets again debating how soon the ECB may need to tighten. That sounds supportive on the surface, but the bigger issue is that Europe is still more exposed than the U.S. to the growth hit from high imported energy. This week there is no ECB meeting, so markets will mostly trade the euro through oil, rates, and expectations for the April or June policy path. EURUSD still looks centered on the 1.15 to 1.16 zone, with rallies needing calmer energy markets to hold. The bias improves if oil cools and core disinflation keeps progressing, but weak growth plus higher energy remains the harder mix for the single currency.
⚖️ GBP - Sterling still has rate support, but less cleanly
Sterling’s week-ahead story is still about inflation expectations versus growth strain. UK firms now expect to raise prices by 3.7% over the next year, while wage expectations have eased and staffing plans have turned negative, which leaves the Bank of England facing a more awkward mix than a simple inflation scare. That helps explain why sterling has held up better against the euro than against the dollar. GBPUSD still has the 1.32 to 1.33 area as the main reference zone, with 1.30 below as the broader support area markets watch. The tilt stays mixed, and it strengthens only if UK rates keep doing more work than global dollar demand.
⚖️ CAD - Oil helps, but the dollar still has the cleaner story
CAD still has one of the messiest setups in G10. Higher crude should help the loonie, but USDCAD near the 1.39 area tells you broad dollar demand and concern about slower growth are still dominating the usual terms-of-trade support. The Bank of Canada is on hold at 2.25% and has made clear it would react if energy-driven inflation becomes persistent, but for this week oil and U.S. yields still matter more than domestic nuance. The main reference zone remains 1.39 to 1.40 in USDCAD.
🔺 CHF - Franc still looks like the cleaner European haven
Near-term risks still lean toward a firmer CHF, especially against the euro. Swiss inflation rose to 0.3% in March on fuel costs, but that is still far below euro area inflation, which gives the SNB much less pressure to chase tighter policy and more room to focus on unwanted franc strength. That is why EURCHF remains the cleaner lens than USDCHF this week. The franc’s bias weakens only if energy stress eases enough for Europe to recover some relative footing.
🔻 JPY - Yen still squeezed between intervention risk and the oil problem
JPY remains one of the hardest currencies to frame cleanly. Markets are pricing a strong chance of another BOJ hike this month, and officials have made it clear they are ready to push back harder if yen weakness becomes disorderly, especially around the 160 area and beyond. But higher oil and elevated U.S. yields are still fundamentally difficult for Japan, which means the yen does not get a clean safe-haven benefit from this kind of shock. The current tilt still leans to yen weakness on fundamentals, but any move back toward 161 to 162 would raise the odds of sharper official resistance.
🔻 AUD - Aussie still behaves more like a risk proxy this week
AUD is still trading more as a risk and commodity-sensitive currency than as a pure RBA story. The RBA’s March hike to 4.1% and the chance of more tightening help at the margin, but the week’s bigger driver is whether oil and global sentiment keep squeezing cyclicals. The broad 0.68 to 0.69 area remains the zone markets watch in AUDUSD, and the bias improves only if energy stress cools enough for rate support to matter again.
🔻 NZD - Kiwi has the RBNZ, but global risk still dominates
NZD has its own policy catalyst this week, but the global backdrop still does most of the talking. Markets widely expect the RBNZ to leave the OCR at 2.25% on April 8, while inflation is already at 3.1% and the economy only grew 0.2% in the fourth quarter, which is not an easy mix for the currency. That leaves NZDUSD anchored around the broader 0.57 area, with the kiwi needing both a calmer global tone and a firmer policy message to improve more decisively. If the RBNZ stays patient and risk sentiment stays fragile, the downside bias likely remains.
Cross-asset wrap
- 🪙 Gold: Gold starts the week in the upper-$4,600s to upper-$4,700s area, below the April 1 spike to $4,784 but still far above where it traded before the latest oil shock. The main drivers are the dollar and real yields first, with geopolitics helping only when it eases rate fears rather than intensifying them. Watch next Friday’s CPI, because a cooler core reading would matter more for gold than another generic risk wobble. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: Silver sits in the low-$70s after a violent reset from its early-year extremes, and it is behaving more cyclically than gold. The main drivers are still the dollar and yields, but industrial demand and growth sentiment matter more here, which makes this week’s central-bank signals and CPI especially relevant. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent starts the week above the $109 area and still not far from the recent run toward $120. Supply disruption and Hormuz logistics are the first drivers, while OPEC+’s quota hike matters mostly as a signal because real physical output remains constrained. Watch next any concrete evidence that shipping normalizes, because that matters more than headline intentions on output. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: The S&P 500 finished Thursday at 6,582.69, up 3.36% on the week but still nearly 6% below its late-January high. The main drivers are oil, inflation expectations, and the idea that fewer Fed cuts leave valuations less protected, while defensives have been doing relatively better in the rebound. Watch next Friday’s CPI and the first earnings read-throughs on fuel and consumer margins. [RATES] [EARNINGS] [RISK]
- ₿ Crypto: Bitcoin is around $66,854, trading today between roughly $66,624 and $67,487, so volatility is present but still modest relative to the broader macro noise. The main drivers remain liquidity, real yields, and general risk appetite, which means crypto is still behaving more like a macro-sensitive asset than a standalone hedge. [LIQUIDITY] [YIELDS] [RISK]
This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.
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