Good morning traders from a rainy and gusty IntelliTrade HQ, with Amsterdam near 7°C under passing showers and an early wind warning as we settle in with the first coffee and work through another headline-heavy market morning.
Overall Market Sentiment:
The mood is mixed, with a relief bias. Lower oil and slightly softer yields are helping equities recover, but conviction is still thin because the market does not yet trust that Middle East tensions are truly moving toward a durable pause.
Markets are still trading the same macro chain, just with a little less panic this morning: oil drives inflation expectations, inflation expectations shape rate pricing, and rate pricing spills into FX and risk assets. Even after today’s bounce in equities and pullback in crude, markets still lean toward fewer Fed cuts, tighter-for-longer thinking elsewhere, and fragile headline-driven price action.
Geopolitics:
Geopolitics remains the central driver. Reports that Washington is pushing a one-month ceasefire plan have knocked Brent back below the $100 area, but Tehran is still denying direct talks and the market remains unsure about how quickly energy flows through the Gulf can normalise.
Why it matters is simple. When oil drops, markets briefly relax on inflation and rate fears, but if shipping risk through Hormuz stays unresolved the inflation shock can return quickly and pull the dollar back into favour. The key reference today is Brent around $99, because that is the line between partial relief and renewed inflation anxiety.
Assumption: markets will treat ceasefire headlines as provisional until shipping conditions through Hormuz improve in a sustained way.
Macro calendar
Today
- Ceasefire and shipping headlines remain the main live catalyst for FX, rates and commodities, with Brent back near $99 after dropping about 5% on the latest diplomacy headlines.
- Australia’s February CPI slowed to 3.7% year-on-year, while BOJ minutes reinforced a hawkish bias even as Japan’s recent inflation data stayed soft, so AUD and JPY remain especially sensitive in today’s session.
- Markets are still digesting yesterday’s business surveys, which showed the U.S. at 51.4, the euro area at 50.5 and the UK at 51.0, a reminder that the energy shock is already weighing on growth and lifting price pressure.
The rest of this week
- Friday’s UK retail sales release is the clearest scheduled UK growth check left this week, especially after the sharp deterioration already seen in confidence and business surveys.
- Friday’s final U.S. Michigan sentiment report matters more than usual because it is one of the few timely reads on how higher fuel costs are feeding into households and inflation psychology.
- The U.S. macro diary is lighter than normal because February durable goods was pushed to April 7, and the next BEA GDP and personal income and outlays release, which includes PCE, is scheduled for April 9. That leaves policy rhetoric and energy headlines doing more of the market-moving work than usual.
⚖️ USD - Dollar supported, but not running away
The dollar still has support underneath it, even if today’s move is softer. The Fed is no longer being priced as an easy cutter, and markets now see a small late-year hike risk instead of a smooth easing path, which keeps the front end relatively firm even as yields ease a touch this morning. U.S. activity has slowed, but the latest PMI mix still showed manufacturing holding up better than services, which keeps the stagflation debate alive rather than settling it. That leaves the dollar backed by both yield support and residual haven demand. What would change the bias is a more convincing fall in oil and a broader drop in U.S. yields that lets risk currencies breathe.
🔻 EUR - Euro still vulnerable to the growth side of the shock
The euro remains vulnerable because the euro area looks more exposed to expensive energy than the U.S. does. March PMI data showed the region close to stalling, with input costs and delivery times worsening sharply, while consumer confidence has also deteriorated as the energy shock hits households. The ECB has turned more vigilant on inflation, so the euro is not collapsing on rate differentials alone, but that hawkishness is arriving alongside weaker growth. For now, EURUSD looks like a market that can trade around the 1.1550 to 1.1650 zone, but upside needs calmer energy markets more than hotter ECB rhetoric. A firmer euro case would likely need both softer U.S. yields and evidence that the euro area slowdown is not deepening.
⚖️ GBP - Sterling supported by rates, capped by domestic softness
Sterling still has rate support, but the domestic picture is getting less comfortable. UK inflation expectations have jumped, the BoE is openly worried about lasting price pressure, and the market has swung from expecting cuts to debating whether higher rates may still be needed. At the same time, UK business growth has slowed to its weakest pace in six months and manufacturers are facing their sharpest jump in input costs since 1992. That leaves GBPUSD supported around the mid-1.33s, with 1.3350 to 1.3450 the near-term area markets are watching. Sterling can stay relatively sturdy, but it is harder for it to rally cleanly if growth keeps fading.
⚖️ CAD - Oil support offsets part of the broader dollar pull
CAD has one of the more balanced setups in G10. Canada benefits when oil stays elevated, but USDCAD is still heavily influenced by the broader dollar backdrop and by whether the Bank of Canada feels forced to lean against persistent inflation. The BoC has held rates at 2.25% and says it would act if energy-driven inflation starts to spread, which gives the loonie some medium-term support even if growth remains soft. Near term, the 1.37 to 1.38 zone remains the key USDCAD reference area. If oil steadies while the dollar loses some haven demand, CAD can look firmer than most commodity peers.
🔺 CHF - Franc stays supported, but the SNB is an active brake
Near-term risks still lean toward a stronger CHF, especially against the euro. Safe-haven demand has kept the franc well bid, EURCHF is the cleaner expression of that story, and the SNB has made it very clear that it is more ready to intervene if appreciation becomes excessive. That matters because Swiss inflation is only 0.1% and the policy rate is still 0%, so policymakers do not want a surge in CHF to drag inflation even lower. USDCHF is trickier because both sides can attract haven demand, but EURCHF still looks more vulnerable if energy stress returns.
🔻 JPY - Higher yields still blunt the yen’s haven appeal
JPY remains the weaker haven for now because higher global yields keep working against it. BOJ minutes showed policymakers still discussing the need for further rate hikes, but recent inflation data dipped below target and government subsidies are muddying the signal, which leaves the market unsure about timing. That means USDJPY is still driven first by U.S. yields and second by intervention risk. Levels around 158 to 160 remain the zone that tends to draw attention. The yen would improve more convincingly if U.S. yields rolled over and the BoJ regained a clearer tightening narrative at the same time.
⚖️ AUD - Aussie split between RBA support and headline risk
AUD is behaving like a mix of rate support and risk sensitivity. February CPI slowed to 3.7%, but the market still sees May as live after two RBA hikes this year, which gives the currency some resilience. At the same time, the Aussie remains exposed to swings in global risk appetite, commodities and the wider China-linked growth story, so AUDUSD around 0.6950 to 0.7000 still looks like a headline-sensitive zone rather than a clean breakout area.
🔻 NZD - Kiwi remains the cleaner risk-sensitive laggard
NZD still looks more vulnerable than AUD because the RBNZ is openly saying it could hike or cut depending on whether the energy shock proves temporary or persistent. Rates have been on hold at 2.25% since November, inflation is already above target, and markets see some chance of tightening by May, but the domestic economy is not strong enough to make that a comfortable story. That leaves NZDUSD around 0.5820 as a very sensitive barometer of risk appetite and rate spreads. EURNZD can stay choppy, but the kiwi is still the cleaner downside vehicle when global growth worries reappear.
Cross-asset wrap
- 🪙 Gold: Spot gold is near $4,571, up more than 2% on the day and rebounding after a heavy March washout. The move is being driven first by a softer dollar and easier real-rate fears, then by a partial return of haven demand as traders still doubt the geopolitical story is settled. Watch next whether lower oil can keep rate fears cooling without removing gold’s defensive bid. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: XAG/USD is around $73.4, rising with gold and recovering from recent pressure, but it still looks more volatile than bullion. The main drivers are the softer dollar, less intense rate-hike pricing, and silver’s extra sensitivity to the growth outlook through industrial demand. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent is near $99, down roughly 5% on the day and back below $100 after last week’s surge toward $119.5. The drop reflects ceasefire hopes and the possibility of improved Gulf exports, but supply and shipping risks have not gone away, so the market is still trading headline to headline. Watch next for any concrete change in Hormuz shipping conditions. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: Asian equities are up around 2% and S&P 500 futures are higher by roughly 0.7%, a relief bounce after the heavy March de-risking. Lower oil, slightly easier yields and hopes that the energy shock may not worsen immediately are the main drivers, though credit worries and policy uncertainty are keeping the tone cautious rather than euphoric. [RATES] [ENERGY] [RISK]
- ₿ Crypto: Bitcoin is trading near $71,175 after swinging between roughly $68,943 and $71,313 intraday, so volatility is still elevated even with the rebound. The move is being shaped by better risk appetite as oil cools, but higher real yields and tighter dollar liquidity still stop crypto from feeling fully relaxed. [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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