Good morning traders from a bright and crisp IntelliTrade HQ, with Amsterdam opening near 9°C under mostly clear skies before warming toward 20°C later today, so settle in with a fresh coffee as we work through a Thursday market that still cannot decide whether the truce is relief or just a pause.
Overall Market Sentiment:
Market mood is mixed and cautious. Yesterday’s relief rally has faded, oil has bounced back toward the mid-$90s, and the dollar is wobbling rather than collapsing as traders question how durable the U.S.-Iran ceasefire really is and whether Hormuz is meaningfully reopening.
The deeper macro issue is that inflation risk has not gone away. Bond yields remain elevated, Fed minutes showed a wider willingness to consider hikes if price pressure stays sticky, and markets are now treating today’s PCE release and Friday’s CPI as the real tests of whether the energy shock is easing or just moving from headlines into the data.
Geopolitics:
Geopolitics is still the core market driver because the ceasefire has not restored normal energy conditions. Iran is still exerting control over passage through Hormuz, shipping remains restricted, and that is enough to keep a risk premium in oil even after yesterday’s huge drop.
Brent in the broad $95 to $97 area is now the cleanest macro reference. It is far below the recent spike, but still high enough to keep pressure on inflation expectations, support the dollar against energy importers, and cap how far the relief rally can run. Assumption: this view assumes there is no credible reopening today that restores normal tanker flows.
Macro Calendar
Today
- U.S. February Personal Income and Outlays, including the PCE deflator, is due later today. Markets are looking for another firm core inflation print, which matters because it would reinforce the view that the Fed stays cautious even after the dollar’s recent drop.
- BOJ Governor Ueda is due in parliament today, which matters because USDJPY is still close enough to the 160 area that every policy hint and every move in rate expectations matters more than usual.
- Ceasefire and shipping headlines remain a live market catalyst all day. In this environment, FX and oil can still move more on Hormuz access than on scheduled data.
The rest of this week
- Friday’s U.S. CPI for March is the week’s main macro release, due at 8:30 a.m. ET. It is the clearest test of how much of March’s oil shock is already showing up in headline inflation.
- Friday’s preliminary University of Michigan consumer sentiment report matters because inflation expectations and household confidence are becoming more important as fuel costs rise.
- Canada’s March jobs report is also due Friday. That matters for CAD because the loonie is still being pulled between oil, domestic softness, and the broader dollar story.
⚖️ USD - Dollar softer, but not broken
The dollar has lost the clean panic bid it enjoyed during the worst of the oil shock, but it still has a floor. The U.S. remains less exposed than Europe or Japan to higher energy prices, the front end of the Treasury curve is still sensitive to inflation surprises, and markets are only pricing a very small amount of easing for the rest of this year. That keeps the greenback from turning into a one-way downside story even after its sharp fall. Today’s PCE and Friday’s CPI are the real checkpoints, because firm inflation would quickly restore yield support. What could weaken the current bias further is a cleaner ceasefire plus softer U.S. inflation that pulls yields down more decisively.
⚖️ EUR - Euro supported by a softer dollar, but energy still caps it
The euro has pushed into the mid-1.16s mainly because the dollar fell, not because Europe’s macro story suddenly looks clean. ECB policymakers are still warning that the energy shock could lift inflation expectations quickly even if second-round effects are not yet obvious, which keeps policy uncertainty high while growth remains fragile. That is not an easy backdrop for a sustained euro rally. Markets are likely to keep watching the 1.16 to 1.17 area in EURUSD as the main near-term zone. The bias stays constructive while oil stays off the highs, but renewed energy stress would put the euro back on the defensive quickly.
⚖️ GBP - Sterling steadier, but still facing the inflation-growth squeeze
Sterling is holding up reasonably well around the high-1.33s, but the domestic picture is still awkward. UK firms now expect faster price rises over the next year, while wage expectations and hiring plans have softened, which leaves the Bank of England balancing sticky inflation against a softer activity backdrop. That keeps GBP from behaving like a simple high-rate currency. The 1.33 to 1.35 area remains the main GBPUSD reference zone. Risks look mixed, with the pound still benefiting from dollar softness but struggling to fully escape the broader growth drag.
⚖️ CAD - Loonie still split between oil and the broader USD story
CAD remains one of the trickier G10 currencies to read. A weaker dollar and calmer energy markets helped the loonie recover earlier this week, but its traditional oil support has become less reliable and domestic data has not been strong enough to fully take over. Markets have also scaled back how much Bank of Canada tightening they expect after oil dropped sharply. USDCAD is still best viewed through the broader 1.38 to 1.39 area. Friday’s Canada jobs report matters because it will help decide whether CAD trades more off domestic weakness or off the broader relief tone.
🔻 CHF - Franc may give back some haven premium if calm holds
The franc still looks like a solid defensive currency, but near-term risks lean slightly toward a weaker CHF if the truce holds together. Swiss inflation rose to 0.3% in March, but that is still low enough that the SNB is not under real pressure to tighten, which leaves the franc more dependent on risk sentiment than on domestic policy. EURCHF remains the cleaner lens because Europe still carries more energy risk than Switzerland. Near-term risks lean slightly toward a weaker CHF overall, though the franc should still hold up better than the euro if headlines worsen again.
🔻 JPY - Yen still not getting a clean haven lift
JPY is still caught in an awkward mix of forces. Lower oil than last week helps Japan, but the yen has already started giving back part of yesterday’s gains and USDJPY is back near 158.8 as markets weigh fiscal expansion talk, BOJ uncertainty, and still-elevated U.S. yields. Rate markets still see a meaningful chance of a BOJ hike this month, but that view could soften quickly if the ceasefire frays and volatility rises again. That leaves the 158 to 160 area as the key attention zone. Near-term risks still lean toward a softer yen unless yields fall more decisively.
⚖️ AUD - Aussie still trading more as a risk proxy than a rates story
AUD is hovering around 0.703, which tells you the relief backdrop is helping, but not enough to create a clean breakout. The RBA’s tighter stance still matters in the background, yet right now the Aussie is behaving more like a global risk and China-sensitive currency than a pure rate-spread story. The broad 0.70 to 0.71 zone remains the main reference area. The tilt is mixed, and it improves only if oil stress keeps fading and global sentiment firms again.
🔺 NZD - Kiwi still has the strongest local policy support
NZD stands out a little more positively because it has both the weaker-dollar backdrop and a firmer local policy message. The RBNZ held the OCR at 2.25% but made it clear that timely hikes would be needed if inflation expectations start to drift, which gives the kiwi more policy support than many peers currently have. That helps explain why NZDUSD is holding around the 0.58 area. The tilt stays constructive while global risk does not roll over again, though the kiwi would still struggle if U.S. inflation data revives the dollar sharply.
Cross-asset wrap
- 🪙 Gold: Spot gold is around $4,714, steady on the day and below the overnight rebound high near $4,777. The main drivers are still the dollar and real yields first, while geopolitical stress is helping only partly because firmer inflation data would also keep rate pressure alive. Watch next today’s PCE and Friday’s CPI. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: XAG/USD is around $73.71, slightly softer and still below the strongest rebound levels from yesterday’s relief rally. It is tracking the same dollar-and-yields story as gold, but its industrial side leaves it more exposed if growth sentiment weakens again. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent is near $96.7 after yesterday’s collapse from the recent spike area, and today’s bounce shows the market still does not fully trust the ceasefire. The key drivers are supply access through Hormuz, tanker restrictions and tolls, with demand concerns only secondary while physical flows remain uncertain. Watch next whether actual shipping normalizes rather than just the headlines. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: U.S. equities surged yesterday, with the S&P 500 gaining about 2.5%, but today’s tone is cooler, with Wall Street futures down around 0.2% and Asian markets mixed. The main drivers are the same two forces markets are struggling to balance: lower oil than last week, but still-high enough energy prices to keep inflation worries alive. Watch next today’s PCE and tomorrow’s CPI. [RATES] [ENERGY] [RISK]
- ₿ Crypto: Bitcoin is around $70,876, trading today between roughly $70,531 and $72,716, so volatility is active but still orderly. The main drivers remain liquidity, real yields, and broad risk appetite, which keeps crypto trading more like a macro-sensitive asset than a clean geopolitical hedge. [LIQUIDITY] [YIELDS] [RISK]
This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.
Need help decoding this article? Get our free Macro Decoder ebook when signing up to our newsletter using the sign up button below! No spam, just value.