Good morning traders from a mostly sunny but cool IntelliTrade desk, with Amsterdam sitting near 11°C, bright spells overhead, and a brief lunchtime shower risk, so bring the coffee a little closer as we map the week ahead.
Overall Market Sentiment:
Market mood starts the week cautious and selective rather than outright risk-off. Talks between Washington and Tehran are still alive and both sides are talking up progress, but the Strait of Hormuz is back under tighter military control and shipping conditions remain uncertain, so markets are balancing diplomacy against a still-live energy shock.
That leaves the regime mixed. U.S. stocks have recovered to record highs and the dollar has given back a good part of its panic premium, but oil is still elevated enough to keep inflation nerves alive and to stop markets from pricing a full return to calm.
Weekly Thesis:
The main market question this week is whether diplomacy can keep oil out of the panic zone long enough for growth data to matter again. The base case is that talks keep inching forward but shipping disruption only improves gradually, leaving oil below the worst highs but still high enough to keep central banks cautious. Our house view is that this keeps the dollar from breaking down, leaves the euro and yen more exposed to energy stress, and makes Tuesday’s U.S. retail sales and Thursday’s global flash PMIs the clearest tests of whether risk appetite can keep extending.
Scenario Map:
- Base case (50%): Talks continue without a full breakthrough, Hormuz traffic improves only in patches, and Brent holds in a broad $90 to $100 range. That likely keeps the dollar on a firmer floor than last week, leaves EUR and JPY vulnerable for different reasons, and supports commodity currencies only in a measured way.
- Risk-on scenario (20%): Shipping access improves visibly, oil slips deeper into the $80s, and flash PMIs show activity holding up better than feared. That would likely weigh further on USD and CHF while helping EUR, AUD, and NZD extend the relief move.
- Risk-off escalation scenario (30%): Hormuz disruption worsens again, oil reclaims triple digits, and PMIs show the growth hit arriving faster than expected. That would likely favor USD and CHF, keep equities more fragile, and leave JPY torn between haven demand and its imported-energy problem.
What Changed Since Last Week:
The dollar lost much of its war premium, Brent collapsed 9% on Friday, and U.S. equities moved back to record highs as markets priced a diplomatic off-ramp. But by the weekend the story had already become less clean, with Hormuz uncertainty returning and the market moving from “the shock is ending” to “the talks are real, but the physical risk is not gone.” That shift leaves this week less about one-way relief and more about whether calmer headlines can survive contact with shipping reality and incoming activity data.
Geopolitics:
Geopolitics remains central because the market is trading energy logistics, not just diplomacy headlines. The key issue is that both sides are still describing talks positively while major gaps remain over nuclear issues and the Strait itself, and vessels have continued reporting security incidents around Hormuz.
Brent in the broad $90 to $100 area remains the clearest market reference. That zone is low enough to ease the most extreme stagflation fear, but still high enough to keep inflation expectations sticky, support the dollar against energy importers, and stop Europe from getting a clean macro reset. Assumption: this view assumes there is no full reopening this week that clearly restores normal tanker flows.
Macro Calendar
The week ahead
- The first and biggest catalyst is still the weekend diplomacy and what it means for actual Hormuz shipping, because markets are likely to trade real access and vessel safety more heavily than almost any routine data point.
- Tuesday brings the rescheduled U.S. March retail sales report, which matters because it is the cleanest check on whether the consumer absorbed the fuel shock better than feared.
- Wednesday brings the euro area flash consumer confidence update, a useful read on whether Europe’s energy and growth squeeze is hitting sentiment harder again.
- Thursday’s flash PMIs across Australia, Japan, the euro area, the UK, and the U.S. are likely the week’s broadest growth test for FX and macro. They will show whether softer oil is enough to steady activity or whether the March energy shock is still dragging on demand.
- Friday brings Japan’s March national CPI, which matters because USDJPY is still near levels that draw attention and the BOJ is trying to balance imported inflation against a still-fragile growth backdrop.
🔺 USD - Dollar softer, but still with a floor
The dollar goes into the week much softer than it was at the height of the oil panic, after dropping to its lowest level since February when markets briefly believed the Strait reopening story. Even so, the downside is not clean because the Fed is still in a wait-and-see stance and officials have already warned that higher energy costs are feeding inflation pressure beyond fuel. The front end of the curve remains the main pressure point, so the market still looks more sensitive to upside inflation risks than to mild growth cooling. Tuesday’s retail sales and Thursday’s PMIs will help decide whether the greenback keeps finding support on relative resilience. The current bias stays mildly constructive if oil holds above pre-war norms and U.S. data does not crack. That bias weakens if diplomacy stabilizes shipping more clearly and the growth data softens at the same time.
⚖️ EUR - Euro stronger, but still hostage to the energy channel
The euro starts the week in the upper 1.17s after a softer dollar did most of the lifting. But the week-ahead setup is still awkward because the euro area remains more exposed than the U.S. to imported energy pressure, and policymakers are openly warning that the war could weigh on growth while also lifting inflation. The policy debate has clearly become more complicated, with markets largely expecting no move at the April meeting but still debating whether tighter policy may be needed later if energy pressure lingers. That makes Thursday’s flash PMIs especially important for EUR. The 1.17 to 1.18 zone in EURUSD is the main area markets are watching, and the constructive tone only really improves if oil stays contained and activity data holds up.
⚖️ GBP - Sterling supported by rates, capped by growth
Sterling enters the week around the 1.35 area with support from a market that still sees inflation as the bigger UK risk than an immediate downturn. Policymakers have made clear they do not want to wait for full proof of second-round effects if the energy shock starts feeding more deeply into prices, which keeps the BoE from sounding relaxed. But the UK is also highly exposed to gas and household-cost pressure, so the pound is not a clean winner even when the dollar softens. The 1.35 to 1.36 zone in GBPUSD is the key reference area this week. The bias stays mixed, and it would weaken quickly if global energy stress starts to bite UK growth more visibly.
⚖️ CAD - Loonie still split between oil and the broader dollar story
CAD still has one of the messiest week-ahead profiles in G10. The loonie rallied to a one-month high near 1.3650 to 1.3675 when Hormuz briefly reopened, but that same move also came with a sharp fall in oil, which removes one of CAD’s usual tailwinds. The Bank of Canada has already signaled it will rely more on judgment than usual and is willing to look through the first-round shock but not a persistent inflation drift. That leaves USDCAD still anchored around the 1.36 to 1.38 zone. The current tilt stays mixed, because this week can still turn into either a weaker-dollar story or a renewed energy-stress story very quickly.
🔺 CHF - Franc still has the cleaner defensive edge against Europe
The franc remains the cleaner hedge against renewed European stress even though some haven premium came out of the market late last week. Swiss policymakers have made clear that geopolitical tension is the main risk to the outlook and that they remain ready to lean against excessive franc strength if needed, which tells you haven demand is still very much part of the picture. EURCHF around the low-0.92s remains the cleaner lens here, while USDCHF is more mixed because the dollar can still attract defensive demand too. On balance, near-term risks still lean toward a firmer CHF against the euro if Hormuz disruption persists. That edge fades if diplomacy turns into clearly better shipping conditions rather than just better headlines.
⚖️ JPY - Yen caught between lower oil hopes and BOJ caution
JPY remains one of the hardest currencies to frame cleanly into this week. Lower oil would clearly help Japan on the terms-of-trade side, but the BOJ has just pushed back against expectations of an April hike and officials are still highly sensitive to the risk of tightening into a negative supply shock. At the same time, Tokyo and Washington have agreed to intensify communication on exchange rates, which keeps intervention risk alive if USDJPY drifts back toward the 160 area. That leaves the yen looking mixed rather than outright strong. The current bias improves if yields and oil both soften together, but weakens again if Hormuz stress revives or U.S. yields move back up.
🔺 AUD - Aussie still looks like one of the clearer week-ahead winners
AUD still has one of the cleaner setups among the high-beta majors. It comes into the week near four-year highs, supported by stronger domestic labor data, solid China growth, and a market that is once again rewarding commodity and risk-sensitive currencies when the war premium fades. This week the Aussie still looks more like a risk proxy with rate support in the background than a pure rate-spread trade. The 0.71 to 0.72 zone is the key area markets are watching in AUDUSD. The constructive tilt holds if PMIs and China-linked sentiment stay steady, but it would fade quickly if Hormuz stress pushes the market back into defense.
🔺 NZD - Kiwi constructive, but it still needs calm to hold it
NZD also starts the week with a constructive tone, helped by the softer dollar backdrop and by a central bank that has said it would act decisively if inflation expectations drift. That gives the kiwi a bit more policy support than it would usually have in a simple risk rally. But it is still a high-beta currency first, which means it needs the broader tone to stay supportive. NZDUSD remains centered on the 0.58 to 0.59 area this week. The bias stays constructive while diplomacy holds and U.S. data does not rebuild a stronger-dollar narrative.
Cross-asset wrap
- 🪙 Gold: Spot gold starts the week around the upper-$4,800s after Friday’s move to about $4,861, which left it near a one-month high and more than 2% higher on the week. The main drivers are still the dollar and real yields first, with geopolitics helping mainly when it softens rate fears rather than intensifies them. Watch next whether oil and yields decouple again, because that will likely decide whether gold can keep grinding higher. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: Silver starts the week around the low-$80s after Friday’s jump to about $81.71, outperforming gold and finishing more than 7% higher on the week. The main drivers are the weaker dollar and easier yield pressure, while industrial demand hopes matter more here than they do for gold, which makes Thursday’s PMIs especially important. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent starts the week in the broad $90 to $91 area after Friday’s 9% collapse from Thursday’s $99.39 settlement, but the renewed uncertainty around Hormuz means that move still looks fragile rather than settled. The first drivers remain shipping access and supply disruption risk, while diplomacy is the second force shaping expectations and demand worries remain secondary as long as physical flows stay unstable. Watch next whether actual tanker traffic improves, because that matters more than optimistic language on talks. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: The S&P 500 starts the week around 7,126 after finishing Friday at a record high and fully erasing the losses that followed the start of the war. The main drivers are stronger earnings, resilient tech spending, and the market’s belief that the worst energy shock may already be past, even if that optimism is still vulnerable to another Hormuz setback. Watch next whether PMIs and diplomacy justify those record valuations rather than simply tolerate them. [EARNINGS] [TECH] [RISK]
- ₿ Crypto: Bitcoin is around $75,246, trading between roughly $74,998 and $76,762 today, so volatility is active but still orderly relative to oil and FX. The main drivers remain liquidity, real yields, and broad risk appetite, which means crypto is still behaving more like a macro-sensitive asset than a pure geopolitical 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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