Good morning traders from a crisp, blue-skied IntelliTrade desk, with cool single-digit temperatures set to climb into the mid teens and the sun doing its best to wake everyone up, so top up that coffee and let us walk through a market that is slowly shifting from shock to cautious recalibration.
Overall Market Sentiment
Risk sentiment has improved from the earlier panic but is still far from relaxed. Asian and European equities are rebounding after the recent selloff, helped by signs that oil is stabilising rather than exploding higher, yet volatility remains elevated and investors are still paying close attention to every headline out of the Middle East.
Brent crude is trading around 83 dollars a barrel and WTI near the upper 70s, keeping a clear risk premium in energy even as the pace of gains slows. The US dollar index is hovering around 99, up roughly 1 percent over the past week but off its recent intraday highs, while gold is holding near 5,150 dollars an ounce, slightly below recent records yet still very elevated. Bitcoin is consolidating in the low 72,000s after a sharp bounce, trading like a high beta expression of risk appetite rather than a pure safe haven.
The big macro question for the rest of this week is whether markets lean toward an inflation scare, a growth scare, or some uncomfortable mix of both as the oil premium persists and the US data cycle rolls on.
⸻
Geopolitics
The Iran-centred conflict and disruptions around the Strait of Hormuz remain the core macro shock. Shipping through the region is still curtailed and a significant number of tankers are waiting or rerouting, which keeps supply risk elevated and supports Brent in the low 80s, with spot quotes around 83 dollars per barrel and a visible premium over levels seen before the escalation.
Markets are now treating the low to mid 80s as a live stress band for Brent, while scenario work increasingly discusses the possibility of 90 to 100 dollar crude if disruptions persist or damage spreads to more infrastructure. At the same time, equities are no longer in free fall, which suggests investors are pricing a meaningful but still manageable shock rather than a full-scale energy crisis for now.
Assumption: the baseline for this article is that the Strait of Hormuz remains heavily disrupted but not completely closed for a long period and that there is no further large loss of export capacity. If that assumption fails, the conversation would quickly shift toward a more severe supply and inflation shock with larger implications for policy and growth.
⸻
Macro calendar
Today
• The focus today is on US initial jobless claims and related labour indicators, which provide an early read on how the jobs market is evolving ahead of Friday’s main employment report.
• In Europe, euro area retail sales are in view, giving a sense of how consumers are coping with slightly higher inflation and the broader slowdown.
Given the backdrop, intraday moves are likely to respond more to how oil, yields and the dollar trade around these releases and any new conflict headlines than to the data in isolation.
The rest of this week
• United States:
• Friday’s employment report is the main event. Consensus looks for a sharp moderation from January’s 130k print, with new jobs in the 50–65k range, unemployment near 4.3–4.4 percent and average hourly earnings around 0.3–0.4 percent month on month.
• A combination of firm wages, even modest job growth and higher oil would keep the conversation tilted toward fewer and later rate cuts. A soft jobs number and benign wage growth, especially if oil stabilises, would push markets back toward a growth-scare narrative instead.
• Euro area and UK:
• The euro area publishes its final fourth quarter GDP estimate tomorrow against a backdrop of annual inflation that has ticked up to about 1.9 percent from 1.7 percent, with services inflation still running clearly hotter than goods.
• The mix of slightly firmer inflation and modest growth matters because an additional energy shock makes it harder to justify very aggressive easing from the regional central bank in the near term.
• Asia-Pacific:
• Asian equities are bouncing strongly as some investors tentatively lean back into risk now that oil has stopped spiking straight up and talk of possible diplomatic channels circulates.
• China’s political meetings and growth targets, together with Australia’s data and guidance from regional policymakers, continue to frame the outlook for commodity-linked and China-sensitive currencies.
Overall, the rest of this week is about how these data points interact with the conflict narrative and whether they push markets toward a cleaner view on inflation versus growth risks.
⸻
Currency outlooks
🔺 USD – Dollar still in the driving seat, but pace is easing
The US dollar index is trading near 99.0, up almost 2 points over the past couple of weeks as investors sought liquidity and safety around the initial shock, but it has started to edge sideways rather than accelerating higher. With oil elevated and US data broadly resilient, markets are reluctant to price aggressive near-term cuts, which keeps the rates backdrop supportive for the currency.
Into Friday’s jobs report, the near-term risk tilt still leans toward a firm or slightly stronger dollar if employment and wages hold up and oil remains near current levels. The main counter-scenario would be a clear downside surprise in jobs or wages combined with a visible de-escalation in the Middle East, which could pull yields and the dollar lower against other havens even if it stays well supported versus higher beta FX.
🔻 EUR – Energy-sensitive and drifting at the lower end of the range
EURUSD is trading close to 1.16, around the weakest levels of the past month, as the combination of a still strong dollar and renewed concern about imported energy costs weighs on the single currency. Annual inflation has ticked up to around 1.9 percent, with services inflation above 3 percent, so the region faces a tricky mix of slightly higher price pressure and only modest growth.
For the rest of the week, the 1.16–1.18 zone remains the main battlefield. A soft euro area retail and GDP profile combined with high energy costs would keep the bias mildly negative versus the dollar. A combination of calmer oil prices and resilient domestic data could allow some stabilisation, but near term the risks still lean toward gentle EUR underperformance in a strong-USD environment.
🔻 GBP – Sterling softer as global risk and dollar strength dominate
GBPUSD is trading around 1.33–1.34, near the lower segment of this year’s range, after failing to hold earlier rebounds as the dollar firmed and global risk sentiment wobbled. Domestic data and wage dynamics have kept expectations for very rapid rate cuts in check, but in practice sterling continues to behave as a relatively high beta European currency when geopolitical stress is elevated.
For the rest of this week, markets are likely to treat the 1.33–1.35 area as a key reference band. Unless there is a clear improvement in the conflict narrative or a notable downside surprise in US data, the tilt remains toward modest GBP underperformance versus the dollar, even if it can do better against some higher risk peers.
⚖️ CAD – Oil support versus dollar strength keeps things finely balanced
USDCAD is holding in the upper 1.35–1.37 range, which reflects a tug of war between a still strong US dollar and a higher oil price that improves Canada’s terms of trade. The fact that CAD has not weakened more in the face of the conflict underlines that the market does see some offsetting benefit from the energy story, even as overall risk sentiment remains fragile.
For the rest of the week, a Brent price anchored in the low 80s and resilient US data would likely keep USDCAD near the top of its recent range rather than triggering a clean move lower. A deeper risk-off turn with another leg higher in the dollar index would probably weigh more on CAD than the oil advantage can compensate for, whereas a calmer geopolitical tape could allow some CAD outperformance.
🔺 CHF – Franc remains a clean regional haven
USDCHF is still trading close to the lower end of its yearly range, with spot hovering around the high 0.77 to low 0.78 region, which signals a firm franc despite the strong dollar. In periods when nearby geopolitical risk, higher energy costs and equity volatility are all in play, CHF often acts as one of the more straightforward safe haven expressions inside Europe.
Into the end of the week, the risk tilt favours a still strong or stronger franc on rallies, particularly against higher beta European currencies. The main things that could change that narrative would be a rapid easing of regional tensions or any sign that policymakers are uncomfortable with further CHF appreciation.
⚖️ JPY – Haven status constrained by wide yield differentials
USDJPY is trading close to 157, near the upper end of its recent band, which shows how wide rate differentials continue to cap the yen’s ability to behave like a classic safe haven. Markets are watching two key factors: whether global yields fall enough to generate more support for JPY and whether officials sound more vocal about undesirable currency weakness if volatility picks up again.
For the rest of this week, the tilt looks mixed rather than clearly bullish for the yen. A strong US jobs report and stable or higher yields would likely keep USDJPY elevated, while a combination of softer data and renewed risk-off could generate more yen demand, especially if bond markets start to price a clearer growth scare.
🔻 AUD – High beta rebound, but still tied to global risk
AUDUSD is trading around 0.70–0.71, having rebounded from earlier lows as risk appetite improved and talk of possible diplomatic channels emerged, yet the currency remains closely linked to swings in broader sentiment. Domestic data and policy expectations are relatively supportive, but in the near term the global risk and oil narrative matters more than the local rates story.
For the rest of the week, if equities hold their rebound and oil stops grinding higher, AUD can stay resilient. However, the tilt versus USD still leans slightly negative while the dollar index is near the top of its range and geopolitics remain uncertain.
🔻 NZD – Kiwi still the higher beta cousin, even after a bounce
NZDUSD is trading around 0.59–0.594 after recovering from earlier lows, but it remains one of the more sensitive majors to shifts in global growth sentiment and risk appetite. The policy backdrop looks a bit less supportive than in Australia after central bank communications tempered the expected tightening path, which reduces the rate cushion for the kiwi.
Through the rest of this week, the 0.59–0.60 area is the main reference zone. Unless there is a more durable improvement in risk sentiment or a notably softer US data run, the bias remains toward mild NZD underperformance relative to both USD and CHF, even if short term rebounds are possible on any positive headlines.
⸻
Cross-asset wrap
🪙 Gold
Gold is trading near 5,150 dollars an ounce, off last week’s record highs but still very elevated as investors hedge both geopolitical risk and the possibility that the oil premium complicates the disinflation path. The metal tends to be supported while uncertainty is high and real yields are contained, with the main headwind coming from a still firm dollar and intermittent profit taking after the recent surge.
🛢 Oil
Brent is holding around 82–84 dollars a barrel and WTI in the upper 70s as supply disruptions and shipping constraints keep a clear risk premium in prices. For the rest of this week, markets will watch for any signs of de-escalation, changes to shipping flows and hints from major producers on supply decisions, all of which will feed directly into inflation expectations and the broader risk tone.
📈 Stocks
Global equities are staging a rebound after the earlier selloff, with Asian indices in particular recovering sharply as investors re-enter risk and oil stabilises. The key question for the remainder of the week is whether incoming data and corporate guidance support a narrative of resilient growth that can absorb higher energy costs, or whether margins and demand start to look more challenged, which would favour a more defensive sector bias.
₿ Crypto
Bitcoin is trading around 72,000–73,000 dollars after rallying roughly 20 percent from its late February lows, supported by renewed institutional interest and ongoing ETF flows. In the near term, crypto continues to behave like a high beta asset tied to risk appetite and liquidity conditions, so its path this week is likely to hinge on how equities, yields and the dollar respond to the jobs report and the evolving conflict, rather than acting as a straightforward hedge against geopolitical 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.