Good morning traders from a cool but bright IntelliTrade desk, with Amsterdam starting near 4°C under mostly sunny skies before climbing into the mid-teens later, so pour the coffee and settle in for a Tuesday session that still revolves around oil, headlines, and a waiting market.
Overall Market Sentiment:
Market mood is cautious and headline-sensitive, not fully panicked but far from comfortable. Brent is holding near $110, the dollar remains firm, and equities are struggling to build on last week’s rebound as markets wait for tonight’s U.S. deadline on Hormuz and the risk of a sharper escalation.
The broader macro story is turning more stagflationary. U.S. services growth slowed in March, but input prices jumped at the fastest pace in more than 13 years, which keeps the Fed in a difficult spot and helps explain why rate-cut hopes have faded while the dollar stays supported.
Geopolitics:
Geopolitics remains central because the market is still trading the energy channel first. The Strait of Hormuz disruption continues to keep oil elevated, and the market is treating any signal on shipping access, infrastructure risk, or military escalation as a direct input into inflation expectations, bond pricing, and FX direction.
Brent in the broad $110 area remains the key macro reference. As long as crude stays there or higher, the dollar keeps a relative advantage, Europe stays more vulnerable through imported energy, and the yen struggles to enjoy a clean haven bid because higher oil is also a domestic problem for Japan. Assumption: the market is still pricing disruption that lasts beyond today rather than a quick normalization in Gulf shipping.
Macro Calendar
Today
- Final March services and composite PMIs are due across Spain, Italy, France, Germany, the euro area, and the UK. That matters because markets want to see how quickly the oil shock is feeding into the services side of growth.
- Euro area February retail sales are also due today. For EUR, this is a useful check on whether household demand was already softening before the latest oil squeeze intensified.
- The dominant live catalyst is still tonight’s U.S. deadline for Iran to reopen Hormuz. For markets, that means FX, oil, and equity futures may move more on headlines than on data for most of the day.
The rest of this week
- Wednesday brings the RBNZ decision, with the April Monetary Policy Review due at 2 p.m. New Zealand time. That matters because NZD has its own policy event right as markets debate how central banks should treat an oil-led inflation shock.
- Wednesday also brings the minutes of the March 17-18 FOMC meeting. Markets will look for how worried policymakers already were about inflation persistence before this latest energy escalation.
- Thursday brings the February Personal Income and Outlays release. That matters because it includes the next PCE update and offers another read on household demand before the March oil shock fully hit.
- Friday’s March CPI is the biggest scheduled macro event of the week. It is the clearest test of how much of the March oil surge is already showing up in headline inflation.
🔺 USD - Dollar firm as oil and sticky inflation keep cuts pushed back
The dollar still has the cleanest support story in G10. Safe-haven demand, the U.S. relative energy advantage, and the fading chance of Fed cuts are all working in the same direction, while the latest ISM services report showed slower activity but sharply hotter input costs. The front end of the curve remains the key pressure point because inflation is currently mattering more than moderate signs of softer growth. Today’s headline risk, Wednesday’s minutes, Thursday’s PCE, and Friday’s CPI all matter for whether the market keeps the Fed in wait-and-see mode. Risks lean toward further dollar firmness if oil stays elevated and inflation data does not cool materially. What could change that bias is a cleaner geopolitical off-ramp plus softer price data that pulls yields lower.
🔻 EUR - Euro still sits on the wrong side of the energy shock
The euro is holding around the mid-1.15s, but it still looks exposed because Europe remains more vulnerable than the U.S. to imported energy stress. The ECB is increasingly focused on the risk that higher energy costs could lift inflation expectations more quickly than in the past, even though second-round effects are not yet clearly visible. That is not an easy backdrop for EUR because it keeps policy uncertainty high while growth remains fragile. The 1.15 to 1.16 area in EURUSD remains the main zone markets are watching this week. The bias improves only if oil cools enough for growth and underlying disinflation to retake the lead.
⚖️ GBP - Sterling has rates support, but growth still caps the upside
Sterling is holding near 1.32, which keeps it a little steadier than some peers, but it is not getting a clean pass. UK firms have lifted their inflation and pricing expectations sharply, while staffing plans have softened, which leaves the Bank of England facing the same awkward mix of sticky prices and weaker demand. That means GBP still has some support from rate expectations, but it also remains vulnerable when the dollar’s defensive appeal strengthens. The 1.32 to 1.33 zone remains the main GBPUSD reference area, with 1.30 below still the broader support region markets would notice. Risks stay mixed, though slightly softer against the dollar if oil remains a growth drag.
⚖️ CAD - Oil helps, but the broader USD premium still dominates
CAD still has one of the messiest setups in G10. Higher oil should help the loonie, but USDCAD near 1.39 shows that broad dollar demand and concern about domestic softness are still outweighing the normal terms-of-trade support. Canada’s services economy stayed in contraction in March, which keeps the domestic backdrop less convincing just as global uncertainty stays high. The 1.39 to 1.40 zone remains the key USDCAD area markets are watching. The tilt stays mixed, and it only improves decisively for CAD if the market starts treating high oil as a net positive for Canada again rather than as part of a wider risk-off shock.
🔺 CHF - Franc still looks like the cleaner European haven
The franc still has the cleaner defensive profile against Europe. Swiss inflation rose to 0.3% in March on fuel costs, but that remains low compared with the euro area, which gives the SNB less immediate pressure to tighten and keeps CHF’s haven role intact. EURCHF remains the cleaner lens because Europe’s energy vulnerability is central to the current story, while USDCHF is more balanced because both currencies are attracting defensive demand. Near-term risks still lean toward a stronger CHF, especially against the euro.
⚖️ JPY - Yen still trapped between intervention risk and higher oil
JPY remains difficult to frame cleanly. USDJPY is again hovering near 160, which keeps intervention risk alive, but higher oil prices and elevated U.S. yields are still fundamentally unfriendly for Japan’s currency. At the same time, officials are emphasizing close G7 coordination and the BOJ is warning that the Middle East conflict could weigh on profits and consumption, which makes the domestic policy backdrop more complicated. That keeps the yen mixed in the near term: weak on energy and rate differentials, but vulnerable to sharp reversals if official pushback gets louder. Markets will keep treating the 160 area as the key attention zone.
🔻 AUD - Aussie is still trading more as a risk proxy than a pure rates story
AUD is sitting around the 0.69 area and still behaving more like a risk and China-sensitive currency than a pure RBA story. The RBA’s earlier hike still matters in the background, but right now global sentiment, oil stress, and the broader dollar bid are doing more of the work. That keeps AUD tied to whether markets get a genuine geopolitical de-escalation rather than just another temporary pause. The broad 0.69 zone remains the main reference area, and the tilt stays soft unless energy stress eases enough for the rates story to matter again.
🔻 NZD - Kiwi has the RBNZ tomorrow, but global risk still leads
NZD is holding around 0.57, and tomorrow’s RBNZ decision is the obvious local catalyst. The bank has already said the Middle East shock could matter more for the New Zealand economy, and markets know inflation is already running above target while growth has been soft. That is not an easy combination for the kiwi, because a cautious RBNZ would leave it exposed while a firmer tone might not be enough to overcome a still-strong dollar. NZDUSD remains centered on the broad 0.57 area, and the downside bias likely stays in place unless global sentiment improves as well.
Cross-asset wrap
- 🪙 Gold: Spot gold is around $4,641, steady to slightly softer today and still below the early-April rebound highs. The main drivers are the firm dollar and higher real-rate pressure first, while geopolitics is helping less than usual because the oil shock is also keeping the Fed more cautious. Watch next Wednesday’s minutes and Friday’s CPI, because lower yields would matter more for gold than another generic risk wobble. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: XAG/USD is near $72.17, slightly lower on the day and still below last week’s rebound zone. The main drivers are the stronger dollar and firmer yields, with industrial demand sensitivity making silver a bit more exposed than gold if growth worries deepen. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent is around $110.19, holding above last week’s lows and still not far from the recent spikes that followed the Hormuz disruption. Supply risk and shipping access remain the first drivers, while demand worries are secondary as long as physical flows stay impaired. Watch next tonight’s deadline, because that matters more than routine inventory chatter right now. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: Asia-Pacific shares outside Japan are up about 0.4%, but U.S. futures are down roughly 0.55%, which sums up a market that is waiting rather than embracing risk. The main drivers are oil, inflation fear, and the simple fact that investors do not yet know whether the next headline is a de-escalation step or a fresh escalation. Watch next today’s PMI read-through and tonight’s geopolitical deadline. [RATES] [ENERGY] [RISK]
- ₿ Crypto: Bitcoin is around $68,793, trading today between roughly $68,312 and $70,240, so volatility is active but still orderly relative to the broader macro stress. 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 clean 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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