Good morning traders from a damp but mild IntelliTrade desk, with light rain around Amsterdam, temperatures near 10°C and a breezy feel in the air as we settle in with a fresh coffee and map out today’s macro story.
Overall Market Sentiment:
The mood is cautious and fragile rather than outright panic. Markets briefly welcomed signs of a possible pause in further escalation, but that relief has faded as Iran denied direct talks and the Strait of Hormuz disruption continues to keep energy markets on edge.
What markets are really pricing now is a more inflationary backdrop with less room for central banks to ease. Higher oil is feeding into higher bond yields, a firmer dollar, and softer conviction in risk assets, even if pockets of relief still appear session to session.
Geopolitics:
Geopolitics remains central because the Middle East conflict is no longer just a headline risk. It is directly affecting energy flows, lifting inflation fears, and reshaping rate expectations across the major economies.
The key market link is simple: if Brent holds back above the $100 zone and the Hormuz disruption persists, inflation expectations stay sticky and safe-haven demand stays tilted toward the dollar more than toward classic havens like gold. That is why oil, yields and USD behavior matter more than broad equity rebounds right now.
Macro Calendar
Today
• Flash PMIs from the euro area, UK and US are the main scheduled catalysts today. Markets will use them to judge whether growth is bending under the energy shock or still holding up well enough to keep yields elevated.
• Central bank speeches also matter because policymakers are being pushed to explain whether this is a temporary energy shock or the start of broader second-round inflation pressure.
• Headline risk from the Middle East remains just as important as the data. Any sign of de-escalation would likely cool oil and yields, while renewed escalation would quickly revive USD demand.
The rest of this week
• US durable goods, GDP revisions and especially Friday’s PCE inflation print are the main US checkpoints. They matter because the market is already questioning whether the Fed can ease at all this year.
• European inflation and confidence data will matter for the euro because the ECB has already signaled it will act if energy-driven inflation starts to look entrenched.
• In the UK, markets will keep filtering inflation and wage risk through the BoE lens after last week’s hold, with energy costs now the key wildcard for the rates path.
• Japan remains in focus after core inflation slipped below 2%, because that complicates the BoJ’s tightening case even as yen weakness and imported energy inflation keep pressure high.
🔺 USD - Dollar supported by oil and yields
The dollar still has the clearest macro tailwind into today. Higher oil is keeping inflation concerns alive, Treasury yields have pushed back up, and the market has moved a long way from pricing easy Fed cuts toward a hold and even a small chance of renewed tightening. The dollar index is also building its strongest month since October, which shows how powerful the safe-haven and yield support mix has become. Today’s PMIs matter because a still-resilient US activity picture would reinforce the higher-for-longer rates story. What could change this bias is a genuine geopolitical de-escalation that drags oil and front-end yields lower at the same time.
🔻 EUR - Euro squeezed by weak confidence and energy risk
The euro is being pulled in two directions, but the near-term tilt still leans softer against the dollar. On one side, the ECB is clearly more alert to inflation upside after last week’s meeting. On the other, euro area growth remains fragile, consumer confidence has deteriorated sharply, and the region is more exposed to an energy shock than the US. That leaves EURUSD vulnerable if PMIs disappoint or oil climbs again, with the 1.1500 to 1.1600 area remaining the near-term zone markets watch. A firmer euro case would need softer US yields or a meaningful improvement in European growth sentiment.
⚖️ GBP - Sterling helped by rates, capped by growth risk
Sterling still has rate support underneath it, which is why it has outperformed many European peers this month even while losing ground to the dollar. The market has shifted from expecting cuts to debating whether the BoE may need to tighten later this year if energy feeds into wages and services inflation. That gives GBP a sturdier base than many growth-sensitive currencies, but it does not fully protect cable when the USD is broadly firm. Markets are watching the 1.33 to 1.34 zone in GBPUSD as the immediate reference area. A weaker UK activity backdrop or a broader risk wobble would make that support look less secure.
⚖️ CAD - Oil support meets broad dollar strength
CAD has a more balanced outlook than many peers because higher oil should cushion it, even as the broader dollar backdrop stays supportive for USD. That is why USDCAD is not a simple oil story right now. A stronger crude market helps Canada’s terms of trade, but if US yields keep climbing and markets stay defensive, the pair can still lean upward. The 1.37 area remains an important reference zone after the loonie recently bounced from a two-month low. CAD would look firmer if oil stays elevated while risk sentiment stabilizes rather than deteriorates again.
⚖️ CHF - Safe-haven demand strong, but SNB caps the upside
Near-term risks still lean toward a firm CHF on global uncertainty, but the upside is less clean than in past risk-off episodes. The SNB held rates at 0% last week and made clear it is ready to lean against excessive franc strength, which matters because inflation is still very low in Switzerland. That means CHF can still benefit when markets turn defensive, especially through EURCHF, but official discomfort grows as the move becomes more extreme. USDCHF will therefore depend on whether dollar safe-haven demand outpaces franc demand. For now, CHF remains supported, but not unchecked.
🔻 JPY - Yield pressure still dominates the yen
JPY remains the most vulnerable of the major havens because rising US yields are working against it and Japan’s latest inflation data complicated the BoJ tightening story. Core inflation slipped to 1.6% in February, which reduces confidence in a near-term rate hike even as imported energy inflation keeps political pressure high. That leaves USDJPY sensitive first to US yields and second to intervention rhetoric. Levels near 159 are already in the zone that tends to attract attention from policymakers and traders alike. The yen would recover more convincingly only if US yields roll over or the BoJ regains a clearer tightening signal.
🔻 AUD - Aussie behaving more like a rate-risk mix
AUD is acting partly like a risk currency and partly like a rates story. The RBA has turned more hawkish, but that support is being offset by the broader drag from geopolitical uncertainty, higher imported energy costs, and a stronger USD backdrop. That is why the Aussie pulled back even after touching a six-week high, with 0.6950 to 0.7000 now the obvious near-term zone in AUDUSD. The tilt stays softer unless risk sentiment improves or China-linked demand signals start to dominate the narrative again.
🔻 NZD - Kiwi pressured by weak domestic momentum
NZD enters the session with a softer bias because New Zealand’s growth picture remains fragile and the currency is still highly sensitive to broader risk appetite. The RBNZ has warned that a prolonged energy shock could eventually force a rethink on rates, but for now the message is still cautious rather than aggressively hawkish. Add in softer GDP and a weak housing backdrop, and NZDUSD remains more exposed when the dollar is firm and markets are uneasy. The 0.58 area is the near-term zone to watch, while EURNZD will stay sensitive to relative growth concerns between Europe and New Zealand. A cleaner kiwi recovery would need calmer markets and evidence that domestic weakness is bottoming out.
Cross-asset wrap
• 🪙 Gold: Spot gold is trading near $4,340, down again and still well below last week’s levels after a ten-session slide. The main drivers are a firmer dollar and higher real-rate pressure as markets scale back Fed easing hopes, with geopolitics failing to help because inflation fears are supporting USD instead. Watch next: whether gold can hold the $4,275 support area if yields keep pushing higher. [USD] [REAL YIELDS] [RISK]
• 🥈 Silver: Silver is also under pressure after falling alongside gold, but it looks even more vulnerable when growth concerns rise because industrial demand matters too. The key mix is still a stronger dollar, higher yields and a shakier growth backdrop, which can keep silver lagging if PMIs disappoint. [USD] [YIELDS] [INDUSTRIAL]
• 🛢 Oil (Brent): Brent is back around $103.6 after rebounding sharply from Monday’s deep pullback and holding above the $100 zone. Supply disruption through Hormuz remains the first driver, while fragile demand sentiment and geopolitical headlines create violent two-way swings. Watch next: any concrete shift on shipping flows or de-escalation headlines. [SUPPLY] [DEMAND] [GEOPOLITICS]
• 📈 Stocks: Equity signals are mixed, with Asian shares recovering modestly while European and US futures turned softer again after Monday’s relief rally. Higher oil, higher yields and uncertainty over whether diplomacy is real or temporary are the main pressure points, with rate-sensitive and growth-sensitive sectors still vulnerable. [RATES] [ENERGY] [RISK]
• ₿ Crypto: Bitcoin is trading around the $70,000 zone after bouncing with the broader relief move, but the macro backdrop still argues for volatility. Crypto is being pulled between better risk appetite on de-escalation hopes and tighter global liquidity conditions as yields stay elevated. [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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