Good morning traders from a cool but bright IntelliTrade HQ, with Amsterdam starting near 6°C under mostly sunny skies, a brief shower risk later, and a fresh coffee doing its job as we step into a Tuesday driven by retail sales and Gulf headlines.
Overall Market Sentiment:
Market mood is cautious, but leaning modestly risk-on. Hopes that U.S.-Iran talks can still happen this week are keeping Asia firmer, holding Brent near the mid-$90s rather than back in the panic zone, and stopping the dollar from rebuilding a full safe-haven surge.
But this still is not a clean all-clear. Shipping through Hormuz remains limited, the ceasefire expires this week, and today’s U.S. retail sales plus the Fed chair nominee’s Senate hearing give markets another reason to keep one eye on inflation and rates rather than chasing a simple relief rally.
Geopolitics:
Geopolitics remains central because markets are trading actual supply risk, not just diplomatic language. Iran is still weighing whether to attend talks in Pakistan, while shipping activity through Hormuz remains limited even as traders hope this week’s diplomacy can reopen more supply from the Gulf.
Brent in the broad $94 to $95 area is the clearest market reference today. That is low enough to ease the worst stagflation fear, but still high enough to keep inflation nerves alive for central banks and to keep the dollar supported against energy-importing currencies if talks disappoint. Assumption: the market is still not pricing a durable, full normalization in tanker traffic this week.
Macro Calendar
Today
- U.S. March retail sales is on today’s calendar at 8:30 a.m. ET, and it matters because markets want to know whether the consumer absorbed the March fuel shock better than feared. Reuters says economists expect a 1.4% rise.
- Kevin Warsh’s Senate confirmation hearing is also today, with markets focused on how firmly he defends monetary-policy independence and how he talks about the Fed’s balance sheet.
- UK labour-market data is due this morning, which matters for sterling because the pound is still caught between cooling wage growth and persistent inflation pressure.
- New Zealand’s first-quarter inflation held at 3.1% overnight, keeping the RBNZ tightening story alive and making NZD one of today’s more policy-sensitive currencies.
The rest of this week
- Wednesday brings UK March CPI and euro area consumer confidence, both important for judging whether higher fuel costs are already feeding into household inflation expectations and demand.
- Thursday’s flash PMIs across Australia, Japan, the euro area, the UK, and the U.S. are likely the week’s broadest growth test, and U.S. jobless claims add a fast labor-market check on the same day.
- Friday brings Japan’s March CPI, UK retail sales, and the University of Michigan consumer-sentiment survey, all useful for judging whether the March energy shock is still lifting prices faster than it is hurting demand.
🔻 USD - Dollar softer, but still with a floor
The dollar is softer than it was at the height of the oil panic, but it is not breaking down. The dollar index was around 98.09 in early trade, while the euro held near 1.1782, and the market is still treating the front end of the U.S. curve as the key pressure point because inflation spillovers matter more than mild growth cooling right now. Today’s retail sales report matters because firm demand would reinforce the idea that the Fed can stay patient. Risks lean to further USD softness if talks progress and yields drift lower, but a retail-sales beat or another rebound in crude would rebuild support quickly.
🔺 EUR - Euro firmer, but still capped by the energy question
The euro is benefitting mainly from a softer dollar rather than from a suddenly clean domestic backdrop. The pair is trading around 1.1782, but the ECB is still saying it needs more data before drawing firm policy conclusions, and officials are not yet seeing clear second-round inflation effects that would justify a rapid response. That leaves EUR vulnerable if oil turns higher again, because Europe remains more exposed than the U.S. to imported energy pressure. Markets are likely to keep watching the 1.17 to 1.18 zone in EURUSD as the main near-term reference area.
⚖️ GBP - Sterling supported by rates, capped by the jobs and inflation mix
Sterling is near 1.3523 and only slightly softer on the day, which tells you the dollar side of the move still matters more than the UK side. But the domestic debate is important this week: regular pay growth was running at 3.8% in the latest ONS release, UK labour data is due today, and UK CPI follows tomorrow, so the Bank of England still has to weigh a softer jobs picture against inflation that may not cool fast enough. That keeps GBP from having a clean upside story even when the dollar eases. The 1.34 to 1.35 zone remains the main GBPUSD reference area, with 1.36 above the next broader area markets would notice.
⚖️ CAD - Loonie still split between oil and North American inflation
CAD still has one of the messiest setups in G10. Canada’s March CPI rose 2.4% year over year and 0.9% month over month, with gasoline doing most of the lifting, but core measures stayed relatively steadier, which means the loonie is still trading more through the broader oil and dollar story than through a clean Bank of Canada repricing. USDCAD had fallen toward 1.3675 on last week’s relief move, so the broader 1.37 to 1.38 zone remains the obvious market reference now that crude has bounced but not broken higher again. The near-term tilt stays mixed.
🔻 CHF - Franc likely to give back some haven premium if talks hold
The franc still has strong defensive credentials, but near-term risks lean slightly toward a weaker CHF if diplomacy keeps markets calm. Swiss inflation was only 0.3% year over year in March, and the SNB has kept rates at 0% while signaling a strong willingness to lean against excessive franc appreciation if haven flows become too intense. That leaves EURCHF as the cleaner lens today, because Europe’s energy exposure still matters more than Switzerland’s domestic inflation story. The franc’s defensive edge strengthens again quickly if talks stall or oil jumps.
⚖️ JPY - Yen still trapped between intervention risk and BOJ caution
JPY remains difficult to frame cleanly. USDJPY was around 158.96 in early trading, still close enough to 160 for intervention chatter to stay alive, but the BOJ is also expected to hold off on another rate increase next week because the Middle East shock has made the growth and inflation outlook less certain. Lower oil would help Japan, but policy caution and still-elevated U.S. yields keep capping the rebound. That leaves the near-term outlook mixed, with the 159 to 160 area still the main attention zone.
🔺 AUD - Aussie still trading as a risk proxy with rate support behind it
AUD is around 0.7171 and only slightly softer on the day, which still leaves it near the top of its recent range. The currency is behaving more like a risk and China-sensitive proxy than a pure rate-spread trade, but stronger Australian labour data last week means it also has a firmer domestic rates backdrop than many peers. The 0.71 to 0.72 zone remains the key area markets are watching. The tilt stays constructive while oil does not snap back higher and this week’s talks keep risk appetite alive.
🔺 NZD - Kiwi has both risk support and a live inflation story
NZD stands out a little more positively today. The kiwi was around 0.5909 in early trade after New Zealand’s annual inflation held at 3.1%, which keeps the RBNZ tightening risk in the conversation even as markets trade broader peace headlines. That gives NZD a more specific policy tailwind than most high-beta currencies currently have. NZDUSD remains centered on the 0.59 area, and the constructive bias holds unless U.S. data revives the dollar or talks falter badly.
Cross-asset wrap
- 🪙 Gold: Spot gold is around $4,808, down from last week’s rebound zone and extending Monday’s softer tone. The main drivers are a firmer dollar and still-elevated real-rate pressure, with peace-talk uncertainty keeping volatility alive but not yet strong enough to override the rates story. Watch next U.S. retail sales and the next headlines on Islamabad, because both can shift the dollar first. [USD] [REAL YIELDS] [RISK]
- 🥈 Silver: Silver is near $79.40, below last week’s stronger levels and moving more heavily than gold on the day. The main drivers are the firmer dollar and yields, while the industrial side of silver keeps it more exposed than gold if this week’s PMIs show activity is still feeling the oil shock. Watch next Thursday’s PMIs. [USD] [YIELDS] [INDUSTRIAL]
- 🛢 Oil (Brent): Brent is around $94.94 after Monday’s 5.6% jump, so the market is still far from a stable normalization even though it has stepped back from the latest spike. The main drivers are whether U.S.-Iran talks actually happen and whether limited shipping through Hormuz starts to improve in practice rather than just in headlines. Watch next the ceasefire deadline and vessel traffic. [SUPPLY] [DEMAND] [GEOPOLITICS]
- 📈 Stocks: Asia is firmer, with MSCI Asia-Pacific ex-Japan up 0.9% and the Nikkei up 1.2%, while S&P 500 futures are up about 0.1% after Monday’s 0.2% cash pullback. The main drivers are revived talk hopes, AI-led risk appetite, and oil not pushing back into the panic zone. Watch next today’s retail sales and earnings, because the equity rebound still needs growth to hold up. [RATES] [EARNINGS] [RISK]
- ₿ Crypto: Bitcoin is around $75,793, trading between roughly $74,149 and $76,507 today, so volatility is active but still orderly relative to oil and FX. The main drivers remain liquidity expectations, yields, and broad 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.
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.