ACCM

Global markets are currently suspended in a state of high-conviction structural repricing, as the relentless expansion of AI-driven growth proxies clashes with a defensive pivot in foreign exchange markets. While the US Dollar continues to exert significant gravity on capital flows due to the Federal Reserve projected wait-and-see stance, a localised decoupling is emerging in high-beta sectors. The market regime has shifted from extreme fear toward a tentative greed cycle, yet this transition remains vulnerable to sudden liquidity tests.

All times mentioned in this report are in Beijing time.

NAS100 (Nasdaq 100) Analysis

The NAS100 has demonstrated an extraordinary display of momentum, recording a sustained bullish streak that has effectively shattered previous psychological barriers. After navigating a period of intense pressure in March, the index executed a textbook V-shaped recovery to reclaim and surpass the 26,000 level.

This parabolic move is underpinned by a resurgence in investor appetite for tech-heavy growth, particularly as ceasefire hopes in the Middle East begin to de-risk broader equity portfolios.

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Technically, the index reached a high of 26695.7 and currently trades at 26680.8, operating in uncharted territory which increases the risk of a sharp mean-reversion. The break above 26,000 acts as a significant structural floor, but the speed of the ascent suggests a potential liquidity test could see a retracement toward the 24,791.7 support zone.

Any failure to maintain the current trajectory could signal a transition from a parabolic rally into a period of choppy consolidation as the market digests these gains.

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The current strength in the NAS100 is less about a broad economic boom and more about the index acting as a proxy for the continuing AI secular trend. Institutional capital is being rotated away from defensive sectors and back into growth at any price, even as the Federal Reserve maintains a hawkish hold.

This decoupling from traditional interest rate sensitivity suggests that the market is prioritising technological transformation over the immediate cost of capital. However, a sudden upside surprise in inflation data remains the primary wildcard that could trigger a rapid de-grossing of positions.

The Why for Newbies: The NAS100 is highly sensitive to the 10-year Treasury yield. When yields rise, the discount rate for future earnings also rises, which theoretically makes tech stocks less valuable today. If the Nasdaq is rising while yields are high, it means investors believe the growth from AI will outpace the cost of the Fed high interest rates.

GBP/USD Analysis

The British Pound is currently navigating a period of seasonal strength, attempting to reclaim its status as a high-yield alternative to the Greenback. After hitting a low of 1.33589 earlier in the month, the pair has undergone a sustained bullish reversal to reach a periodic high of 1.35861.

This recovery is partially driven by a softening of the safe-haven bid for the US Dollar as geopolitical tensions show signs of a tentative de-escalation, allowing Cable to stabilise and currently trade at 1.35146.

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Sterling is now entering a period of significant political sensitivity as the 7 May UK General Election looms. Markets are starting to price in a populist fiscal shift, as both major parties release manifestos focused on easing the cost-of-living crisis.

We are seeing early signs of candidates promising to drop household energy bills and cut taxes to court the undecided vote. While this appeals to the electorate, it creates a structural headache for the Bank of England, as fresh fiscal stimulus could reignite the very inflation they are trying to cool.

Technically, the 1.33589 level has established itself as a critical structural floor, but the 7 May election introduces a volatility premium that could override traditional chart patterns. The inability to sustain a break above 1.35861 suggests that institutional players are hesitant to overextend their long positions until the political landscape is settled.

Should fiscal promises from the campaign trail appear to threaten the UK debt-to-GDP ratio, we could see a V-shaped liquidation of Sterling in favour of more stable G10 havens.

The Why for Newbies: The GBP/USD often moves based on interest rate differentials, but elections introduce political risk. When candidates promise to drop bills or increase spending, it can be inflationary. This puts the central bank in a tough spot: do they raise rates to fight the new spending, or do they let the currency weaken? Traders hate this uncertainty and often sell the currency until a clear winner emerges.

Strategic Linkage: The Risk-On Feedback Loop

There is a critical inter-market linkage currently binding the NAS100 and GBP/USD together: the collapse of the Safe Haven Premium. As the Nasdaq enters a parabolic phase, it signals a massive return of global risk appetite. When investors are comfortable buying high-beta tech at record highs, they simultaneously move out of the safety of the US Dollar. This capital rotation creates a natural tailwind for the Pound, as it is one of the primary beneficiaries of a weakening Dollar in a risk-on environment.

However, this linkage creates a dual-threat vulnerability. If the NAS100 experiences a V-shaped breakdown due to a poor earnings report or a geopolitical shock, the resulting flight to safety would likely crush the Pound simultaneously. In 2026, the correlation between US equity strength and G10 currency recovery has tightened; essentially, the Pound is currently trading as a high-beta proxy for global growth. Traders must understand that a technical failure in the Nasdaq is almost certainly a leading indicator for a liquidation in Cable.

Forward-Looking Considerations

As we transition toward the 7 May election window, the primary narrative to watch is populist fiscalism. If candidates continue to compete on who can drop utility bills and taxes the furthest, the market may begin to fear a repeat of previous fiscal shocks. This would likely cause a decoupling where the Pound ignores the US Dollar strength and reacts purely to domestic spending fears. Traders should watch for any sudden spikes in UK Gilt yields as a signal that the bond market is losing patience with election-year promises.

Surrounding the talk of BRICS Energy Decoupling, there are emerging reports that a new multi-currency clearing system for energy is being tested by several non-aligned nations. If this structural shift begins to bypass the Petrodollar, we could see a V-shaped breakdown in USD dominance that ignores interest rate spreads entirely. For traders, this means that traditional correlations may break down, requiring a more nuanced approach to G10 pairs that traditionally rely on dollar-denominated liquidity.

Finally, we must consider the AI Productivity Shock. While the Nasdaq is currently rising on hype, we are approaching the quarterly earnings season where tech giants must prove that AI is actually hitting the bottom line. If margins show a V-shaped contraction because the cost of AI infrastructure is higher than the revenue it generates, the NAS100 could face a systemic liquidation event regardless of what the Fed does. Traders should keep a close eye on cloud infrastructure margins as the true leading indicator for the next leg of this market cycle.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher on Thursday, with both the S&P 500 index and Nasdaq Composite extending the previous session’s record highs amid optimism over potential US-Iran truce talks, even as oil prices continued to rise.

The Wall Street Journal reported that the US and Iran have agreed in principle to hold fresh talks, after an initial round of negotiations last weekend in Pakistan did not yield an immediate deal. Citing officials familiar with the matter, the paper said both sides have not set a time or venue for the meeting but noted that Vice President JD Vance is again due to lead the American delegation in any future discussions with the Iranians.

A further boost to conflict de-escalation hopes came after President Trump said on Thursday that Israel and Lebanon had agreed to a ceasefire.

However, friction remained between the US and Iran over an ongoing American naval blockade of Iranian ports. A top military commander in Iran warned Washington not to continue the blockade, which US Central Command has claimed has not been evaded by any Iranian-linked commercial ship and oil tankers.

Secretary of War Pete Hegseth on Thursday told reporters the US military was set to resume major combat operations at "literally a moment’s notice" should Iran not agree to a peace deal, urging Tehran to "choose wisely."

Crude prices rose to just below the $95 a barrel level again, remaining well above pre-war levels, as traders gauge the impact of a prolonged closure of the Strait of Hormuz I. global energy supplies

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US WTI crude futures gained 2.1% to $93.20 a barrel, while UK Brent crude futures added 3.2% to $98.01 a barrel.

Elsewhere with commodities, precious metal prices were cautious as safe haven support faded and the US dollar found some gains.

The spot gold price slipped 0.01% to $4,789 an ounce, while the spot silver price shed 0.7% to $78.30 an ounce.

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On foreign exchanges, the US dollar edged higher as investors focused on some data which failed to change the expectations that Federal Reserve monetary policy will remain on hold for the foreseeable future.

The Dollar Index, which measures the greenback against six major currencies, was up 0.2% to 98.21.

Thursday’s US economic data saw a lower-than-anticipated rise in initial jobless claims for the past week, and an unexpected slide in March industrial production on a month-on-month basis.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.2% to 48,578, while the broader S&P 500 index added 0.3% to 7,041, and the tech-laden Nasdaq Composite gained 0.4% to 24,102.

Among the movers, chipmakers were higher after Taiwanese chip manufacturing giant TSMC posted strong first-quarter results on Thursday that included its highest gross margin in more than 20 years. Advanced Micro Devices added 5.1%, while Intel gained 7.8%, and Broadcom rose 0.4%.

However, AI chip giant Nvidia missed out, shedding 0.3% and failing to notch up a 12-day winning streak which would have been its longest on record, going back to 1999, having jumped about 20.0% in that period.

Elsewhere on the earnings front, Netflix reported its latest numbers after the market close on Thursday and ahead of the release the streaming firm ended the session just 0.1% higher. But, in after-hours trade, the stock dropped 8.7% as though first quarter earnings beat forecasts, forward guidance disappointed and its co-founder Reed Hastings announced his departure.

Abbott Laboratories shed 6.0% after the medical devices and nutrition company gave a 2026 forecast that disappointed analysts.

But PepsiCo gained 2.3% after the food and beverage group posted better-than expected first-quarter results, helped by price cuts.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Global markets are showing early signs of recalibration as the recent surge in the US Dollar begins to lose momentum. After pushing toward the 100 level, the DXY index has struggled to extend gains, easing pressure on risk-sensitive assets and allowing a partial recovery across currencies and equities.

US Treasury yields remain elevated, with the 10-year holding near 4%, indicating that the broader “higher-for-longer” narrative has not fully dissipated. However, the absence of fresh upside in yields and a stabilisation in geopolitical headlines have reduced the intensity of safe-haven flows into the Dollar.

At the same time, commodity markets remain relatively firm. Oil prices continue to reflect underlying supply risks, while precious metals hold near elevated levels. This combination has created a more supportive backdrop for resource-linked currencies, particularly the Australian dollar.

AUDUSD has staged a notable rebound after its recent breakdown below 0.70, climbing back toward the 0.69–0.70 region. While the pair has yet to fully reclaim the 0.70 handle, the price action suggests that the previous downside momentum is losing traction.

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Importantly, this recovery should not be interpreted as a full reversal in trend, but rather as a counter-move driven by a moderation in Dollar strength.

From a macro perspective, the key driver remains the US Dollar. The earlier rally was fueled by a combination of geopolitical risk and energy-linked dynamics, which temporarily boosted demand for USD assets. However, as markets begin to reassess the sustainability of these factors, the marginal bid for the Dollar has weakened.

In parallel, Australia’s exposure to commodities is once again providing relative support. With bulk commodities and energy prices holding up, the terms-of-trade effect is preventing a deeper depreciation in the currency.

From a positioning standpoint, the sharp move below 0.70 likely triggered a build-up in short AUD positions. The current rebound therefore also reflects a degree of short covering, amplifying the upside move in the near term.

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Technically, the 0.70 level remains the key pivot. A sustained break back above this level would signal a broader stabilisation phase, while failure to reclaim it could see the pair revert toward 0.68. For now, the bias has shifted from outright bearish to neutral with a recovery tilt.

The ASX200 has also shown signs of stabilisation following its recent drawdown, with the index holding above the 8,400 region and attempting to build a base. The easing in Dollar strength and the rebound in the Australian dollar have contributed to improved sentiment at the margin.

However, the broader backdrop remains challenging. Elevated interest rates continue to weigh on valuation multiples, particularly in rate-sensitive sectors such as financials, real estate, and consumer discretionary.

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At the same time, the earlier surge in oil prices is beginning to feed through into cost structures, raising concerns around margin compression and potential earnings downgrades. This dynamic suggests that the recent stabilization is more reflective of positioning adjustment rather than a fundamental shift.

On the positive side, resource and energy stocks continue to provide a degree of support. Strong commodity prices are underpinning earnings expectations in these sectors, partially offsetting weakness elsewhere in the index.

From a flow perspective, any moderation in Dollar strength could reduce the relative pull of US assets and allow for a more balanced global allocation. This would be a constructive development for Australian equities, though it remains conditional on broader risk sentiment holding steady.

The latest rebound in AUDUSD does not yet signal a structural turnaround, but it does mark an important shift in market dynamics.

The narrative is evolving from Dollar dominance to Dollar consolidation, and that alone is sufficient to trigger a repricing across currencies and equities.

For now, both the Australian dollar and the ASX200 are transitioning from a phase of sharp downside pressure into one of tentative stabilisation. Whether this develops into a sustained recovery will depend on the next move in US yields, the persistence of geopolitical risk, and the resilience of global growth expectations.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher on Monday as earnings reports came into focus even though oil prices rose as a US blockade of the Strait of Hormuz came into effect following the collapse of weekend peace negotiations with Iran.

The talks, held in Pakistan, ended with the US accusing Tehran of refusing to curb its nuclear ambitions, while Iran reportedly sought control of the key strait, war reparations, a broader regional ceasefire including Lebanon and access to frozen overseas assets.

The stock market started weaker but rallied late on amid hopes that negotiations between the US and Iran would continue despite the failed initial talks. Sentiment also turned after the US military’s Central Command clarified that it will target only Iranian ships and ports in the blockade announced by President Trump on Sunday.

The Hormuz shipping route has effectively been closed since the Middle East conflict began, driving sharp gains in oil and gas prices and raising concerns about inflationary pressures and global growth.

However, Saudi Arabia revealed it has restored full pumping capacity through its East-West pipeline to the Red Sea, which along with output from the Manifa field eased some of the Hormuz supply issues and saw crude prices par back their early gains to trade back below $100 a barrel.

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US WTI crude futures were up 1.5% to $98.05 a barrel, while UK Brent crude futures added 3.3% to $98.31 a barrel.

Elsewhere with commodities, gold prices were easier with the fresh Middle East uncertainties but recovered from lows as the US dollar reversed earlier gains.

The spot gold price eased 0.1% to $4,741 an ounce, while the spot silver price lost 0.5% to $75.39 an ounce.

On foreign exchanges, the dollar fell back to extend recent weakness after headline US inflation data for March, released last Friday, proved strong. The Dollar Index, which measures the greenback against six major currencies, shed 0.3% to 98.39.

The US consumer price index (CPI) accelerated sharply in March, though it was much as forecast, largely driven by a jump in energy costs due to the Iran war. Energy prices spiked by 12.5% on an annualised basis last month, from 0.5% in February.

However, stripping out volatile items like food and fuel, core CPI was up 2.6% year-on-year and 0.2% month-on-month, both lower than forecast.

Given the fairly tepid core numbers, the Fed may decide not to put too much weight on the March reading and await more inflation data before deciding what action to take on interest rates in the months ahead.

March US producer price index (PPI) data will be released latest this week, the first set of wholesale inflation numbers that will fully include the impact of the war in Iran.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.6% to 48,218, while the broader S&P 500 index gained 1.0% to 6,886, and the tech-laden Nasdaq Composite rose 1.2% to 23,183.

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Earnings from major Wall Street banks, which will be the main corporate focus this week, kicked off on Monday with results from Goldman Sachs.

The investment bank saw its profit jump 19% in the first quarter, powered by a resurgence in deal activity and volatile markets. But Goldman’s stock still fell 1.9% on worries over the outlook.

However, other major banks due to report this week found some gains, with JPMorgan Chase up 1.2%, Citigroup ahead 1.5%, Bank of America gaining 1.5% and Morgan Stanley adding 2.0%.

Chipmakers were aided by strong March revenue figures from bellwether Taiwanese TSMC, which is set to report its full first-quarter earnings later in the week. Intel rose 4.1% and Advanced Micro gained 0.7%.

And software stocks rebounded after three straight sessions of losses caused by concerns over disruptions from AI advancements, especially Anthropic’s Claude Mythos model. Workday took on 6.6% and Atlassian added 7.7%.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher after a roller coaster session on Thursday, rallying in the afternoon after Israel said it would start direct ceasefire negotiations with Lebanon.

Renewed Israeli strikes on Lebanon on Wednesday had raised doubts about the fresh inked two-week US-Israeli ceasefire deal with Iran, especially as the opening of the key Strait of Hormuz waterway remained contentious.

US Vice President JD Vance told reporters that there are indications that Hormuz may begin reopening as he led a US delegation to Islamabad for direct talks with Iranian officials in Pakistan this weekend.

Meanwhile, Iran told mediators it would limit the number of ships crossing the key waterway to around a dozen a day and charge tolls.

The near shutdown of Hormuz, which handles about 20% of global crude and gas flows, has severely disrupted energy supplies, in tandem with missile and drone strikes on energy infrastructure in the region which could a long while to be repaired.

As sentiment over the waterway’s opening ebbed and flowed, US WTI crude futures rose 4.8% to $98.20 a barrel, while UK Brent crude futures added just 0.3% to $95.08 a barrel.

Elsewhere with commodities, precious metals prices received a boost from renewed safe haven buying, together with further weakness in the US dollar.

The spot gold price gained 1.0% to $4,765 an ounce, and the spot silver price added 1.6% to $75.22 an ounce.

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On foreign exchanges, the dollar continued to ease back after recent strength unsettled by worries over the economic situation in the US, with inflation remaining a concern as the labour market looks fragile.

The Dollar Index, which measures the greenback against six major currencies, shed 0.3%% to 98.81.

Data released on Thursday showed the Federal Reserve’s preferred measure of inflation ticking higher even before the war against Iran began last month.

The US personal consumption expenditures (PCE) price index rose by 0.4% in February, up from a 0.3% increase in January. The 12-month PCE inflation rate held steady at 2.8%.

Excluding volatile food and energy prices, the monthly increase in the core version of the index was also 0.4%, in line with analysts' expectations. But the core annual rate did tick down to 3.0%, from 3.1%.

A more telling reading on US inflation will arrive on Friday in the form of the March consumer price index (CPI) which should show the first impact from the fuel cost spike on prices.

In other data released on Thursday, US initial jobless claims increased to 219,000 in the latest week, higher than the expected figure of 209,000. Meanwhile, the continuing claims figure fell to 1.794 million, the lowest level since May 2024.

And US fourth-quarter GDP growth was revised down to an annualised rate of 0.5%, from a previous estimate of 0.7% and an initial estimate of 1.4%, after growth of 4.4% in the third quarter.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.6% to 48.185, while the broader S&P 500 index rose 0.6% to 6,824, and the tech-laden Nasdaq Composite gained 0.8% to 22,822.

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Among the gainers, Constellation Brands gained 8.5% as the importer of Modelo and Corona beers unveiled an earnings beat and a smaller than expected drop in revenue for its latest quarter, though it withdrew its forward guidance.

Walt Disney added 0.2% after the Wall Street Journal reported that the entertainment company is planning to make sizable layoffs in one of the first significant moves under new CEO Josh D’Amaro.

And energy companies rallied with oil prices after posting steep losses on Wednesday, with Exxon Mobil up 1.0% and Chevron ahead 0.4%. Chevron revealed that its upstream earnings were expected to rise by $1.6 billion to $2.2 billion in the first quarter of 2026 driven by oil and gas price volatility linked to the Iran war.

But software issues fell on fresh worries over disruption from artificial intelligence (AI) as Meta Platforms unveiled a new AI model while Anthropic launched its Claude tools for building agents. In the weak sector, Workday shed 4.9%, Altassian lost 5.0%, and Guidewire Software fell 7.0%.

Palantir Technologies, down 7.3%, was also unsettled by comments from renowned short seller Michael Burry about the competitive threats to the firm from Anthropic.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher after a roller coaster session on Thursday, rallying in the afternoon after Israel said it would start direct ceasefire negotiations with Lebanon.

Renewed Israeli strikes on Lebanon on Wednesday had raised doubts about the fresh inked two-week US-Israeli ceasefire deal with Iran, especially as the opening of the key Strait of Hormuz waterway remained contentious.

US Vice President JD Vance told reporters that there are indications that Hormuz may begin reopening as he led a US delegation to Islamabad for direct talks with Iranian officials in Pakistan this weekend.

Meanwhile, Iran told mediators it would limit the number of ships crossing the key waterway to around a dozen a day and charge tolls.

The near shutdown of Hormuz, which handles about 20% of global crude and gas flows, has severely disrupted energy supplies, in tandem with missile and drone strikes on energy infrastructure in the region which could a long while to be repaired.

As sentiment over the waterway’s opening ebbed and flowed, US WTI crude futures rose 4.8% to $98.20 a barrel, while UK Brent crude futures added just 0.3% to $95.08 a barrel.

Elsewhere with commodities, precious metals prices received a boost from renewed safe haven buying, together with further weakness in the US dollar.

The spot gold price gained 1.0% to $4,765 an ounce, and the spot silver price added 1.6% to $75.22 an ounce.

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On foreign exchanges, the dollar continued to ease back after recent strength unsettled by worries over the economic situation in the US, with inflation remaining a concern as the labour market looks fragile.

The Dollar Index, which measures the greenback against six major currencies, shed 0.3%% to 98.81.

Data released on Thursday showed the Federal Reserve’s preferred measure of inflation ticking higher even before the war against Iran began last month.

The US personal consumption expenditures (PCE) price index rose by 0.4% in February, up from a 0.3% increase in January. The 12-month PCE inflation rate held steady at 2.8%.

Excluding volatile food and energy prices, the monthly increase in the core version of the index was also 0.4%, in line with analysts' expectations. But the core annual rate did tick down to 3.0%, from 3.1%.

A more telling reading on US inflation will arrive on Friday in the form of the March consumer price index (CPI) which should show the first impact from the fuel cost spike on prices.

In other data released on Thursday, US initial jobless claims increased to 219,000 in the latest week, higher than the expected figure of 209,000. Meanwhile, the continuing claims figure fell to 1.794 million, the lowest level since May 2024.

And US fourth-quarter GDP growth was revised down to an annualised rate of 0.5%, from a previous estimate of 0.7% and an initial estimate of 1.4%, after growth of 4.4% in the third quarter.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.6% to 48.185, while the broader S&P 500 index rose 0.6% to 6,824, and the tech-laden Nasdaq Composite gained 0.8% to 22,822.

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Among the gainers, Constellation Brands gained 8.5% as the importer of Modelo and Corona beers unveiled an earnings beat and a smaller than expected drop in revenue for its latest quarter, though it withdrew its forward guidance.

Walt Disney added 0.2% after the Wall Street Journal reported that the entertainment company is planning to make sizable layoffs in one of the first significant moves under new CEO Josh D’Amaro.

And energy companies rallied with oil prices after posting steep losses on Wednesday, with Exxon Mobil up 1.0% and Chevron ahead 0.4%. Chevron revealed that its upstream earnings were expected to rise by $1.6 billion to $2.2 billion in the first quarter of 2026 driven by oil and gas price volatility linked to the Iran war.

But software issues fell on fresh worries over disruption from artificial intelligence (AI) as Meta Platforms unveiled a new AI model while Anthropic launched its Claude tools for building agents. In the weak sector, Workday shed 4.9%, Altassian lost 5.0%, and Guidewire Software fell 7.0%.

Palantir Technologies, down 7.3%, was also unsettled by comments from renowned short seller Michael Burry about the competitive threats to the firm from Anthropic.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

UK stocks ended sharply higher on Wednesday as oil prices dropped after President Trump delayed his threat to attack Iranian civilian infrastructure by two weeks in what he described as a double-sided ceasefire contingent on Iran reopening the Strait of Hormuz.

Trump said the US had received a 10-point proposal from Iran that he described as a “workable basis for negotiations,” with the two-week window allowing the potential agreement to be finalised and implemented. Israel has also assented to the temporary ceasefire.

Iran has agreed to reopen the Strait of Hormuz for the two week period provided all attacks are halted, though adding that transit through the key waterway would need to be coordinated with its Armed Forces.

Oil prices fell on expectations for a supply boost from a reopening of the Strait of Hormuz through which about 20% of global oil flows. The closure of Hormuz has roiled energy markets as supply constraints battled with heightened risks that rising inflation and a global economic slowdown would hit demand.

UK Brent crude futures shed 12.9% to $95.13 a barrel, while US WTI crude futures lost 15.8% to $95.01 a barrel.

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Meanwhile precious metals prices rose on hopes for the ceasefire holding in the Middle East and as the US dollar, in which they are priced, took a tumble, the spot gold price was up 1.1% to $4,755 an ounce, while the spot silver price gained 3.6% to $75.49 an ounce.

The Dollar Index, which measures the greenback against six major currencies, dropped 1.0% to 98.91 having been boosted by safe haven buying over the past few weeks.

Elsewhere on foreign exchanges, the pound saw its biggest one-gain in three weeks as the prospect of a sustained truce and lower oil prices eased worries over spiralling inflation although it failed to alter UK rate hike expectations.

Traders had been pricing in the prospect of at least two ‌rate hikes by the Bank of England this year due to theenergy cost spike from the US/Israel war against Iran. That has now been scaled back to just one hike in 2026, with an outside chance of a second.

Sterling jumped 0.98% versus the US dollar to 1.3422 and added 0.23% versus the euro to 1.1490.

At the stock market close in London, the blue-chip FTSE 100 index was up 2.5% at 10,608, while the broader FTSE 250 index jumped 4.1% to 22,434.

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Among the blue chips, copper miner Antofagasta rose 9.9%, while gold miner Fresnillo took on 7.6% as metal prices rebounded after the Middle East ceasefire improved the economic outlook.

Travel issues also rallied, with easyJet adding 10.0% and British Airways and Iberia owner IAG gaining 8.1%. However, Willie Walsh, the head of the International Air Transport Association (IATA), cautioned that it will take months for jet fuel supplies and prices to normalise even with the Strait of Hormuz open.

Oil majors dropped with the weaker crude price, BP shedding 5.8% and Shell losing 4.7% In a pre-close season update ahead of upcoming results, Shell reported that output in its first quarter was hurt by the conflict in the Middle East impacting Qatari volumes, though the firm’s refining margins increased.

British Gas owner Centrica also fell, losing 2.4%, with gas prices also deflating with the Middle East ceasefire move.

On the FTSE 250, oil producers were almost the only fallers, with Diversified Energy, Ithaca Energy, and Harbour Energy shedding 7.4%, 6.2% and 6.1%, respectively.

But on the up, financial group Close Brothers climbed 13.1% after announcing that having reviewed the UK Financial Conduct Authority's final motor finance mis-selling verdict it has put the cost of the redress scheme at around £320 million, broadly similar to its existing provision of £294 million.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Amid a renewed global energy shock driven by escalating geopolitical tensions in the Middle East, the Australian dollar has displayed a degree of resilience that has surprised many market participants. While several major currencies—particularly those of energy-importing economies—have come under pressure, the AUD has held relatively firm. At first glance, this performance appears to validate the long-standing commodity currency narrative. However, a closer examination reveals a more nuanced reality.

Australia’s external position remains a critical pillar supporting the currency. The country is one of the world’s largest exporters of liquefied natural gas and coal, with energy commodities forming a substantial share of its export base. In 2022–23, Australia’s energy export earnings reached approximately A$238.7 billion, driven by LNG exports of A$92.2 billion and thermal coal exports of A$65.5 billion. More broadly, total resource and energy export earnings are expected to remain elevated at around A$380–A$385 billion in 2025–26.

Chart 1

Australian energy production, consumption and export chart. Source: Geoscience Australia

This export strength provides a powerful terms-of-trade buffer. As global energy prices rise, Australia benefits from increased export revenues and stronger trade surpluses, supporting demand for the AUD in global markets. Structurally, Australia is a net energy exporter, with energy exports accounting for a dominant share of total resource exports. In relative terms, this positions Australia more favourably than major energy importers such as Japan or the Eurozone, where rising oil and gas prices directly deteriorate trade balances and weigh on currencies.

However, this external strength masks a critical internal vulnerability. Despite its status as a major exporter of raw energy commodities, Australia remains heavily dependent on imports of refined fuels, with roughly 80 to 90 percent of transport fuels sourced from overseas. This creates a paradoxical dynamic: while the country benefits from high export prices, its domestic economy simultaneously absorbs the inflationary shock of elevated global energy costs. Rising fuel prices feed directly into transportation, production, and household expenses, tightening financial conditions and constraining consumption.

Chart 2: Australian energy consumption by fuel type. Source: Energy.gov.au

This divergence between external strength and internal weakness is increasingly relevant for monetary policy. Elevated energy prices contribute to persistent inflation, limiting the Reserve Bank of Australia’s flexibility to ease policy even as growth slows. The result is a stagflationary undercurrent, where the currency is supported by trade dynamics but undermined by deteriorating domestic demand.

Moreover, the AUD’s performance cannot be understood solely through the lens of energy exports. The currency remains deeply tied to global growth cycles and, critically, to China’s economic trajectory. Recent data already point to structural headwinds. Australian LNG exports have softened, with shipments declining modestly year-on-year and Chinese demand contracting significantly. This highlights a key vulnerability: commodity demand is not immune to global slowdown risks.

AUDUSD Daily

In this context, the current resilience of the Australian dollar should be interpreted less as outright strength and more as relative insulation. Energy exports are acting as a stabilizing force, preventing sharper depreciation rather than driving sustained appreciation.

Looking ahead, the trajectory of the AUD will hinge on the balance between these competing forces. If energy prices remain elevated and global demand holds, the currency may continue to find support. However, should the energy shock evolve into a broader growth slowdown—particularly in China—the underlying fragility of the AUD is likely to re-emerge.

In essence, Australia is exporting the benefits of the energy crisis while importing its economic costs. The currency’s resilience, therefore, may prove more temporary than structural.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher on Easter Monday even as oil prices also rose as President Trump said talks with Iran were ongoing although Tehran formally rejected a 45-day US ceasefire proposal.

Iran’s Foreign Ministry dismissed the temporary truce offer made through Pakistani mediators and demanded a permanent end to hostilities and the lifting of sanctions as a prerequisite for any agreement.

In a news conference on Monday, Trump said Iran’s counter proposal wasn’t good enough for a cease-fire but added that "it’s a significant step.”

Meanwhile, the US President reiterated a strict Tuesday night deadline for Iran to reopen the key Strait of Hormuz waterway or face the destruction of its power plants and bridges.

With Hormuz closed, tanker traffic remains 90% below pre-Middle East conflict levels as major exporters face significant disruptions from missile attacks. Israel struck Iran’s largest petrochemical facility overnight while Tehran targeted energy infrastructure in Kuwait.

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US WTI crude futures were up 0.8% to $112.41 a barrel, while UK Brent crude futures added 0.3% to $109.30 a barrel.

Elsewhere, precious metals prices were mixed as investors eyed the diverse reports on the potential for a ceasefire in the US/Israel war on Iran.

The spot gold price shed 0.5% to $4,655 an ounce, but the spot silver price added 0.05% to $72.94 an ounce.

On foreign exchanges, the US dollar edged lower as investors assessed the March non-farm payrolls report released on the Good Friday holiday. The Dollar Index, which measures the greenback against six major currencies, slipped 0.02%% to 100.00.

The data showed that 178,000 jobs were added last month, significantly higher than the consensus estimate of 60,000. The increase was driven by the end of a strike by healthcare workers and warmer weather.

The reading underscored the see-saw nature of the US labour market seen so far this year, with non-farm payrolls revised up to 160,000 for January, while the February number was revised down to a fall of 133,000.

Traders were also cautious ahead of the March US consumer price index (CPI) report scheduled for Friday, which will show the first impact on inflation from the Middle East conflict.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.4% to 46,669, while the broader S&P 500 index also rose 0.4% to 6,611, and the tech-laden Nasdaq Composite gained 0.5% to 21,996.

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Among the movers, Tesla fell 4.9% after analysts at JPMorgan reduced earnings estimates for the electric vehicles maker, citing weaker-than-expected deliveries in the first quarter.

But cryptocurrency firm Coinbase gained 1.9% and Strategy added 6.6% on the back of strength for bitcoin and other cryptos.

Meanwhile, Paramount Skydance rose 3.5% after it secured signed equity commitments of close to $24 billion from three sovereign-wealth funds led by Saudi Arabia to help back its takeover of Warner Bros. Discovery.

And the world's largest meatpacker JBS added 0.7% after its workers in Colorado agreed to end a three-week strike.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Global markets remained in a cautious risk environment, with asset pricing increasingly shaped by geopolitical tensions and persistent inflation risks. The escalation in the Middle East has reinforced demand for safe-haven assets, driving the US Dollar higher, with the DXY index pushing toward the 100 level after recently trading above 100.5.

At the same time, US Treasury yields remain elevated, with the 10-year yield holding around the 4% mark, reflecting a “higher-for-longer” interest rate environment. Commodities continue to trade at elevated levels, particularly crude oil, as supply risks tied to geopolitical disruptions remain unresolved.

Within this macro framework, both the Australian dollar and Australian equities are facing a dual pressure from external shocks and domestic sensitivity to energy-driven inflation.

AUDUSD has extended its downside move this week, decisively breaking below the key 0.70 psychological level and trading in the 0.68–0.69 range. This move marks a clear shift in market structure, with 0.70 transitioning from a previous range midpoint into a firm resistance level.

AUDUSD Daily

The primary driver of this decline is not an isolated deterioration in Australia’s domestic outlook, but rather a repricing of the US Dollar as both a safe-haven and an energy-linked beneficiary.

Firstly, from a rates perspective, while US policy rates remain elevated, the more important shift has been the persistence of high real yields. With US 10-year yields holding near 4%, the relative attractiveness of USD-denominated assets remains strong, particularly in a risk-off environment.

Secondly, geopolitical escalation has reintroduced a meaningful risk premium into the Dollar. As tensions surrounding key energy routes intensify, global capital has rotated back into USD assets, reinforcing broad-based Dollar strength. This dynamic has placed high-beta currencies such as the Australian dollar under pressure.

From a technical perspective, the break below 0.70 is significant. Immediate support is now seen around the 0.68 region, with downside risks extending toward 0.66 if Dollar strength persists. On the upside, any recovery would first need to reclaim 0.70 to shift short-term momentum.

The ASX200 has shown signs of stabilisation following a sharp drawdown, with the index rebounding modestly toward the 8,450–8,500 region. However, this recovery should be viewed in context. The index declined approximately 7.8%–7.9% over March, marking one of its weakest monthly performances in recent years.

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Sector dynamics highlight a clear divergence beneath the surface.

Energy stocks have provided partial support, benefiting from elevated oil prices and improved earnings expectations. Resource-linked names have also remained relatively resilient, supported by sustained strength in commodity markets.

However, interest rate-sensitive sectors continue to face pressure. Financials, real estate, and consumer-related stocks are increasingly exposed to the combined effects of higher funding costs and rising input prices. As energy costs feed through the economy, margins are expected to compress, raising the risk of earnings downgrades.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended mixed on Monday with blue chips stabilising after a sell-off last week but other indexes dropping as oil prices pushed higher once again amid signs that the war in Iran could intensify.

With one session to go, crude prices are poised for a record monthly surge of more than 50% in March, as the Middle East conflict continues to disrupt supplies.

President Trump once again threatened attacks on Iran’s energy infrastructure, which overshadowed his earlier remarks that a deal to end the hostilities could be near.

The US leader warned that if no agreement is reached soon and the key Strait of Hormuz waterway is not immediately opened for business, the US could target Iran’s power plants, oil wells, and Kharg Island.

Prices had already climbed following the deployment of further US troops in the region and the involvement of Yemen’s Iran-backed Houthis in the conflict which could disrupt an alternate shipping route via the Red Sea.

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US WTI crude futures jumped 5.0% to $104.62 a barrel, while UK Brent crude futures rose 1.7% to $114.45 a barrel.

On foreign exchanges, the US dollar rallied on safe-haven buying and as a sharp sell-off in bonds eased following some positive comments from Federal Reserve Chair Jerome Powell.

Participating in a moderated discussion at Harvard University, the Fed boss largely reiterated remarks he had made on the Middle East conflict earlier this month at the conclusion of the Fed’s last meeting.

Powell said monetary policy was in a good place to “wait and see” the effects of surging oil prices on US inflation and the economy, adding that the central bank did not know what the impact would be.

Still, the Fed chair said that "inflation expectations do appear to be well anchored beyond the short term" and that the right move was to look past energy supply shocks.

The Dollar Index, which measures the greenback against six major currencies, added 0.4% to 100.51 hovering near a 10-month high and on pace for its biggest monthly increase since July 2025.

Elsewhere, precious metals also benefited from Powell’s mostly reassuring comments despite the stronger dollar in which they are priced.

The spot gold price gained 0.3% to $4,508 an ounce, and the spot silver price added 0.6% to $70.04 an ounce.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 0.1% to 45,216, but the broader S&P 500 index shed 0.4% to 6,340, and the tech-laden Nasdaq Composite dropped 0.8% to 20,794.

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Among the movers, aluminium producers jumped following missile strikes by Iran on critical infrastructure for the metal in the Middle East, sparking concerns over global supply. Alcoa rose 8.3%, while Century Aluminium gained 7.3%.

Tech fallers were led by weaker semiconductor and storage stocks, with Marvell Tech down 7.5% and Western Digital off 8.6%.

Meanwhile, chipmakers and equipment suppliers were also under pressure, with Intel losing 4.1%, and Applied Materials shedding 4.2%.

Elsewhere, on the news front. Sysco dropped 15.3% as the food distributor struck a deal to acquire family-owned Jetro Restaurant Depot for around $29 billion.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Global markets are currently navigating a period of intense structural repricing as the US Dollar exerts a near-totalitarian grip on capital flows. This resurgence is not merely a cyclical swing but a direct consequence of the Federal Reserve aggressive stance against a persistent inflationary backdrop, which has effectively weaponised real yields at 4.2 per cent. As liquidity is drained from the periphery, high-beta currencies and non-yielding commodities are facing a systematic purge. The current market regime is one of high-conviction deleveraging, where the cost of capital is forcing a brutal revaluation of all risk-sensitive assets.

All times mentioned in this report are in Beijing time.

Silver (XAG/USD) Analysis

Silver is currently navigating a period of structural fragility, characterised by a sharp impulsive decline followed by a precarious attempt at a technical floor. After hitting a high of 79.891 on March 18, the metal faced a liquidity test that saw prices plummet to a low of 62.875 by March 23. This staggering 21 per cent correction in under a week highlights the extreme leverage often present in the silver markets and the speed at which institutional capital can rotate during a flight to quality. Currently, silver trades at 69.909, sitting at the apex of a descending wedge where bulls and bears are battling for control of the psychological 70.000 handle.

XAGUSD H4

The H1 chart reveals an aggressive V-shaped recovery attempt following the March 23 capitulation, though the momentum has since shifted into a choppy consolidation phase. This price action suggests that while the initial sell-off was overextended, there is a lack of high-conviction buying to push back toward the 75.000 level. The current levels near 69.909 represent a supply zone where previous support has now flipped into resistance, complicating the path for further upside. We are observing significant order flow imbalance at these levels, as many retail traders are caught in underwater long positions

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Silver dual identity as both a precious metal and an industrial commodity is currently a source of friction. While long-term demand for AI-driven hardware and 5G infrastructure provides a structural floor, the immediate pressure from real Treasury yields rising to 4.2 per cent is acting as a significant headwind. The metal is currently trapped in a no-man's land, and a failure to reclaim the 73.300 level in the coming days could signal a secondary test of the 62.875 liquidity pool as the market shakes out remaining weak hands.

The Why for Newbies: Silver is often more volatile than gold because it lacks the same level of central bank dip buying. When the US Dollar strengthens, silver usually falls because it becomes more expensive for international buyers. Furthermore, if the Fed keeps rates high, investors prefer interest-bearing bonds over silver, which pays nothing to hold. This relationship is why silver often struggles when Treasury yields are on the rise.

NZD/USD Analysis

The NZD/USD pair has been under immense selling pressure throughout the latter half of March, reflecting a broader exodus from pro-growth currencies toward the US Dollar. After reaching a periodic high of 0.58870 on March 20, the pair entered a consistent bearish channel, printing lower highs and lower lows. This decline culminated in a fresh low of 0.57394 on March 27, and the pair is currently struggling to find its footing at 0.57429. The speed of this descent has outpaced many technical indicators, leaving the RSI in oversold territory for an extended period.

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Technically, the pair is hugging the lower boundary of its descending trendline, suggesting a state of bearish exhaustion or a potential liquidity sweep before any relief rally. The aggressive nature of the move from 0.58870 down to current levels indicates that institutional sellers are dominant, likely fuelled by the widening interest rate differential between the Federal Reserve and the Reserve Bank of New Zealand. Without a fundamental catalyst to shift the Greenback momentum, the path of least resistance appears to be toward the 0.57000 psychological floor.

The New Zealand Dollar, often viewed as a proxy for global trade and commodity demand, is suffering as concerns over a global stagflationary shock mount. The pair is currently trading well below its short-term moving averages, and any attempt at a bounce is being met with immediate supply near the 0.58150 level. Traders are watching the current 0.57400 zone closely; a failure to hold here would likely open the gates for a retest of the 0.56500 multi-year lows. The market is effectively pricing in a decoupling of the Kiwi from other commodity peers as domestic growth concerns intensify.

The Why for Newbies: The NZD/USD is a classic risk-sensitive pair. When the global economic outlook is cloudy or the Fed is hawkish, investors sell the Kiwi in favour of the US Dollar. Think of the NZD as a high-beta currency that thrives on optimism; when that optimism fades due to high interest rates, it tends to be one of the first major currencies to see sharp sell-offs

Forward-Looking Considerations

As we transition into April 2026, the primary narrative to watch is the Institutional Yield Rotation. With US CPI data for March scheduled for release on April 10 at 20:30 Beijing time, markets are braced for a potential upside surprise. If inflation remains stubbornly above 2.7 per cent, we could see a final capitulation in the NZD as the RBNZ is forced to stay on hold during their April 8 meeting, further widening the policy gap. This creates a scenario where the US Dollar becomes a black hole for global capital, sucking liquidity out of Oceania entirely and forcing a V-shaped breakdown of regional carry trades.

A more original wildcard for Silver is the Physical Vault Depletion in London and New York. While the paper price reflects USD strength, the physical lease rates for silver have spiked to multi-year highs. If the current price dip triggers another massive wave of industrial buying for the next generation of 800V AI data centres, we could witness a decoupling where silver spot prices begin to trade at a significant premium to futures. This would represent a structural breakout that ignores the DXY entirely, driven by the realization that supply cannot meet the inelastic needs of the semiconductor industry.

Finally, we must consider the Sovereign Credit Divergence. While the US manages its fiscal dominance, New Zealand is increasingly sensitive to the economic health of its regional trade partners. Any further deterioration in Asian manufacturing data would be a death knell for the NZD bulls, potentially pushing the pair toward a historic test of the 0.55000 level. Traders should be prepared for a high-volatility start to April, as the market balances the risk of a systemic credit event against the raw industrial demand for critical metals.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

UK stocks ended higher on Wednesday as oil prices eased back amid hopes for a potential resolution to the war in the Middle East, even as the latest UK inflation data proved mixed.

Data from the Office for National Statistics (ONS) showed that the consumer price index (CPI) in the 12 months to February showed no change from January’s reading of 3.0%, as forecast. However, core CPI, which strips out the more volatile prices of energy, food, alcohol and tobacco, edged up to 3.2% from 3.1%.

UK wholesale inflation data also proved mixed. Producer input prices were up 0.5% on an annualised basis in February, reversing a revised 0.4% decline in January and above expectations for a 0.4% increase. But producer output prices rose 1.7% on-year, slowing from a 2.5% increase in January and below expectations for a 2.6% advance.

Other ONS data showed average UK house prices were up 1.3% in the year to January, easing from December's 1.9% growth. The average monthly rate of house price growth in January fell 0.3%, with the average UK house price currently at £268,000.

Meanwhile, UK consumer sentiment this month was slightly weaker than three months earlier, according to a quarterly survey from accountants KPMG, reflecting worries about energy and grocery costs linked to the conflict in the Middle East. The report said 62% of Britons thought the economy was weakening, up from 58% in Q4 2025.

Oil prices retreated on Wednesday as US diplomatic efforts to end the war with Iran gained traction, overshadowing reports of additional US troop deployments and the near closure of the Strait of Hormuz.

The US has reportedly drafted a 15-point plan delivered to Iran via Pakistan to help resolve the conflict, even while around 2,000 soldiers from the 82nd Airborne Division were deployed to the region to support security at the vital waterway.

Iran is still reviewing a US proposal to end the war, despite an initial response that was negative, a senior Iranian official told Reuters on Wednesday, indicating that Tehran has so far stopped short of rejecting it outright.

UK Brent crude futures shed 1.6% to $102.85 a barrel, while US WTI crude futures fell 1.5% to $90.94 a barrel.

On foreign exchanges, the pound was cautious given the mixed UK inflation data and uncertainties over the conflict in the Middle East.

GBPUSD H1

Sterling slipped 0.01% versus the euro to 1.1553 and lost 0.35% versus the US dollar to 1.3364.

The Dollar Index, which measures the greenback against six major currencies, added 0.2% to 99.63.

Elsewhere, precious metals prices were higher helped by the steadier dollar and lower oil prices as investors eyed the situation in the Middle East.

The spot gold price gained 0.8% to $4,506 an ounce, while the spot silver price added 0.5% to $71.46 an ounce.

At the stock market close in London, the blue-chip FTSE 100 index was up 1.4% at 10,106, while the broader FTSE 250 index rose 1.6% to 21,475.

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Strength in heavyweight miners drove the blue-chip advance as metal prices rose, with Endeavour Mining up 4.5%, Fresnillo ahead 3.6%, and Anglo American adding 3.9%.

Oil majors went in diverse directions after analysts at Morgan Stanley upgraded the oil sector to 'attractive' from 'in line' and raised BP to 'overweight' from 'equal weight', but downgraded Shell to 'equal weight' from 'overweight. Shell shed 0.8%, while BP took on 1.3%.

Among the other blue-chip gainers, chemicals firm Croda rose 3.3% after an upgrade to 'overweight' from 'equal weight' by analysts at Morgan Stanley to reflect its inflation resilience.

And United Utilities gained 3.2% after saying full-year underlying earnings per share were expected to be in line with previous guidance.

But on the downside, renewed worries about artificial intelligence (AI) disruption weighed on Relx, down 1.5% and Experian, off 1.4%.

On the second line, RS Group dropped 4.0% after the industrial and electrical products distributor flagged a 0.6% fall in like-for-like annual revenue due to difficult markets, although it sees its annual adjusted pre-tax profit coming in marginally ahead of expectations.

However, ASOS jumped 13.0% after the online fashion retailer reported a near-50% jump in first half underlying profits as its turnaround continues to gain momentum.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

UK stocks ended higher on Wednesday as oil prices eased back amid hopes for a potential resolution to the war in the Middle East, even as the latest UK inflation data proved mixed.

Data from the Office for National Statistics (ONS) showed that the consumer price index (CPI) in the 12 months to February showed no change from January’s reading of 3.0%, as forecast. However, core CPI, which strips out the more volatile prices of energy, food, alcohol and tobacco, edged up to 3.2% from 3.1%.

UK wholesale inflation data also proved mixed. Producer input prices were up 0.5% on an annualised basis in February, reversing a revised 0.4% decline in January and above expectations for a 0.4% increase. But producer output prices rose 1.7% on-year, slowing from a 2.5% increase in January and below expectations for a 2.6% advance.

Other ONS data showed average UK house prices were up 1.3% in the year to January, easing from December's 1.9% growth. The average monthly rate of house price growth in January fell 0.3%, with the average UK house price currently at £268,000.

Meanwhile, UK consumer sentiment this month was slightly weaker than three months earlier, according to a quarterly survey from accountants KPMG, reflecting worries about energy and grocery costs linked to the conflict in the Middle East. The report said 62% of Britons thought the economy was weakening, up from 58% in Q4 2025.

Oil prices retreated on Wednesday as US diplomatic efforts to end the war with Iran gained traction, overshadowing reports of additional US troop deployments and the near closure of the Strait of Hormuz.

The US has reportedly drafted a 15-point plan delivered to Iran via Pakistan to help resolve the conflict, even while around 2,000 soldiers from the 82nd Airborne Division were deployed to the region to support security at the vital waterway.

Iran is still reviewing a US proposal to end the war, despite an initial response that was negative, a senior Iranian official told Reuters on Wednesday, indicating that Tehran has so far stopped short of rejecting it outright.

UK Brent crude futures shed 1.6% to $102.85 a barrel, while US WTI crude futures fell 1.5% to $90.94 a barrel.

On foreign exchanges, the pound was cautious given the mixed UK inflation data and uncertainties over the conflict in the Middle East.

GBPUSD H1

Sterling slipped 0.01% versus the euro to 1.1553 and lost 0.35% versus the US dollar to 1.3364.

The Dollar Index, which measures the greenback against six major currencies, added 0.2% to 99.63.

Elsewhere, precious metals prices were higher helped by the steadier dollar and lower oil prices as investors eyed the situation in the Middle East.

The spot gold price gained 0.8% to $4,506 an ounce, while the spot silver price added 0.5% to $71.46 an ounce.

At the stock market close in London, the blue-chip FTSE 100 index was up 1.4% at 10,106, while the broader FTSE 250 index rose 1.6% to 21,475.

UK100Roll Daily

Strength in heavyweight miners drove the blue-chip advance as metal prices rose, with Endeavour Mining up 4.5%, Fresnillo ahead 3.6%, and Anglo American adding 3.9%.

Oil majors went in diverse directions after analysts at Morgan Stanley upgraded the oil sector to 'attractive' from 'in line' and raised BP to 'overweight' from 'equal weight', but downgraded Shell to 'equal weight' from 'overweight. Shell shed 0.8%, while BP took on 1.3%.

Among the other blue-chip gainers, chemicals firm Croda rose 3.3% after an upgrade to 'overweight' from 'equal weight' by analysts at Morgan Stanley to reflect its inflation resilience.

And United Utilities gained 3.2% after saying full-year underlying earnings per share were expected to be in line with previous guidance.

But on the downside, renewed worries about artificial intelligence (AI) disruption weighed on Relx, down 1.5% and Experian, off 1.4%.

On the second line, RS Group dropped 4.0% after the industrial and electrical products distributor flagged a 0.6% fall in like-for-like annual revenue due to difficult markets, although it sees its annual adjusted pre-tax profit coming in marginally ahead of expectations.

However, ASOS jumped 13.0% after the online fashion retailer reported a near-50% jump in first half underlying profits as its turnaround continues to gain momentum.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

lobal markets are tied to the geopolitical rollercoaster as investors constantly reprice for risks, de-escalation and potentially an acceleration of the downward spiral in the Middle East. Rumours that Saudi Arabia is planning to enter the war is also keeping traders on their toes.

Across the Indian Ocean though, Australian markets are bracing for inflationary shocks from the Arabian Sea.

The AUDUSD pair remains heavily influenced by interest rate differentials and global risk sentiment, with domestic fundamentals playing a secondary but still supportive role.

AUDUSD Daily

In Australia, inflation remains above the Reserve Bank of Australia’s (RBA) target, particularly in core measures. This has reinforced expectations that the RBA will maintain a restrictive policy stance, even if additional rate hikes are limited. Economic growth has slowed but remains stable, supported by population growth and infrastructure investment. The labour market is gradually loosening, but unemployment is still relatively low, suggesting underlying resilience.

Despite this, external dynamics are dominating. The US Federal Reserve has kept interest rates elevated, signaling caution on inflation. This has supported US Treasury yields and the US dollar, limiting upside in AUDUSD. The interest rate differential remains a key constraint, especially as markets push back expectations for US rate cuts.

Geopolitical tensions have further pressured the AUD. As a pro-cyclical currency, it tends to weaken during periods of risk aversion. Recent instability has increased demand for safe-haven assets like the USD, pushing AUDUSD toward the lower end of its recent range.

Commodity trends are mixed. While Australia benefits from exports such as iron ore and LNG, rising oil prices have contributed to global inflation concerns, weighing on risk appetite. China’s stabilizing—but not accelerating—economy also limits upside for commodity demand.

Overall, AUDUSD is likely to remain range-bound with a slight downside bias in the near term. Sustained upside would require improved global sentiment, weaker US data, or stronger Chinese demand, while continued geopolitical risks could push the pair lower.

For the Aussie share market, The AUS200 is currently navigating a volatile and uneven macro environment, shaped by interest rate pressures, sector divergence, and global uncertainty.

A key headwind is the outlook for monetary policy. With inflation still elevated, the RBA is expected to keep rates higher for longer. This weighs on equity valuations by increasing discount rates and tightening financial conditions. Rate-sensitive sectors such as real estate and financials have been particularly affected, as higher borrowing costs reduce both consumer demand and corporate activity.

Global factors are also critical. Elevated US interest rates and tighter global liquidity conditions have contributed to market volatility. At the same time, geopolitical tensions have pushed oil prices higher, raising concerns about renewed inflation and slower global growth—both negative for equities.

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Sector performance across the AUS200 has been uneven. Energy stocks have outperformed due to higher oil prices, while materials and mining shares have faced pressure amid softer commodity sentiment. Technology stocks have struggled in the higher-rate environment, while defensive sectors like healthcare have shown relative resilience.

Domestically, the economy presents mixed signals. The labour market is gradually softening, and households are under pressure from higher mortgage costs and persistent inflation. This is beginning to weigh on consumption, which could affect corporate earnings in coming quarters.

In the near term, the AUS200 is likely to remain cautious with elevated volatility. Downside risks persist if inflation remains sticky or geopolitical tensions escalate. However, a moderation in inflation or clearer signals of future rate cuts could improve sentiment. Over the medium term, support from commodity demand and economic resilience may help stabilize the index.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

US stocks ended higher on Monday, rebounding as oil prices retreated after President Trump signalled a de-escalation of the war against Iran by ordering a five day pause on planned US strikes against the Islamic country’s energy infrastructure.

The move followed what Trump on his social media platform described as productive talks with Tehran over the past two days aimed at resolving the conflict, with discussions set to continue this week.

Israeli Prime Minister Benjamin Netanyahu told reporters that he had spoken with Trump and that the US President had said he believed the war achievements could be leveraged into a deal with Iran.

However, Iran’s Fars News Agency denied any negotiations, attributing Trump’s move to the country’s retaliatory threat to strike all West Asian power plants.

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Crude prices fell back after Trump’s announcement as it eased immediate supply fears following heightened tensions tied to a US deadline for Iran to reopen the Strait of Hormuz, a critical route for global oil shipments.

US WTI crude futures dropped 9.5% to $88.88 a barrel, while UK Brent crude futures slumped 10.7% to $100.23 a barrel.

On foreign exchanges, the US dollar also fell back, reversing course from gains earlier in the session as investors assessed Trump’s comments on talks with Iran regarding an end to the Middle East conflict.

The Dollar Index, which measures the greenback against six major currencies, shed 0.5% to 99.12.

Elsewhere, gold prices were weaker, despite the dollar’s decline, reflecting expectations that interest rates will remain higher for longer because of the impact on inflation from the oil price spike due to the war.

The spot gold price fell 1.9% to $4,406 an ounce. But, after recent sharp falls, the spot silver price rallied 2.0% higher to $69.02 an ounce.

On Wall Street at the close, the blue-chip Dow Jones Industrials Average was up 1.4% to 46,208, while the broader S&P 500 index gained 1.2% to 6,581, and the tech-laden Nasdaq Composite rose 1.4% to 21,946.

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Among the movers, Meta Platforms added 1.8% after news reports said its CEO Mark Zuckerberg is building an artificial intelligence (AI) agent to help him do his job as part of the social-media company's embrace of AI.

Elsewhere, Synopsys rose 2.8% after the Wall Street Journal reported that activist Elliott Investment Management has built a multibillion-dollar stake in the chip-design software maker.

And away from tech, Estee Lauder dropped 7.1% after the cosmetics firm announced that it is in talks to acquire Spanish beauty group Puig Brands.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

The trading week concluding 20 March 2026, has been defined by a sharp clash between escalating geopolitical risks in the Middle East and a surprisingly hawkish stance from major central banks. As the conflict involving Iran intensified, causing crude oil to spike amid concerns over the Strait of Hormuz, the higher for longer interest rate narrative returned with a vengeance.

All times mentioned in this report are in Beijing time.

S&P 500 (SPX) Analysis

The S&P 500 entered a technically pivotal phase this week, characterised by a clinical breakdown of the bullish momentum that defined much of early 2026. On 18 March 2026, the Federal Reserve opted to maintain interest rates at 3.50% to 3.75%, but the accompanying projections signalled only one potential cut for the remainder of the year. This hawkish hold, coupled with surging energy costs, triggered a liquidity test of the structural floor for the first time in over 200 sessions.

The index saw significant volatility, swinging from a weekly high of 6,794.5 down to a low of 6,506.1. By the afternoon of 20 March 2026, the index was struggling to maintain its footing, currently trading at 6,536.7. A sustained daily close below the 6,500 psychological level would represent a significant structural shift, potentially inviting a waterfall decline toward the October 2025 lows. While the AI supercycle continues to provide a long term cushion for earnings, the immediate fiscal dominance and energy led inflation risks have forced institutional desk rebalancing.

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The technical damage sustained this week is notable as the index snapped its long term bullish trendline. Historically, such breaches can lead to prolonged consolidation rather than an immediate V shaped recovery. With US 10 year yields exploding toward 4.80%, the equity risk premium has narrowed significantly. If the 6,506.1 liquidity floor fails to hold during the upcoming week, we may see a transition from a buy the dip environment to a broader sell the rally regime as markets price in a stagflationary outlook.

For newer traders: The S&P 500 often struggles when oil prices rise rapidly because higher energy costs act as a tax on both consumers and corporations, squeezing profit margins. Furthermore, rising inflation expectations force the Fed to keep interest rates high, which reduces the present value of future corporate earnings, making stocks less attractive compared to risk free government bonds.

GBP/USD Analysis

Sterling provided one of the most significant volatility events of the week following the Bank of England (BoE) meeting on 19 March 2026. Despite holding rates at 3.75%, the 9 to 0 unanimous vote surprised a market that had been pricing in a more dovish, divided committee. This signalled that the BoE has decoupled from its previous easing bias, prioritising the mitigation of the recent energy driven inflation shock over immediate growth concerns.

The pair underwent a sharp bullish reversal early in the week but faced intense pressure as the US Dollar rebounded on Friday. After reaching a weekly high of 1.34295, the pair retreated toward the 1.33422 level by the close of the Beijing session on 20 March 2026. This retreat was fuelled by a broader flight to safety into the USD as tensions in the Strait of Hormuz escalated, momentarily pushing the pair toward its weekly low of 1.33204.

GBPUSD H1

Technically, GBP/USD is trapped in a high stakes tug of war. The 1.34295 level has emerged as a formidable supply zone, where institutional sellers have repeatedly capped upside moves. Conversely, the 1.33204 area represents a structural floor where buyers historically step in. The decoupling of BoE policy from the Fed's potential cuts later this year provides a fundamental tailwind for the Pound, but this is currently being overshadowed by the geopolitical wildcard that favours the greenback in times of peak uncertainty.

For newer traders: Currency pairs like GBP/USD are heavily influenced by yield differentials. When the Bank of England appears more hawkish (likely to keep rates high) compared to the Federal Reserve, the Pound theoretically becomes more attractive. However, during global crises, the US Dollar often rises regardless of interest rates because it is considered the world's primary safe haven asset.

Forward-Looking Considerations

As we transition into late March, the primary narrative wildcard remains the potential for a Venezuela Shock. Amid Middle Eastern supply disruptions, any sudden pivot in US sanctions policy toward Caracas to offset global shortages could lead to a violent re-risking in commodities. If Venezuelan heavy crude floods the market, the current energy driven inflation narrative could flip overnight, potentially saving the S&P 500 from a deeper bear market entry.

The most profound long term shift is the structural erosion of the petrodollar system. For decades, the global requirement to buy oil in USD created a synthetic floor for the greenback. In early 2026, this anchor is loosening as major producers, including Saudi Arabia, move to settle a growing percentage of exports in non dollar currencies. This creates a mechanical decline in the dollar’s share of global reserves, which has already slipped toward the 55% threshold.

This petrodollar decoupling is being accelerated by the BRICS+ Bridge initiative. This blockchain based payment system aims to settle energy trades in local currencies, bypassing the SWIFT network and the dollar entirely. For GBP/USD, this transition suggests that while the dollar may remain a safe haven during immediate military crises, its long term gravity is weakening. Sterling could find unexpected support if the world moves toward a multipolar currency system where the USD no longer enjoys the exorbitant privilege of financing its deficits through forced global demand.

From a structural perspective, we are witnessing the emergence of Fiscal Dominance over monetary policy. The Fed’s inability to cool the economy through rates alone, due to massive government infrastructure spending, suggests a regime shift. We may be entering a period where traditional correlations break down. For instance, we might see the USD and Gold rally in tandem as investors flee paper wealth for hard assets, regardless of what the interest rate spreads suggest.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.