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The Australian dollar finally breached the key 0.6890/6900 support area late last week, and while downside momentum hasn't accelerated meaningfully through this level, it is trading heavy. Four weeks of conflict are forcing a harder reckoning for global markets. US-Iran de-escalation looks increasingly distant, and markets are increasingly pricing in duration, not resolution. The Easter shortened week ahead calendars include the minutes from the RBA’s March meeting and US March payrolls. These releases likely have no more than a fleeting impact while war headlines dominate. The March final global PMIs and the March US ISM surveys are out too, and we should see some more glimpses of the energy supply disruption in these surveys.

The Australian dollar reckons with global energy disruption risks

The Australian dollar finally breached the key 0.6890/6900 support area late last week, and while downside momentum hasn't accelerated meaningfully through this level, it is trading heavy. Four weeks of conflict are forcing a harder reckoning for global markets. US-Iran de-escalation looks increasingly distant, and markets are increasingly pricing in duration, not resolution. The Easter shortened week ahead calendars include the minutes from the RBA’s March meeting and US March payrolls. These releases likely have no more than a fleeting impact while war headlines dominate. The March final global PMIs and the March US ISM surveys are out too, and we should see some more glimpses of the energy supply disruption in these surveys.

The Australian dollar finally breached the key 0.6890–0.6900 support area late last week. While downside momentum has not yet accelerated meaningfully through this level, the currency is trading heavy, broadly in line with risk assets.

The Australian dollar initially absorbed the opening weeks of the US–Iran conflict in stride. An energy‑led terms‑of‑trade boost and a hawkish RBA backdrop even saw AUD/USD print a new 3½+ year high of 0.7187 on 11 March.

But four weeks into the conflict, global markets are being forced into a harder reckoning. De‑escalation now looks increasingly distant, and markets are shifting from pricing a short‑lived shock and eventual resolution, to pricing duration and extended disruption.

For the Australian dollar, the “front‑loaded” benefits from higher energy prices are beginning to fade, while the “back‑loaded” global growth risks are starting to dominate. That shift was evident in trading last week, with AUD/USD sliding from around 0.7000 at the start of the week to near 0.6850 early this week.

The weekend news flow was hardly reassuring. The Washington post is reporting that the US is preparing for weeks long ground operations in Iran, while Iran-backed Houthi forces have entered the conflict. While the US continues to amass forces in the region, it is clear that the Administration is also looking for off-ramps. President Trump extended the negotiating window twice last week. An initial 48-hour ultimatum was extended to five days Monday last week and again to eight days on Friday.

But each extension landed increasingly flat with markets. The Australian dollar bounced from lows just above 0.6900 Monday last week to around 0.7050 on the five-day extension, but only managed to rise from around 0.6875 to 0.6920 on Friday’s eight-day extension. Through it all, Iran's posture has been consistent: dismissive, on its own terms and with no sign of convergence. Markets are clearly getting it - pricing duration, not resolution. A ground offensive would trigger a further risk-asset drawdown and tighter financial conditions.

While all this frames Australian dollar risks as a global growth story, there’s also Australia’s domestic fuels vulnerability to reckon with. Australia is broadly a net energy exporter, reflecting our deep endowments of coal and LNG, but we are heavy net importers of refined fuels. In 2025, more than 80% of Australia’s refined fuel consumption was imported, primarily from Asia, and the bulk of the upstream raw crude sources back to the Mideast. There are additional questions about Australia's domestic buffers - 38 days of petrol, 32 days of diesel & 29 days of jet fuel. According to the Institute of Energy Economics and Financial Analysis Australia has the smallest stockpiles of all International Energy Agency (IEA) members.

To be sure, the Australian dollar still has a 2.7% year to date gain versus the US dollar to its name - bested in the G10 only by the Norwegian Krone. But it is beginning to cede ground on a range of crosses.

AUD/EUR hit a 16-month high of 0.6199 on 11 March, but momentum has since clearly turned. The AUD/EUR cross pair has now fallen for 9 consecutive trading sessions, and opens the week at 0.5965. AUD/JPY tells a similar story - from 36 year highs (!), just shy of 114.00 on 11 March, this pair has fallen back below 110.00. AUD/NZD gave back the 1.20-handle last week too, and trades at 1.1954 to start the week.

It's all geopolitical & energy supply disruption risk for all markets right now

Brent crude has lurched and failed to clear $120/bbl twice since the US-Iran war started and starts the week on its third attempt. Energy supply disruption risks are of course keeping prices elevated with Brent Crude rising 3.3% on today's open, following the Houthis joining the war. Further, as of Monday morning, WTI and Brent prices are up 53% and 59% MTD respectively.

Precious metals however, have not fared as well. Inflationary concerns around the energy supply shock have driven global rate expectations higher in recent weeks, in turn weighing on gold and silver prices with gold reaching a low of $4099/oz last Monday - a long way away from YTD highs of $5595/oz. Further, given gold's impressive run higher in January, it seems investors have been realising gold gains to offset losses across other assets.

What was a choppy grind lower for equities in the early part of March, is giving way to more consistent downside momentum. The S&P500 is down almost 8% since the onset of the war, meanwhile the KOSPI index is down 12.9% MTD in line with broad market risk aversion.

Global bond yields have pushed higher across the board too. US 10-year bond yields have climbed +40bp over March up to 4.43% - with tariff induced good's inflation already keeping inflation above the Fed's target prior to the US-Iran war, this conflict has only exacerbated inflationary expectations with market's no longer pricing in any Fed cuts for 2026.

More early glimpses of the US-Iran war in this week's data?

Many markets will be closed this Friday and next Monday for the upcoming Easter long weekend. The global calendars are by headlined by March US nonfarm payrolls, February JOLTS data and retail sales. Final March global PMIs are also due, along with the RBA's March MPC meeting minutes.

Resilient US labour market data will likely be downplayed, given the aggressive pullback in Fed rate cut expectations of late, while a weaker jobs print likely has a more meaningful impact.

Final March global PMIs will contain more respondants since the US-Iran war began so we should expect to see more glimpses of the war's impact on pricing intentions and activity outlooks.

Local rates markets will focus on the RBA's March Meeting Minutes. Any additional colour on the 5-4 split decision will be instructive. With nearly 3 hikes already priced-in by December 2026 it would take a lot to shift pricing even further in a hawkish direction, especially after Chris Kent’s speech last week was itself seen as relatively hawkish and potentially superceding the Minutes.

All that being said, any and all data this week will likely play second fiddle to geopolitics and war headlines.

Monday

• Fedspeak; Chair Powell & Williams

Tuesday

• Japan Mar Tokyo CPI
• RBA March MPB meeting minutes
• Australia Feb Private Sector Credit
• China Official Mar Manf. & Non-manf. PMI
• Eurozone Mar CPI (Prelim.)
• US Mar Conf. Board Consumer Confidence, Feb JOLTS Job Openings
• Fedspeak; Goolsbee, Barr & Bowman

Wednesday

• Australia Feb Building Approvals
• China Rating dog PMI
• Australia, Japan, Eurozone, UK, US Mar S&P Global Manf. PMI (Final)
• US Mar ISM Manf. PMI, ADP Employment, Feb Retail Sales
• Fedspeak; Musalem & Barr

Thursday

• Australia Feb Trade Bal.
• Fedspeak; Logan

Friday

• Good Friday Public Holiday
• China Mar Manf. & Non-manf. Ratingdog PMIs
• US Mar Unemployment, Non-farm Payrolls, S&P Global Services PMI (Final)

• Gold pares gains below uptrend line on softer Dollar.
• Dip‑buyers emerge, but upside remains limited.
• Momentum signals maintain a neutral‑to‑bearish stance.

Gold is holding steady near 4,500 on Monday, attempting to build on last session’s 2.5% rebound as a softer dollar offsets fading rate‑cut expectations. Still, the precious metal struggles to attract strong dip‑buying interest amid a bearish technical backdrop after falling more than 15% this month.

Price action remains range‑bound in a bearish consolidation phase below the medium‑term ascending trendline and the 100‑day SMA. Momentum indicators reinforce this hesitation – the MACD remains in negative territory, showing persistent downward pressure, while the RSI is flatlining just above oversold levels, suggesting bearish momentum is easing but not reversing. Last week’s rebound from the 200‑day SMA near 4,000 therefore remains on fragile footing.

Initial resistance sits at 4,600, the 38.2% Fibonacci retracement of the March 2-23 pullback, aligning with the 100‑day SMA. A break above could open the way to the 50% Fibonacci level at 4,758, followed by the 20‑day SMA, currently in a bearish crossover with the 50-day SMA, near 4,850.

Support emerges near 4,375, where recent lows have held, followed by deeper support around 4,300 if sellers regain control. Below that, the 200‑day SMA in the 4,000-4,150 zone remains critical.

Summing up, Gold has snapped a three‑week losing streak, but the modest recovery from multi‑month lows remains volatile. A sustained move back above the uptrend line is needed to shift the precious metal onto more stable ground.

Daily Pivots: (S1) 0.9168; (P) 0.9186; (R1) 0.9214; More....

Intraday bias in EUR/CHF stays on the upside at this point. Rise from 0.8979 short term bottom is in progress to 61.8% retracement of 0.9394 to 0.8979 at 0.9235. Sustained break there will pave the way to 0.9394 key resistance next. On the downside, below 0.9142 minor support will turn intraday bias neutral again first.

In the bigger picture, as long as 55 W EMA (now at 0.9286) holds, the larger down trend from 0.9928 (2024 high) is still expected to continue through 0.8979 at a later stage. However, sustained break of 55 W EMA should confirm medium term bottoming, and bring stronger rise through 0.9394 resistance, even as a corrective move.

Daily Pivots: (S1) 1.1491; (P) 1.1520; (R1) 1.1537; More….

Range trading continues in EUR/USD and intraday bias remains neutral. Further decline is expected with 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) intact. On the downside, firm break of 1.1408 will resume the fall from 1.2081 to 38.2% retracement of 1.0176 to 1.2081 at 1.1353. However, decisive break of 1.1666 will argue that the fall from 1.2081 has completed, and turn bias back to the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824.

In the bigger picture, prior break of 55 W EMA (now at 1.1497) should confirm rejection by 1.2 key cluster resistance level. The whole up trend from 0.9534 (2022 low) might have completed as a three wave corrective rise too. Deeper fall is expected to long term channel support (now at 1.0535). Meanwhile, risk will stay on the downside as long as 1.2081 holds, even in case of strong rebound.

Daily Pivots: (S1) 159.70; (P) 160.05; (R1) 160.65; More...

Intraday bias in USD/JPY is turned neutral with current retreat. Some consolidations would be seen but further rally is still in favor. Above 160.45 will bring retest of 161.94 high. Nevertheless, considering bearish divergence condition in 4H MACD, sustained break of 55 4H EMA will indicate short term topping, and turn bias to the downside for 157.94 support instead.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.97) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 1.3229; (P) 1.3289; (R1) 1.3318; More...

GBP/USD recovers mildly ahead of 1.3216 support as range trading continues. Intraday bias stays neutral first. Further decline is expected with 1.3482 resistance intact. On the downside break of 1.3216 will resume the fall from 1.3867 to 1.3008 structural support. However, decisive break of 1.3482 will argue that the fall from 1.3867 has completed, and turn bias back to the upside for 61.8% retracement of 1.3867 to 1.3216 at 1.3618.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place at 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least correcting the rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or until further development.

Daily Pivots: (S1) 0.7955; (P) 0.7974; (R1) 0.8009; More….

Intraday bias in USD/CHF remains on the upside at this point. Current rise from 0.7603 should target 38.2% retracement of 0.9200 to 0.7603 at 0.8213. For now, further rally is expected as long as 0.7833 support holds, in case of retreat.

In the bigger picture, a medium term bottom should be in place at 0.7603 on bullish convergence condition in D MACD. Rebound from there is seen as correcting the fall from 0.9200 only. However, decisive break of 55 W EMA (now at 0.8088) will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high). On the other hand, rejection by the 55 W EMA will setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage.

Daily Pivots: (S1) 1.3860; (P) 1.3880; (R1) 1.3915; More...

Intraday bias in USD/CAD remains on the upside for the moment. Current rally from 1.3480 is in progress for 38.2% retracement of 1.4791 to 1.3480 at 1.3981. Decisive break there will argue that it's already reversing the whole down trend from 1.4791, and target 61.8% retracement at 1.4290. On the downside, below 1.3844 minor support will turn intraday bias neutral first. But risk will stay on the upside as long as 1.3751 resistance turned support holds, in case of retreat.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen, as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. However, break of 1.3927 resistance will argue that the correction has completed with three waves down to 1.3480 already. Further break of 1.4139 will confirm and bring retest of 1.4791 high.

Markets

The TACO-trade met it’s maker. “Iran Never Chickens Out” pushed the US tech-heavy Nasdaq index into correction territory last week, trading around 12.50% off the all-time high reached in January (20948 close vs 24020). From a technical point of view, we rapidly approach 38% retracement on the rally that followed the early Liberation Day mess (20492), the 2024 high (resistance-turned-support) at 20205 and the target of the double top formation that formed during Q4 2025 and Q1 2026 (19776). The S&P 500 is currently 9% below its record (6356 close vs 7002) with more or less similar technical references at 6174 (38% retracement), 6147 (2025 high) and 6102 (target double top). The Eurostoxx 50 trades already 13.3% below the all-time high (5506 close vs 6200) and narrowly closed above 5500 support last week. The next line of defense stands at 5370 which is 50% retracement on the post Liberation Day rally. From a momentum point of view, the pace of the equity sell-off especially started accelerating in the US last week. Weekly differences on bond markets were more limited last week, thanks to a strong rebound of US Treasuries during Friday’s US session. Volatility remains extremely high though. After the initial hawkish front end repositioning, more and more harm is being done at the longer end of the curve as inflation risk premia start drifting away. The dollar stands its ground in FX space. The trade-weighted dollar closed last week above the 100-mark (100.36 March high), EUR/USD ended just above 1.15 (1.1411 March low) and USD/JPY broke the 160-mark for the first time since July 2024, prompting direct verbal intervention treats by Japanese officials.

The first marker on our market-dashboard continues to signal escalation risks and keeps above-mentioned momentum trades going. Brent crude moves above $115/b, approaching the highest level since the start of the war ($119.5). Rumours of a US ground invasion, either seizing the strategic Khargh (oil) island or even trying to extract Iran’s uranium go in the mix with Houthi’s joining Iranian war efforts (first attacks on Israel) and Iranian strikes on aluminum plants in Abu Dhabi and Bahrain. The latter pushed futures on the London Metal Exchange up by the most since 2024 (+4-6%) as they disrupt stretched supply chains even more. Today’s eco calendar contains EC economic confidence indicators and German March inflation numbers. Spanish figures at the end of last week reflected the energy supply shock though rose slightly less than consensus (+1% M/M and 3.3% Y/Y from 2.3% Y/Y; core stable at 2.7% Y/Y). US Fed Chair Powell participates in a moderated discussion at Harvard University, but don’t expect him to elaborate as much as for example the ECB on the Fed’s reaction function. Steady remains the key principle for the Federal Reserve.

News & Views

The European Commission proposed some general principles in trying to coordinate EU countries’ response to the energy price surge. Such coordination is deemed essential to prevent market fragmentation and leverage economies of scale. The EC has also learned from 2022 in that many of the measures back then were broad and untargeted, leading to inefficiencies and a huge fiscal price tag. The EC’s preferred option is to support only the most vulnerable households because that would not distort the price signal too much. EU countries could also lower electricity taxes but the Commission warns for the hole it could punch in budget revenues at a time when deficits and debt are already high. The EC is also suggesting a form of two-tier pricing for electricity and/or natural gas as a way to blunt the impact for vulnerable households and firms. Whatever measure taken, the EC said it should have a clear end-date.

Rating agency Fitch affirmed Israel’s rating steady at A with a negative outlook. The rating itself balances a “diversified, resilient and high value-added economy and strong external finances against a high public debt/GDP ratio, still high security risks, and a record of unstable governments that has hindered policymaking”. The negative outlook is a reflection of a projected continued rise in public debt on deficits nearing 6% of GDP this year, which is already well above the A median, as well as war-related tail risks that may weaken Israel’s growth prospects and its fiscal trajectory. The latter could remain unaddressed due to the fractious domestic political environment. Fitch forecasts debt to rise from 71.4% this year to 72.5% in 2027 with further increases in subsequent years. Growth is projected to pick up from 2.9% last year to 3.5% in 2027 with inflation remaining close to the mid-point of the 1-3% central bank target through 2027.

Middle East tensions escalated over the weekend as around 3’500 US troops came to the region – increasing the chances of a ground operation that will likely last weeks – and Iran-backed Houthis joined the war. That’s a big deal as their inclusion brings new uncertainty regarding trade through the Red Sea, at a time when disruption in the Strait of Hormuz is taking a toll on global energy and other essential goods flows – including fertilizers. Saudi, remember, had redirected its oil exports to the Yanbu port on the Red Sea and was able to export around 5mbpd of oil – a bit less than the roughly 7mbpd export capacity through the Strait of Hormuz. So now, shipping through the Red Sea is also becoming risky.

Escalation and expansion of the Middle East conflict sent crude oil and aluminium up at the open. Aluminium prices jumped more than 5% in Asia after Iran struck aluminium producers in Bahrain and the UAE over the weekend. US crude approached the $105pb level before retreating slightly to just below $103pb at the time of writing, while Brent crude flirted with the $110pb mark. There are bets that crude could rise to $150 and even to the $200pb level if the war doesn’t end quickly. I believe that demand would be heavily hit if prices go that high. Above $120–130pb, global recession odds would take the upper hand and tame upside pressure.

What’s certain, however, is that the persistent rise in oil prices continues to fuel global inflation and stagflation bets, as tighter monetary policies from global central banks could slow down demand, but not fully reverse an external inflation shock – leaving many economies with high inflation and rising unemployment. That’s the definition of stagflation.

The latter will – at some point – ease the latest hawkish shift in central bank expectations: a sharp economic slowdown could convince central banks to act less aggressively.

The Japanese 10-year yield opened the week at a fresh multi-year high, near 2.38%, but slightly eased, while the US 2-year yield is softer this morning. This slight rebound in sovereign bonds could explain why S&P 500 futures have slightly turned positive this morning, but there is no doubt that the unideal geopolitical and macroeconomic backdrop will continue to weigh on risk appetite.

The S&P 500 fell more than 2% last week – it was the fifth consecutive week of losses – while the Nasdaq 100 sank more than 3%. Losses since the January peak have now surpassed 10%, meaning that the index has entered correction territory, with risks only building for a deeper pullback. The VIX index ended last week above the 30 level, while volatility across sovereign bonds has also reached eye-watering levels. High volatility in both stocks and bonds has led to one of the largest monthly declines in 60/40 portfolios since 2022. Last week’s weak Treasury auctions only came as confirmation that investors remain worried.

Inside tech, CrowdStrike has become the latest victim of AI anxiety. The stock price fell nearly 6% on Friday after Anthropic’s Mythos AI model advanced cyber capabilities, decreasing the need for certain security services. Meta also tanked 4%. The selloff followed ongoing legal problems regarding the addictive nature of the platforms harming young users, but the latter is likely a trigger and not the main cause. Investors have been growing uncomfortable with massive AI spending (increasingly financed by debt), and indeed we have seen a similar drop across other Magnificent 7 stocks, for companies that are not involved in legal issues like Amazon.

So this week, investors will continue to watch Middle East developments, oil and energy prices, and their impact on inflation and central bank expectations.

The US dollar has pushed above the 100 level, helped by safe-haven demand and higher oil prices. But gains have been limited as the USDJPY bounced lower after shortly trading above the critical 160 level – a level that makes Japanese authorities uncomfortable and highly likely to act. And indeed, the country’s FX chief said that they could take bold action in the FX markets if the yen depreciation continues. This confirms that there is no juice left to be squeezed out of the USDJPY as speculative positions don’t have enough margin to tolerate a currency intervention. Of course, the yen will remain under pressure against the dollar, but any intervention – or threat of intervention – will keep speculative shorts in check.

Elsewhere, the Indian rupee also posted a strong gain on central bank intervention.

FX interventions to curb the dollar’s strength, at a time when oil prices have taken a lift, could slow the dollar’s appreciation, but what could eventually reverse it is: 1) de-escalation in the Middle East and 2) the hawkish divergence between the Fed and the other major central banks.

Remember, the Federal Reserve (Fed) has a dual mandate: it must ensure price stability but also a healthy jobs market. So any further softening in the jobs market could help ease hawkish Fed expectations.

This week, the US will reveal its latest jobs data. And even though Western markets will be closed for Good Friday, the data will still come out on Friday and is expected to show around 56K new nonfarm payroll additions in the US economy. A soft – or softer-than-expected – figure, or revisions, could help lift some of the hawkish pressure off the market’s shoulders and help ease yields. But the data will obviously remain secondary to Middle East headlines.