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In focus today

In Sweden, the Riksbank minutes will be published today. A lot has happened since the meeting last week, but it will be interesting to see how the Riksbank members themselves view the risks ahead and whether they express any individual assessments about when it might be time to act. It is also Göra Hjelm's first meeting. The NIER survey for March is also published. It is worth noting that it data was collected at the beginning of the month and does not capture recent events.

In Germany, the March Ifo survey is due and should offer further insight into preliminary growth and price effects from the war in Iran. Yesterday's PMI readings showed weaker-than-expected services, while manufacturing outperformed. In manufacturing, both new orders and output rose, a positive signal for the sector, but the decline in services and a sharp rise in manufacturing input prices remain concerning.

In the UK, February inflation will be published. The UK has been on a promising disinflationary trend, but February data is old news. It will take time before we get more clarity and the Bank of England can decide on its next move.

Economic and market news

What happened overnight

Overnight, the oil market was caught between escalating and de-escalating developments in the Middle East conflict. The market went with the latter, sending oil prices lower and Brent crude below USD100/bbl. We expect the market to stay nervous near-term and could easily see oil prices bounce higher again. The Trump administration proposed a 15-point peace plan to Iran via Pakistan, which offered to mediate talks. At the same time, the Pentagon sent 2,000 paratroopers to the area, adding to 4,500 Marines already en route and 50,000 troops stationed near Iran. Additionally, Iran informed the UN that "non-hostile" ships, excluding those linked to the US or Israel, may pass through the Strait of Hormuz.

In Japan, minutes from the Bank of Japan's January meeting revealed a hawkish stance, with many policymakers supporting further rate hikes to address inflationary pressures. Members also highlighted concerns over the weak yen's impact on prices. We expect the next rate hike from the BoJ in April, but much hinges on spring wage negotiations and of course energy prices.

What happened yesterday

In the euro area, the flash composite PMI fell more than expected in March to 50.5 (prior: 51.9), driven by a sharp drop in services to 50.1 (prior: 51.9). Manufacturing rose to 51.4 (prior: 50.8) but this was largely driven by longer delivery times amid supply distortions from the war in Iran. Manufacturing input prices surged to their highest level since September 2022, signalling a surge in cost, while output prices showed a muted increase. The print highlights the ECBs dilemma of balancing weaker growth and rising inflation, with communication so far focusing on inflation risks, reflecting a hawkish bias.

In the US, flash PMIs signalled steady demand and higher prices, mirroring trends in the euro area. Manufacturing came in surprisingly strong at 52.4 (prior: 51.6) driven by higher new orders (both domestic and exports), while services remained stable at 51.1 (prior: 51.7). Input and output subindices rose in both sectors, so far showing no clear signs of demand weakening from the energy shock.

In the UK, the flash composite PMI fell sharply to 51.0 in March (prior: 53.7), driven by slower growth in services at 51.2 (prior: 53.9) and manufacturing output at 50.1 (prior: 52.5). Supply chain disruptions from the Middle East conflict and surging energy prices pushed input costs higher and weakened demand, highlighting the Bank of England's challenge in balancing growth and inflation risks.

In Denmark, as indicated by polls, the general elections produced a complicated result with 12 parties in parliament and the biggest party (the Social Democrats) getting just 21.9% of the vote. The current centrist government lost its majority by a wide margin, and negotiations to form a new government are likely to be complicated and protracted. Fiscal policy as it stands will add around 0.5% of GDP to demand this year, and judging by the election campaign, negotiations might well result in modest further easing to mitigate the effect of higher energy prices. As with previous elections, this one should not trigger a market reaction. There continues to be fairly broad agreement around the fiscal framework, even if there is disagreement on how to prioritise within it.

In Hungary, the central bank held its rate at 6.25%, citing inflation risks from surging energy prices amid the Iranian conflict. The bank emphasised the importance of FX stability, maintaining tight monetary conditions to anchor inflation expectations and ensure financial stability.

Equities: Equity futures are higher this morning following reports that the US has sent a 15‑point plan to Iran aimed at ending the war. However, rumours of land troops hold investors from buying too much into this. Hence, futures are up only 0.5-1% this morning. What matters for equity markets is whether Hormuz will reopen in a potential ceasefire.

This followed a weaker session yesterday. AI disruption fears returned to the market as Anthropic announced that they are trialling a feature that lets users send prompts to Claude from their smartphone. Claude will then complete the task on its own on the user's computer. Tech, communication and real estate sold off. Cyclical appetite was solid, however, with materials and industrials faring relatively well.

FI and FX: Anxious, yet steady FX and FI markets yesterday. Energy prices remained elevated, with the price of Brent crude holding above the USD100/bbl before news that the US is working diplomacy to end the conflict which sent the price below USD100/bbl. NOK rebounded and rose together with the USD and EUR. EUR/USD traded around the 1.16 level. Upwards pressure on short-term interest rates, in particular on the EUR market, persisted amid more hawkish comments from ECB officials.

Daily Pivots: (S1) 0.6949; (P) 0.6987; (R1) 0.7034; More...

Intraday bias in AUD/USD stays neutral at this point, with focus on 0.6943 support. Decisive break there should confirm rejection by 0.7206 key fibonacci resistance. That would set up deeper correction to the whole up trend from 0.5913, and target 38.2% retracement of 0.5913 to 0.7187 at 0.6700. Nevertheless, strong rebound from current levels would retain near term bullishness for breakout through 0.7187 at a later stage.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will pave the way back to 0.8006. This will remain the favored case as long as 0.6706 resistance turned support holds, even in case of deep pullback.

Daily Pivots: (S1) 1.3724; (P) 1.3756; (R1) 1.3796; More...

Intraday bias in USD/CAD is back on the upside with break of 1.3751 resistance. Rebound from 1.3480 is seen as correcting the whole down trend from 1.4791. Further rise should be seen to 1.3927 resistance, and probably further to 38.2% retracement of 1.4791 to 1.3480 at 3981. For now, risk will stay on the upside as long as 1.3669 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.

Daily Pivots: (S1) 0.9122; (P) 0.9145; (R1) 0.9174; More....

EUR/CHF's rebound from 0.8979 resumed by breaking through 0.9139 resistance and intraday bias is back on the upside. Further rally should be seen to 61.8% retracement of 0.9394 to 0.8979 at 0.9235 next. On the downside, below 0.9090 minor support will turn intraday bias neutral again first.

In the bigger picture, down trend from 0.9928 (2024 high) is still in progress. Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Outlook will stay bearish as long as 0.9394 resistance holds, in case of rebound.

Daily Pivots: (S1) 212.40; (P) 212.70; (R1) 213.12; More...

Intraday bias in GBP/JPY remains mildly on the upside at this point. Firm break of 213.28 resistance will resume the rally from 207.20 and target a retest on 214.98 high. For now, risk will stay mildly on the upside as long as 210.77 support holds, in case of retreat.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Firm break of 214.98 will target 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. This will remain the favored case as long as 55 W EMA (now at 203.13) holds, even in case of another deep pullback.

Daily Pivots: (S1) 183.80; (P) 184.04; (R1) 184.45; More...

EUR/JPY's rebound is in progress and intraday bias stays on the upside. Firm break of 184.75 resistance will resume the whole rise from 180.78 and target a retest on 186.86 high. On the downside, below 183.17 minor support will turn intraday bias neutral first. Further break of 182.02 will bring deeper fall back to 180.78 support.

In the bigger picture, a medium term top could be in place at 186.86 and some more consolidations would be seen. Nevertheless, as long as 55 W EMA (now at 175.61) holds, the larger up trend from 114.42 (2020 low) remains intact. Firm break of 186.86 will pave the way to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88 next.

Daily Pivots: (S1) 0.8642; (P) 0.8652; (R1) 0.8665; More…

Range trading continues in EUR/GBP and intraday bias stays neutral. With 55 D EMA (now at 0.8682) intact, further decline is in favor. On the downside, firm break of 0.8611 will resume the whole fall from 0.8863 to 100% projection of 0.8863 to 0.8611 from 0.8788 at 0.8536. However, sustained break above 55 D EMA will turn bias back to the upside for 0.8788 resistance instead.

In the bigger picture, current development revived the case that whole rise from 0.8221 (2024 low) has completed at 0.8863, after rejection by 61.8% retracement of 0.9267 (2022 high) to 0.8221 at 0.8867. Sustained trading below 38.2% retracement of 0.8821 to 0.8863 at 0.8618 will confirm this case, and bring deeper fall to 61.8% retracement at 0.8466 at least. For now, medium term outlook is neutral at best as long as 0.8863 resistance holds.

Daily Pivots: (S1) 1.6528; (P) 1.6600; (R1) 1.6664; More...

Intraday bias in EUR/AUD stays mildly on the upside at this point. Rebound from 1.6125 short term bottom should extend to 55 D EMA (now at 1.6757). Sustained break there will pave the way to 38.2% retracement of 1.8554 to 1.6125 at 1.7053. Nevertheless, below 1.6448 minor support will suggest that the recovery has completed, and bring retest of 1.6125 low.

In the bigger picture, fall from 1.8554 medium term top is seen as reversing the whole up trend from 1.4281 (2022 low). Deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. Decisive break there will pave the way back to 1.4281. For now, risk will stay on the downside as long as 55 W EMA (now at 1.7245) holds, even in case of strong rebound.

Markets are turning cautiously positive as hopes build around a potential ceasefire that could reopen the Strait of Hormuz, easing the current supply-side shock. The tone has shifted from outright panic earlier in the week to a more measured phase of “probing for a bottom,” though conviction remains limited.

Oil remains the key anchor. Brent crude has eased back to around 100 level, suggesting that some war premium is being priced out. However, the move is tentative, reflecting that markets are not yet convinced a lasting resolution is imminent. Equities are responding more positively. Asian stock markets are rebounding as investors begin to price in the possibility of an “off-ramp” scenario, where tensions de-escalate and supply disruptions are reversed.

In contrast, currency markets are signaling greater skepticism. The performance profile still leans risk-off, with Aussie sitting at the bottom of the weekly ladder, followed by Kiwi and Loonie. On the other hand, Sterling is leading gains, with Euro and Yen also outperforming, while Dollar and Swiss Franc are holding in the middle.

This divergence highlights a key dynamic: while equities are pricing hope, FX markets remain focused on uncertainty and policy implications. The lack of alignment suggests that current optimism is still fragile and highly conditional.

At the center of the narrative is a reported 15-point ceasefire proposal from the US, delivered via Pakistani intermediaries. The plan outlines a one-month ceasefire designed to create a window for broader negotiations. For markets, the most critical element is the immediate reopening of the Strait of Hormuz. Such a move would quickly alleviate supply constraints, reduce energy prices, and ease global inflation pressures. In exchange, the US is reportedly offering full relief from economic sanctions, signaling a willingness to pursue a diplomatic off-ramp even as military pressure remains in place.

However, the response from Iran has been dismissive. Officials have described the proposal as “negotiating with themselves,” maintaining a defiant stance and reiterating demands for reparations and guarantees against future strikes. At the same time, the military backdrop remains tense. The Pentagon continues to deploy additional forces to the region, including elements of the 82nd Airborne, underscoring that escalation risks have not been removed.

This dual-track dynamic—diplomacy alongside military buildup—keeps markets in a state of cautious balance. Until there is concrete progress, such as a confirmed reopening of Hormuz, the current optimism is likely to remain constrained.

In Asia, at the time of writing, Nikkei is up 3.00%. Hong Kong HSI is up 0.81%. China Shanghai SSE is up 1.17%. Singapore Strait Times is up 0.76%. Japan 10-year JGB yield is down -0.014 at 2.257. Overnight, DOW fell -0.18%. S&P 500 fell -0.37%. NASDAQ fell -0.84%. 10-year yield rose 0.058 to 4.392.

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EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.6528; (P) 1.6600; (R1) 1.6664; More...

Intraday bias in EUR/AUD stays mildly on the upside at this point. Rebound from 1.6125 short term bottom should extend to 55 D EMA (now at 1.6757). Sustained break there will pave the way to 38.2% retracement of 1.8554 to 1.6125 at 1.7053. Nevertheless, below 1.6448 minor support will suggest that the recovery has completed, and bring retest of 1.6125 low.

In the bigger picture, fall from 1.8554 medium term top is seen as reversing the whole up trend from 1.4281 (2022 low). Deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. Decisive break there will pave the way back to 1.4281. For now, risk will stay on the downside as long as 55 W EMA (now at 1.7245) holds, even in case of strong rebound.

Gold’s rebound is gaining some traction today as broader financial markets stabilize, but the move is still seen as corrective rather than the start of a sustained bullish reversal. The recovery follows a sharp and stretched selloff earlier this week, with price action below 4,100 triggering what appears to have been a near-term exhaustion point.

The initial lift has been driven largely by positioning. Profit-taking on short positions has provided the base for the rebound, rather than fresh bullish demand. Some support has also come from cautious optimism around de-escalation in the Middle East after the US announced a five-day postponement of strikes on Iranian energy infrastructure.

Technical factors have also played a role. The 4,000 level has emerged as a strong support zone, combining psychological significance with a key technical cluster. Bargain hunting interest around this level helped stabilize the market and reinforced the near-term floor.

However, the upside is now approaching a critical resistance “traffic jam” between 4,600 and 4,800. This zone includes 38.2% retracement of 5,419.02 to 4,098.45 at 4,602.90, as well as 55 4H EMA near 4,725. Together, these levels create a dense resistance band that is likely to cap further gains.

Importantly, this is also where short-term traders who bought into the rebound are likely to take profits. If selling pressure emerges in this zone, it would confirm that the market remains in a “sell-the-rally” regime rather than shifting to a “buy-the-dip” environment.

As long as this resistance holds, the broader outlook remains cautious. Another leg lower cannot be ruled out, but the 4,000 level, with 38.2% retracement of 1,614.60 (2022 low) to 5,598.38 (Jan high) at 4,076.57, should continue to act as a strong floor barring a major escalation in geopolitical tensions.

Only a firm break above 4,800 would signal that a more meaningful bullish reversal is underway. Such a move would likely indicate that macro risks—particularly related to energy and geopolitics—are easing.