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Daily Pivots: (S1) 1.3638; (P) 1.3658; (R1) 1.3683; More...

Intraday bias in USD/CAD remains on the downside despite loss of momentum. Sustained trading below 61.8% retracement of 1.3480 to 1.3965 at 1.3665 will pave the way to retest 1.3480 low. On the upside, above 1.3708 minor resistance will turn intraday bias neutral again first.

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, decisive break of 38.2% retracement of 1.4791 to 1.3480 at 1.3981 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.

Daily Pivots: (S1) 0.9157; (P) 0.9174; (R1) 0.9186; More....

Intraday bias in EUR/CHF remains neutral and range trading continues below 0.9264. Further rise is in favor with 0.9155 support intact. Firm break of 0.9264 will resume the rise from 0.8979 to 0.9394 resistance next. However, break of 0.9155 will turn bias back to the downside for deeper pullback.

In the bigger picture, considering bullish convergence condition in W MACD, a medium term bottom should be in place at 0.8979. Sustained trading above 55 W EMA (now at 0.9280) will add more credence to this case. Further break of 0.9394 resistance will pave the way to 0.9660 resistance next. However rejection by the 55 W EMA will set up another fall through 0.8979 low at a later stage.

Daily Pivots: (S1) 214.80; (P) 215.12; (R1) 215.62; More...

Intraday bias in GBP/JPY stays neutral as consolidations continue below 215.98. Further rise is expected as long as 213.29 resistance turned support holds. Firm break of 215.89 will resume larger up trend to 61.8% projection of 199.04 to 214.98 from 209.58 at 219.43.

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 204.83) holds, even in case of another deep pullback.

Daily Pivots: (S1) 186.94; (P) 187.15; (R1) 187.40; More...

EUR/JPY is extending the consolidation pattern from 187.93 and intraday bias remains neutral. Another fall might be seen to 38.2% retracement of 182.56 to 187.93 at 185.87. On the upside, though, break of 187.93 will resume larger up trend.

In the bigger picture, up trend from 114.42 (2020 low) is in progress Next target is 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88 next. For now, medium term outlook will stay bullish as long as 180.78 support holds, even in case of deeper pullback.

Daily Pivots: (S1) 0.8684; (P) 0.8703; (R1) 0.8714; More…

Intraday bias in EUR/GBP remains neutral as consolidations continue below 0.8740. As long as 0.8675 support holds, further rise remains mildly in favor. On the upside, break of 0.8740 will resume the rally from 0.8610 to 0.8788 resistance. However, firm break of 0.8675 will turn bias back to the downside for retesting 0.8610 low instead.

In the bigger picture, strong support was seen again from 38.2% retracement of 0.8821 to 0.8863 at 0.8618. Break of 0.8788 resistance will argue that larger rise from 0.8221 might be ready to resume through 0.8863 (2025 high). Nevertheless, sustained trading below 0.8618 should confirm bearish reversal, and bring deeper fall to 61.8% retracement at 0.8466 at least.

Markets

Another round of TACO’s for everyone. US President Trump first extended the ceasefire deadline from April 21 to April 22 before announcing later it would continue indefinitely until Iran offers a new, unified proposal “and discussions are concluded, one way or the other”. Trump said he did so at the request of mediator Pakistan. The latest U-turn came on another day packed with mixed signals. A second round of US-Iran talks were scheduled for yesterday, but those fell apart before they even started. There was confusion whether or not Iran would send a delegation to Islamabad while vice-president Vance’s, who leads the US delegation, trip to Pakistan was first postponed, then paused and eventually cancelled. Meanwhile accusations of ceasefire violations were thrown in both directions. The US is also ramping up military presence in the region with a third aircraft carrier, the USS George HW Bush, three destroyers and about 10 000 troops expected to arrive towards the end of the month. With the (initial) deadline looming, it pushed oil prices up to more than $100. That’s going in reverse this morning again ($96.7). Stocks both in the US and Europe finished in the red but are preparing for a green(ish) opening, particularly on Wall Street. That said, the risk appetite is not as strong as it was on earlier Trump reversals, suggesting headline-trading fatigue, some lingering cautiousness or both. There’s indeed considerable uncertainty, not least because the US naval blockade continues to be in place. Iran’s foreign minister called it a violation of the ceasefire. The truce between Israel and Lebanon meanwhile is also increasingly fragile. Suffice it to say that there are too many moving variables to determine the outcome, especially on a daily basis. The US dollar is returning some of yesterday’s gains in technically insignificant trading. EUR/USD rises marginally to 1.175, DXY inches lower to 98.27. USD/JPY holds steady around Tuesday’s 159.3 close. Core bonds fell with the temporary oil price spike acting as an accelerant. US yields rose between 2.2 and 5.9 bps, flattening the curve. German rates added 0.1-6.4 bps in a similar shift. Gilt yields shot up almost 9 bps at the front. Inflation numbers in the country were more or less in line with expectations. A monthly 0.7% energy-related rise lifted the annual figure to 3.3% from 3%. Core inflation (3.1%) fell short of consensus (3.2%) but services CPI unexpectedly accelerated to 4.5% from 4.3%. Sterling barely moves (EUR/GBP 0.869), extending its long streak of uninspiring trading sessions. Apart from geopolitics, we’re looking at huge supply of ECB speeches, including from ECB president Lagarde tonight. Fed chair-to-be Warsh in its testimony before Congress yesterday had little concrete to offer (see also below). He steered clear of indicating short-term and/or aggressive rate reductions in a way president Trump would like him to. Warsh did say policy rates and the balance sheet should be working together. With him being against a bloated balance sheet one could see it as a hint for lower policy rates to compensate for the QT effect.

News & Views

The European Commission will today present and emergency energy package. Draft documents obtained by POLITICO show that the EU is primarily advising countries to use or tweaking existing laws. Proposed changes to subsidies rules will allow countries to cover up to 70% of the cost of wholesale power bills until December, and up to 50% of the extra fuel costs caused by the crisis for some sectors. The EC will also work with countries to develop targeted tax cuts to bring down energy bills. Other measures are more targeted at speeding up the EU’s climate agenda, increasing European coordination and reducing demand.

Fed chair nominee Warsh appeared in a testimony before the Senate Banking Committee yesterday. If confirmed, he said he would not be a “sock puppet” for US president Trump, vowing to be an independent actor in setting monetary policy. He said the central bank needed a new framework for dealing with persistent price pressures, without offering more specifics though it’s clear he wants a bigger role for (a leaner) Fed balance sheet. Warsh is not a big fan of forward guidance and suggested willingness to make changes to how the central bank communicates. Options include reducing the amount of post-meeting press conferences, limiting the number of speeches by Fed governors or modifying/abandoning quarterly economic forecasts and interest rate projections.

UK inflation rose in March, with CPI rising from 3.0% yoy to 3.3% yoy, in line with expectations. On a monthly basis, prices increased 0.7% mom, slightly above forecasts of 0.6% mom, reflecting renewed upward pressure largely driven by energy-related components.

The composition of inflation shows a mixed picture. Core CPI eased slightly from 3.2% yoy to 3.1% yoy, suggesting that underlying price pressures are not accelerating yet. However, goods inflation picked up from 1.6% to 2.1%, while services inflation rose from 4.3% to 4.5%, indicating that domestic price pressures remain firm.

Energy played a central role in the latest increase. Motor fuels made the largest upward contribution to CPI, while clothing provided a partial offset. This highlights the growing impact of higher fuel costs on headline inflation, even as some consumer categories soften.

Upstream price pressures are building more clearly. PPI input prices surged 4.4% mom and 5.4% yoy, with crude oil prices rising over 58% yoy. Metals and other raw materials also contributed, reinforcing the risk that cost pressures could feed further into consumer prices in coming months.

Full UK CPI and PPI releases.

The ceasefire in the Middle East has been extended, yes, despite Donald Trump’s early threats that it was ‘unlikely’ to be extended and that he would step up his aggressive stance in case of no deal. That is yet another proof that the US could be losing control in the region, and it’s important to look past the noise that’s injected in the markets by tweets or even official announcements, because they seem to carry an increasingly lighter weight.

US futures are higher this morning following a retreat in yesterday’s session, while European equity futures are pointing to a lower start and the Asian equity complex is trading with little conviction on worries that this conflict is prolonging dangerously, the situation around the Strait of Hormuz remains highly uncertain, the US has put itself in a very difficult position that it can no longer easily justify politically or geopolitically, and no one knows what’s next.

What we know is that energy reserves are tightening. It is said that Europeans may be left with only a few weeks (roughly 6 weeks) of oil and energy reserves, after which we might see disruptions hitting the shore – beyond just prices – we could see energy scarcity, mass flight cancellations and so on.

Despite elevated risks, energy prices are showing a relatively muted reaction to the ceasefire extension—one that Iran reportedly did not request. US crude, which jumped more than 5% and tested key technical resistance, is slightly lower this morning, with WTI trading just below $93 per barrel. The tightening supply narrative is increasingly being counterbalanced by demand destruction, limiting the upside during rallies. From a technical perspective, the $94 level—around the 38.2% Fibonacci retracement of the year-to-date move—could act as a key pivot between consolidation and a continuation of the rebound. Above that, the $100 level should serve as a strong psychological resistance. In short, oil price volatility is likely to persist, with prices remaining elevated versus pre-conflict levels, but with limited scope for a sustained upside as higher prices weigh on demand.

Recent developments support this view, with European refineries reportedly cutting demand in response to higher prices.

In contrast, US consumption appears more resilient. Latest data showed a strong rebound in US retail sales. While part of the increase reflects higher energy prices and is not inflation-adjusted, gains were broad-based across categories including furniture, electronics and general merchandise. This aligns with recent bank commentary suggesting that US consumer spending remains relatively robust—for now.

As a result, US 2-year yields moved higher yesterday, reaching around 3.80%, as the data reduced the urgency for near-term rate cuts amid expectations of rising inflation. Comments from Kevin Warsh, Fed chair candidate, also drew attention. He emphasized his independence from political influence saying he will not be a ‘puppet sock’ to the White House and suggested that rate cuts may be preferable to balance sheet expansion, while also expressing a willingness to work with the US Treasury to reduce the balance sheet. However, the timing of such efforts remains challenging given ongoing uncertainty in global demand for US Treasuries!

The US Dollar, which initially strengthened during the early stages of the Iran conflict, has since lost momentum and returned toward pre-conflict levels. The EURUSD rebounded ahead of a key technical resistance, keeping the pair in the Trump-inauguration-to-date positive trend, while the USDJPY hovers just below the 160 level, with intervention risks limiting further upside.

Elsewhere, data showed that producer inflation in South Korea reached a three-year high amid rising energy costs, while the Kospi edged lower from recent highs.

In equities, the technology sector continues to regain attention as a relatively defensive growth play, supported by resilient AI demand despite Middle East tensions and energy crisis. This narrative remains in focus ahead of earnings season. Korean memory chipmakers, in particular, are benefiting from strong pricing power due to supply shortages, which should help protect margins despite rising costs.

In the US, Tesla is set to report earnings after the bell. Consensus expectations point to roughly 13–17% revenue growth compared to a year earlier, thanks to an easier comparison base following a weaker period last year due to Elon Musk’s political mess. However, the key debate around Tesla is no longer about short-term delivery numbers or car sales altogether, but whether Tesla can continue to position itself as an AI-driven growth story rather than an automaker falling out of grace. Challenges remain significant: deliveries have already missed expectations, pricing pressure, fading EV subsidies and an aging lineup are weighing on margins, and heavy capex—expected to exceed $20bn this year—raises concerns about cash flow and execution. Competition from China is also intensifying, with BYD announcing rapid charging advancements that highlight the pace of innovation in the sector. Their cars will reportedly charge from 10 to 98% in 6 minutes, and charging to 35% will take up to 1 minute only!

Against this backdrop, the bar has shifted. Markets are likely to focus less on quarterly figures and more on Elon Musk’s narrative around robotaxis, AI and future growth engines to justify valuation levels. Its PE ratio stands at 320 today.

In focus today

In Sweden, March labour market statistics is set to be published. Our forecast is that the unemployment rate will remain unchanged from February at 8.4%, seasonally adjusted, although LSF data is very volatile. The labour market has shown a positive trend recently, reflecting stronger economic activity last year.

In the UK, CPI inflation for March is released. The UK has been on a continuous disinflationary path since last fall. Now we can expect an inflation surge, which will weigh on consumers. The Bank of England (BoE) will look closely for second-round effects, but with the cooling labour market in mind, the recession risk is probably more imminent than the inflation risk. We expect the BoE on hold for the foreseeable future.

In Denmark, the April consumer confidence indicator will be released. In March, consumer confidence dropped to -13.8, influenced by the ongoing US-Iran conflict and its impact on energy prices. With significant uncertainty and no resolution in sight at the time of the survey, we expect the indicator to decline further in April. As the survey directly addresses price expectations, consumer insights will be particularly important.

In Japan, April PMIs are released overnight. Consumers have largely been shielded from higher oil prices through gasoline subsidies, which should keep the service sector strong. In manufacturing, the new orders index corrected lower to 51.3 in March but remains above 50. At large, we think all the pieces of the puzzle are in place for the BoJ to hike again. However, the probability of an April rate hike has been priced out recently, and we have not seen much push-back from Governor Ueda. We expect the next hike in June or alternatively July, much dependent on the state of the energy market by then.

Economic and market news

What happened yesterday

In the Middle East conflict, Trump extended the ceasefire indefinitely just before its expiry after Iran refused further negotiations due to unreasonable US demands. This marks a U-turn in tone, as Trump had earlier ruled out an extension and hinted at military action. With Iran reportedly not requesting the ceasefire and the Strait of Hormuz issue still unresolved, Iran appears to hold the upper hand at present. Following the news, Brent crude held above USD98/bbl.

In Germany, the ZEW index in April fell more than expected. The assessment of the current situation declined to the same level as in January, which was slightly more than expected, while expectations took an unexpectedly large plunge to the lowest level since 2022. The data paints a bleak picture of the German growth outlook, which is a dovish signal for the ECB, although their communication clearly shows that the Governing Council is more concerned with curbing upside inflation risks compared to downside growth pressures.

In the UK, the latest labour market report provided mixed signals. The report includes March data on payrolls but February data on the rest, making it largely outdated. March payrolls revealed a loss of 11K jobs and thus payrolls are once again pointing down. February was also revised lower. On the other hand, unemployment nosedived to 4.9% (prior: 5.2%, cons: 5.2%). Additionally, the trend for lower wage growth was not as strong as expected. Cost effects on wages will thus be worth keeping an eye on going forward.

In the US, March retail sales surprised to the topside, with the core control group measure (excluding autos, gas, building materials, and food services) rising 0.7% (prior: 0.6%, cons: 0.2%). While higher gasoline prices naturally lifted nominal headline sales, the stronger-than-expected growth in the core measure suggests consumer demand remained resilient during the initial weeks of the war, despite sentiment indicators trending lower.

ADP's weekly private sector employment estimates also turned surprisingly sharply higher, as the 4-week average reached 55k in the week ending 4 April, which is the highest reading since ADP started publishing the weekly estimates last fall. While - all else equal - this could indicate a strong April Jobs Report, it is worth noting that the correlation to Non-Farm Payrolls is far from perfect.

Also in the US, Fed chief nominee Warsh testified before the Senate Banking Committee, calling for "regime change" at the Fed, including a new inflation framework, gradual balance sheet reduction, and an overhaul of forward guidance - largely in line with previous remarks. Warsh criticised the Fed's handling of inflation post-Covid-19 and emphasised the importance of monetary policy independence despite political pressure. Senator Tillis stated Warsh's confirmation would be delayed until the Department of Justice investigation into Powell concludes, adding uncertainty to the timing.

Equities: Risk assets had a poor day yesterday, with near-term dynamics in the hands of the Iran war. Oil jumped and briefly touched above USD100/barrel to settle around USD98barrel. The market dynamics gave flashback to the playbook we saw earlier in this war, being the Energy sector the only performing one with the rest of the sectors in negative territory. Global equities ended 0.7% lower, with S&P500 and Nasdaq around 0.6% lower. Russell 2000 ended 1% lower. Overnight Asian equities are mixed, while futures are up in the US, and lower in Europe.

FI and FX: Global yields rose across tenors yesterday as markets were eyeing the initial deadline for the ceasefire Wednesday evening in Washington until Trump extended the ceasefire indefinitely just before its expiry after Iran refused further negotiations, citing unreasonable US demands. Following the news, Brent crude held above USD98/bbl. EUR/USD edged lower yesterday amid solid US macro data, Kevin Warsh's remarks at the Senate and a setback in ceasefire talks. EUR/DKK traded slightly below the recent 7.4735 top yesterday as the upwards pressure eased slightly. EUR/GBP ended the day below 0.87 as the UK jobs report and political jitters failed to trigger a meaningful move. Gilts underperformed peers as political jitters came back in focus with prediction markets having ramped up bets that PM Starmer will be out before 2027 to around 70%.

Daily Pivots: (S1) 1.6383; (P) 1.6422; (R1) 1.6459; More...

Intraday bias in EUR/AUD stays on the downside as fall from 1.6842 is extending. Deeper decline should be seen to retest 1.6125 low. Firm break there will resume whole down trend from 1.8554 to 1.5913 fibonacci level next. On the upside, above 1.6477 minor resistance will turn intraday bias neutral first.

In the bigger picture, fall from 1.8554 (2025 high) is in progress and 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 (2022 low). For now, risk will stay on the downside as long as 55 W EMA (now at 1.7131) holds, even in case of strong rebound.