FX market still has not grasped full impact of energy shock - Goldman SachsEURUSD keeps the bearish bias intact amid the US-Iran war; Focus stays on negotiationsEuropean stocks keep the calm today but set to cap one of the worst months in recent yearsEurozone headline inflation picks up in March as energy prices surge on Middle East warECB's Muller: Current baseline projection could be already too optimisticThe Nasdaq bounces as Trump is reportedly open to end the war without Hormuz conditionGermany March unemployment change 0k vs 2k expectedThree Chinese ships confirmed to have passed through Strait of HormuzGold consolidates awaiting potential US-Iran deal; Trump's next move crucialFrance March preliminary CPI +1.7% vs +1.6% y/y expectedWhat are the main events for today?German import prices move up slightly in February, just before the US-Iran war impactUK March Nationwide house prices +0.9% vs -0.1% m/m expectedGermany February retail sales -0.6% vs +0.2% m/m expectedUK Q4 final GDP +0.1% vs +0.1% q/q prelimFX option expiries for 31 March 10am New York cutRisk sentiment on the up but is it another false dawn?The highlight of the session was the Eurozone inflation data for March. The data missed estimates but still showed an annual increase to 2.5% vs 1.9% prior due to elevated energy prices. Core inflation hasn't been impacted yet as the annual rate fell to 2.3% vs 2.4% prior. This clearly shows that inflation conditions were pretty much perfect before the war started.The main story today though has been the WSJ report released in the APAC session saying that Trump would be open to end the war with Iran without the Strait of Hormuz opening condition. This has led to some cautious optimism in the markets as stocks rebounded, oil prices eased and the US dollar pulled back. Trump basically confirmed the report just a few moments ago as he said in a Truth Social post that countries affected by the Strait of Hormuz closure should get the oil themselves as the US won't be there to help anymore.It feels like a deal is really coming at this point and we could see the war ending before the April 6 deadline, so keep a close eye on the headlines and especially on Trump's Truth Social account. This article was written by Giuseppe Dellamotta at investinglive.com.

Trump on Truth Social:All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the U.S., we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT. You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us. Iran has been, essentially, decimated. The hard part is done. Go get your own oil! President DJTTrump is basically confirming the WSJ report released in the APAC session saying that he would be open to end the war with Iran without the Strait of Hormuz opening condition.He's clearly upset as Iran's resistance turned out to be stronger than expected and the damage being done to the US economy continues to increase. It looks like he really wants to move forward but Iran is dictating conditions now. He will have to swallow his pride this time around as the longer this war drags on, the worse the impact on the economy and markets will be.I feel like we are getting close to a deal... This article was written by Giuseppe Dellamotta at investinglive.com.

Goldman Sachs is noting that even if the US-Iran conflict were to end soon, there will be lasting impact from the surge in energy prices on markets. And that is something that perhaps currency traders have not quite fully grasped just yet.For some context, the firm is arguing that the latest jump in energy prices will not be a temporary "blip". Instead, it is looking more and more akin to a "genuine physical disruption". And the risk of that becoming more embedded in markets will grow as the conflict drags on for longer.The firm has already raised its TTF gas price forecast for April to €55 per MWh, as Qatar's LNG production remains threatened. That is up from their previous forecast of €36 per MWh. And if the Strait of Hormuz disruption persists, they foresee Brent crude oil keeping at the $100 to $110 range before stabilising.Taking all that into consideration, Goldman Sachs warns that the FX market may be a tad complacent - especially risk trades."The dollar marked a fresh 2026 high last week as investors took stock of the burgeoning energy shock. While markets remain highly responsive to headlines, we are increasingly cognizant that the impact of higher energy prices over the last month (and for some time to come) will leave a more lasting imprint on FX markets even if the conflict comes to an end relatively soon.In short, the playbook for risk-on trades has shifted over the last month, which we do not think is fully reflected in market pricing or investor sentiment."That is a fairly big warning, especially if any end to the US-Iran conflict still does not result in passage through the Strait of Hormuz returning to normal. And at this point, it is hard to imagine Iran wanting to give up such control and leverage. This article was written by Justin Low at investinglive.com.

Prior +0.9%HICP +1.9% vs +1.9% y/y expectedPrior +1.1%The headline estimate is the highest since August 2024 as French inflation picks up amid higher energy prices as a result of the US-Iran conflict. The monthly reading shows that consumer prices were up 0.9%, the steepest jump since February 2024.The breakdown shows that food price inflation was seen at 1.8% (previously 2.0%) and services inflation at 1.7% (previously 1.6%). As such, core prices should keep thereabouts as in February with the latest spike here being largely energy-related. Of note, energy prices surged by 7.3% in March after exhibiting a 2.9% monthly decline in February.But over time if allowed to become more entrenched, higher energy prices will spill over to other aspects of the economy. That is a lesson that we are already familiar with from the impact of the Russia-Ukraine conflict in 2021-22.If the ECB wants to respond next month, they might have good reason to do so. But if their key metric is to wait for the impact to show up on core prices, then perhaps we might see them put off from raising interest rates in April.That of course unless policymakers feel the need to be proactive about the situation, which typically isn't something you would associate with most central banks these days. This article was written by Justin Low at investinglive.com.

EUROPEAN SESSIONIn the European session, the main highlight will be the Eurozone inflation data. The Headline CPI Y/Y is expected at 2.6% vs 1.9% prior, while the Core CPI Y/Y is seen at 2.4% vs 2.4% prior. Having said that, inflation is expected to increase substantially in March due to elevated energy prices, so it's not going to be a surprise at all. The ECB will likely look through the March inflation spike but might also lay the groundwork for a rate hike in June if the US-Iran war and the supply disruptions continue.The market is pricing a 58% chance of a rate hike in April and 86% in June. The total tightening expected by year-end is 70 bps.AMERICAN SESSIONIn the American session, we get the US Consumer Confidence and the US Job Openings data. The US Consumer Confidence is expected at 88.0 vs 91.2 prior. A lower than expected figure wouldn't be a surprise of course given that the war and higher energy prices are negatively impacting growth expectations while increasing inflation fears.The US Job Openings is expected at 6.890M vs 6.946M prior. The labour market has been clearly stabilising in the first part of the year as tariff and business uncertainty eased. The US-Iran war brought renewed uncertainty while also weighing heavily on the stock market. This could weaken the labour market in the short-term. Anyway, the Job Openings data is for February, so it's old news and will likely be ignored.Lastly, it goes without saying that the focus is solely on US-Iran headlines and the ongoing negotiations. WSJ reported tonight that Trump would be open to end the war without pushing for a reopening of the Strait of Hormuz. That would be great news for the markets as the Iranians will likely reopen the Strait as soon as the US forces withdraw. But, we will need Trump to announce that to make it happen. He's certainly very uneasy right now with the stock market making new lows, much higher Treasury yields, triple digit oil prices and the Fed in "wait and see" mode. CENTRAL BANK SPEAKERS07:00 GMT/03:00 ET - ECB's Panetta (neutral - voter)07:30 GMT/03:30 ET - ECB's Muller (hawkish - voter)08:00 GMT/04:00 ET - ECB's Kazimir (hawkish - voter)13:10 GMT/09:10 ET - ECB's Sleijpen (neutral - voter)16:00 GMT/12:00 ET - Fed's Goolsbee (neutral - non voter)17:10 GMT/13:10 ET - Fed's Schmid (hawkish - non voter)19:00 GMT/15:00 ET - Fed's Barr (neutral - voter)21:00 GMT/17:00 ET - Fed's Bowman (dovish - voter) This article was written by Giuseppe Dellamotta at investinglive.com.

German import prices for the month of February showed a 0.3% increase compared to the previous month. But when benchmarked against the same month a year ago, import prices were seen down 2.3%. The latter figure is the same for January and also December last year.The main drag for the year-on-year decline in import prices had been energy prices. Compared to February 2025, energy prices were down nearly 21% when viewing the numbers for last month. So, that's the key factor in play. That as when you exclude energy prices from the equation, import prices were seen down just 0.2% compared to February last year.As we get into March data next month, expect the picture above to change drastically.Destatis already notes today that "the hostilities in Iran and the Middle East had no impact on the February import or export price results". But as energy prices soar in recent weeks, that is going to see a material jump in overall import prices in Germany.And over time, that will even spill over to impacting import prices for the likes of capital goods, intermediate goods, and consumer goods. So, there is that to keep in mind.That especially since the Middle East conflict doesn't seem to be finding much of a resolution yet. And with Iran still threatening key energy facilities across the region, that won't help in easing the upward pressure on natural gas prices in Europe.To make matters worse, this is also coming at a time when German consumption is also showing some signs of weakness. That comes after the unexpected decline in retail sales in February here.With higher energy prices set to hit in the months ahead, that will also weigh further on overall consumption and economic activity in Europe's largest economy. This article was written by Justin Low at investinglive.com.

Prior +0.3%UK house prices unexpectedly rose in March, with the jump being quite a big one at that. The monthly increase in house prices is the most since December 2024.Typically, there is a bit of a "spring bounce" in the market. That being said, it could be a case of home buyers rushing to secure mortgage deals with the current rate amid fears of higher interest rates to come later on. That as the US-Iran conflict has significantly changed the central bank outlook and also the general trajectory of the global economy and inflation.So, it is arguably a mix of seasonal and psychological factors driving up prices in the past month.At the same time though, a negative hit to consumption and the overall economy is also a negative hit to the housing market outlook. As such, that is creating a bit of a muddy and messy picture at the moment. The monthly spike above is likely to be a one-off, especially as the US-Iran conflict is more likely to cloud the outlook rather than drive up demand conditions consistently in the months ahead. This article was written by Justin Low at investinglive.com.

Prior -0.9%; revised to -1.1%And once again, German retail sales underwhelms on expectations and this time it is being made to look worse than previous times. For one, it comes alongside a negative revision to the January figure. But more importantly, it paints a negative backdrop in the month before we even see the US-Iran conflict impact hit on prices, inflation, and the economy.Food store sales declined by 1.4% on the month while non-food store retailing saw a 0.7% increase in sales. The latter at least helps to offset slightly the negative drag on the overall report.This kind of backdrop is not quite what you'd like to see as price pressures have already been keeping more stubborn in Europe's largest economy. Now when you have to factor in the impact of higher energy prices, that will bite at consumption activity even more.As such, that will make for a tough outlook for the German economy in the months ahead. That especially as the manufacturing sector recovery is also at risk of being derailed amid a surge in input cost inflation, which will then weigh on demand.Stagflation risks might well creep back into the picture and that will be another key risk factor that the ECB has to be careful of. This article was written by Justin Low at investinglive.com.

Prior +0.1%GDP +1.0% vs +1.0% y/y prelimPrior +1.2%No changes to the initial estimates as the UK economy squeezes out marginal growth in the final quarter of last year. In output terms, growth in the latest quarter was driven by an increase of 1.2% in production, while the construction sector fell by 2.1% and the services sector showed no growth.As a whole, UK GDP is estimated to have increased by 1.3% annually in 2025. That follows from the growth estimate of 1.1% in 2024. This article was written by Justin Low at investinglive.com.

There are a few to take note of on the day, as highlighted in bold below.The first being for EUR/USD at the 1.1500 level. The expiries are large in size and so could act as a bit of a ceiling to price action on any upside extensions. The dollar has been keeping firmer since last week already, with the pair poised for six straight days of declines. So, the trend does reaffirm that the downside pressure appears to be more persistent currently.Even as risk sentiment may be faring better today after the Wall St Journal report on Trump mulling over ending the war without reopening the Strait of Hormuz, it might prove to be a false dawn. As said before, nothing changes for markets until something changes on the Strait of Hormuz. So, keep that in mind.The dollar is still holding steadier so far today, even as we see equities nudge a bit higher. So, it does show that traders are not getting too carried away just yet.Then, there is one for USD/CHF at the 0.7950 level. The pair has breached above its key daily moving averages at the end of last week. That is the first time it pushes above both key technical levels since April last year. That being said, the 0.8000 level is still keeping things in check.For now, buyers will stay poised in keeping above the 200-day moving average at 0.7943. The short-term momentum is also relying on the 100-hour moving average at 0.7953 currently. So, the expiries might just add another layer in helping buyers stay interested on any light pullbacks.And lastly, there is one for AUD/USD at the 0.6825 level. That rests close to the 100-day moving average at 0.6818 with the pair continuing to fall since last week. The drop this week sees a fresh two-month low for AUD/USD, reaffirming that sellers remain in control as the US-Iran conflict extends and higher oil prices remain.The expiries could pair up with the key technical level above in limiting the downside for today. However, things can quickly turn uglier if risk sentiment falters and we get a break of the key level.For more information on how to use this data, you may refer to this post here.Apart from that, do be reminded that month-end trading may also be a factor today. In that lieu:Dollar buying looks to be the flavour this month-endMonth-end flows point to dollar buying into the fix - BofA This article was written by Justin Low at investinglive.com.

The big news as we get into the new day is this one here: Trump open to ending Iran war without reopening Strait of Hormuz - WSJThe report says that the US might look to wind down military activity in the Middle East. That after it accomplishes in degrading Iran's naval and missile capabilities. It might be one that is tough to imagine though, as it would see US president Trump still not get what he wants exactly. That being said, is it all an attempted diversion though?There's still talk of ground forces moving in over the past few days and that is something to be mindful of. Despite whatever reports, Trump will still need to frame this war in a way where he walks out as the victor - whatever that means.In this case, he can boast about taking Iran down a notch or two. But come what may, nothing changes for markets until something changes on the Strait of Hormuz. I've said it already all throughout this war episode.The issue with effectively handing over control of the strait to Iran means that the US does not hold the ace card here. From an economic perspective, Iran is the one firmly in the driver's seat unless their ability to control the strait diminishes significantly.But as long as the threats are there and it remains in de facto closure, Iran has leverage to work with to push back against Trump. That especially as we know that this war has everything that Trump hates in markets.So S&P 500 futures may be up 0.9% on the day now with bond yields also coming off the boil this week. But as we've seen with previous incidences, this might just be a false dawn as it doesn't mean anything to global markets and major economies unless passage along the Strait of Hormuz returns to normal.Otherwise, this is going to be just another temporary respite. That before oil prices start to ramp higher again and we see that cascade to broader markets and bite at risk sentiment. This article was written by Justin Low at investinglive.com.

Global stocks see biggest selling in a year. Hedge funds ramp shorts (Goldman Sachs data)China factory activity hits 1-year high as PMIs return to expansionChina March official PMIs: Manufacturing 50.4 (exp 50) Non-manufacturing 50.1 (exp 49.9)Tokyo inflation cools further but underlying price pressures remain intactPBOC sets USD/ CNY central rate at 6.9194 (vs. estimate at 6.9209)WSJ: Trump open to ending Iran war without reopening Strait of HormuzRBA March Minutes: Members agreed further tightening would likely be neededNZ business confidence and activity collapse. Inflation pressures remain elevated.Australia to scrap junior pay rates for 18–20-year-olds in major wage shiftJapan February retail sales drop below expected and prior, industrial output soft alsoJapan Tokyo Core CPI 1.7% y/y , below expected and prior both 1.8%Australia confidence hits record low and inflation expectations hit record highUK shop price inflation rises as Iran war lifts supply chain costsTanker hit in Dubai as missiles intercepted in Saudi Arabia, Gulf tensions remain elevatedPete Hegseth’s broker looked to buy defence fund before Iran attack – FTRBA weighs in, to lower costs for businessFed’s Williams says energy outlook tied to markets, core inflation containedReports of 'unknown projectile' hitting a tanker in Persian Gulf near Hormuz, caused fireNetanyahu says Israel weakened Iran missile capabilities, destroyed factoriesHSBC says gold behaving like risk asset despite geopolitical tensions, but still supportedMore from Fed's Williams: Monetary policy is in the right placeStocks close mostly lower led by small cap stocksinvestingLive Americas FX news wrap 30 Mar: Geopolitics talks lift then rattle marketsFed's Williams speaking: Tariffs and Iran war will push headline inflation higherIn brief:Iran-linked strike hits Kuwaiti oil tanker in Dubai port; fire reported Saudi Arabia intercepts 8 Iranian ballistic missiles targeting Riyadh Explosions reported in Isfahan amid ongoing US/Israel strikes Gulf states reportedly pushing US toward ground invasion Oil reverses gains after Trump signals willingness to end war without reopening Hormuz Tokyo CPI continues to cool; China PMIs return to expansion RBA minutes reinforce hawkish stance; inflation expectations hit record high Equities weaker in Asia; gold higher; FX largely rangeboundGeopolitical tensions escalated further, with multiple flashpoints across the Middle East. Iran struck a fully laden Kuwaiti oil tanker anchored in Dubai’s port, damaging the hull and igniting a fire onboard, according to Kuwait Petroleum Corporation. At the same time, Saudi Arabia reported intercepting eight Iranian ballistic missiles targeting Riyadh, near key military infrastructure.Further signs of intensification came with large explosions reported in the Iranian city of Isfahan, following strikes attributed to Israel and/or the United States. Separately, reports citing Gulf diplomatic sources suggested the UAE, alongside Kuwait and Bahrain, is pushing for a US ground invasion of Iran, pointing to rising pressure for a broader escalation.Despite the worsening security backdrop, oil saw sharp two-way price action. Crude initially extended gains on the escalation and tanker strike, but later reversed and moved lower after reports that US President Trump is willing to end the conflict without reopening the Strait of Hormuz, easing immediate fears of a prolonged supply shock. Given the continuing US troop build up in the region this from trump would seem to be misdirection. On the data front, Tokyo inflation continued to cool across all key measures, with headline, core and core-core readings all slowing to multi-month or multi-year lows, reinforcing the view of near-term softness in Japanese price pressures. In contrast, China’s March PMIs surprised to the upside, with manufacturing returning to expansion and hitting a 12-month high, signalling a rebound in activity.Central bank developments remained in focus, with the RBA minutes confirming a hawkish tilt. While the Board was split on timing, members broadly agreed further tightening is likely, particularly as inflation risks rise. This was reinforced by an ANZ survey showing inflation expectations have surged to a record high.Across markets, gold moved higher amid the geopolitical backdrop, while Asian equities weakened, with the Kospi briefly entering bear market territory and Chinese indices posting declines. Major FX pairs traded in relatively tight ranges.Looking ahead, attention will turn to a scheduled US military briefing on Operation Epic Fury, which may provide further clarity on the trajectory of the conflict. Scheduled for 8am US Eastern time. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Global equities saw largest net selling since April 2025 Marks sixth consecutive week of equity outflows Selling heavily skewed toward short positions (5.6:1 vs longs) North America and Europe led selling in dollar terms Tech, industrials and healthcare hardest hit Asia saw sharp divergence between EM and DM flows European short exposure hits 10-year highGlobal equity markets experienced their largest wave of net selling in nearly a year last week, as hedge funds extended a sustained run of outflows amid rising macro uncertainty, according to Goldman Sachs Prime Services data.The bank’s weekly positioning report showed that global equities recorded their biggest net selling since April 2025, marking the sixth consecutive week of outflows. The move was driven predominantly by short selling, which outpaced long buying by a ratio of 5.6 to 1, highlighting a decisive shift toward defensive and bearish positioning.Selling was broad-based across regions, with North America and Europe leading in dollar terms. In sectoral terms, seven of the eleven major sectors saw net selling, with information technology, industrials and healthcare experiencing the heaviest pressure. In contrast, consumer staples, energy and materials attracted relative buying interest, suggesting a rotation toward more defensive and commodity-linked exposures.Asia also saw notable selling, recording its largest percentage net outflow since April 2025. However, flows diverged sharply within the region. In emerging Asia, selling was driven by long liquidation, while in developed Asia it was driven by increased short positioning. The shift was particularly pronounced in Korea, where a large portion of year-to-date buying was unwound during March.European equities remained a focal point for bearish positioning, with hedge funds extending their selling streak to six consecutive weeks. Short exposure in European macro products has risen to 11% of total exposure, the highest level in a decade, with the UK, Ireland and Germany seeing the most significant selling.Despite the broad-based selling, allocations to Asia remain elevated, indicating that while sentiment has deteriorated, investors have not fully exited positions, leaving scope for further adjustment depending on how macro risks evolve. This article was written by Eamonn Sheridan at investinglive.com.

China’s manufacturing PMI rose to 50.4 in March, a one-year high, with all PMIs returning to expansion, though rising input costs and Middle East war risks threaten the durability of the recovery.Summary:China March PMIs returned to expansion across the board Manufacturing PMI rose to 50.4 (exp. 50.0, prev. 49.0) — 1-year high Non-manufacturing PMI at 50.1 (prev. 49.5) Composite PMI improved to 50.5 (prev. 49.5) Demand recovery drove rebound, including output and new orders Input costs surged, signalling renewed inflation pressure Middle East war adds downside risk via energy and trade channelsChina’s factory activity expanded at the fastest pace in a year in March, with official data showing a broad-based return to growth across manufacturing and services, offering a near-term boost to confidence in the world’s second-largest economy.The official manufacturing PMI rose to 50.4 from 49.0 in February, moving back into expansion territory and exceeding expectations. The reading marked the strongest level in 12 months, supported by a rebound in demand following earlier weakness. Output and new orders both improved meaningfully, while export orders, although still in contraction, showed a notable recovery.The non-manufacturing PMI also returned to expansion, rising to 50.1 from 49.5, while the composite PMI climbed to 50.5, signalling a broader improvement in overall economic activity.Part of the strength likely reflects post-Lunar New Year normalisation, as firms resumed production following an extended holiday period. However, the data also suggests underlying demand has stabilised, supported by government policy measures and resilient external demand, particularly in electronics and industrial exports.That said, the recovery comes with growing cost pressures. Input prices surged sharply, with the raw materials price index jumping to 63.9, highlighting the impact of rising commodity prices and stronger procurement demand. This raises the risk that margin pressure could intensify across the manufacturing sector.Looking ahead, the outlook remains clouded by escalating geopolitical risks. The Middle East conflict is increasingly seen as a potential headwind, with disruptions to energy markets and global shipping routes threatening to weigh on supply chains and export flows. The region accounts for a significant share of China’s trade, including around a fifth of vehicle exports.Overall, while March’s PMI data points to a cyclical rebound in activity, the sustainability of the recovery will depend heavily on external conditions, particularly energy prices and global trade stability. This article was written by Eamonn Sheridan at investinglive.com.

Just the data. China March official PMIs all retrun to expansion:Manufacturing 50.4expected 50, prior 49.0Non-manufacturing 50.1expected 49.9, prior 49.5Composite 50.5expected 50.2, prior 49.5I'll have more to come on this separately. Added, here we go:China factory activity hits 1-year high as PMIs return to expansion This article was written by Eamonn Sheridan at investinglive.com.

Summary:Tokyo CPI slowed to its weakest pace in four years in March Headline inflation eased to 1.4% (prev. 1.5%) Core CPI (ex-fresh food) slowed to 1.7% (exp. 1.8%) Core-core inflation (ex-food, energy) eased to 2.3% (prev. 2.5%) Government subsidies continue to suppress price pressures Underlying inflation still above 2%, but momentum cooling Inflation in Tokyo slowed to its weakest pace in four years in March, reinforcing the view that near-term price pressures in Japan are easing even as underlying inflation dynamics remain intact. Tokyo area March core CPI rises at slowest pace since April 2024 Tokyo area March core-core CPI rises at slowest pace since March 2025 Tokyo area March overall CPI rises at slowest pace since March 2022Headline consumer prices rose 1.4% year-on-year, down from 1.5% in February and marking the softest pace since March 2022. Core inflation, which excludes fresh food, also cooled to 1.7%, undershooting expectations and remaining below the Bank of Japan’s 2% target for a second consecutive month.A broader measure of underlying inflation, which strips out both fresh food and energy, eased to 2.3% from 2.5% previously. While still above target, the moderation suggests that momentum in price growth is softening, particularly as government measures continue to dampen energy and food costs.The slowdown reflects ongoing policy efforts to shield households from rising living costs, with subsidies helping offset the impact of higher import prices driven by a weaker yen. These measures have played a key role in containing headline inflation in recent months, even as global cost pressures remain elevated.However, the cooling trend is widely expected to prove temporary. Rising energy prices linked to the Middle East conflict, alongside persistent currency weakness, are likely to reintroduce upward pressure on inflation in the months ahead. At the same time, improving wage dynamics are expected to support a more durable inflation backdrop.For the Bank of Japan, the data reinforces a delicate balancing act. While the recent slowdown may reduce urgency in the near term, policymakers have signalled confidence that inflation will pick up later this year as subsidy effects fade and wage growth feeds through more fully.Overall, Tokyo inflation continues to point to a gradual transition rather than a reversal, with underlying price pressures still consistent with the central bank’s longer-term normalisation path. This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate.PBOC injects 32.5bn yuan in 7-day reverse repos at 1.4% (unchanged) in open market operations This article was written by Eamonn Sheridan at investinglive.com.

Trump is reportedly open to ending the Iran war without reopening the Strait of Hormuz, signalling a shift in priorities, though continued U.S. troop build-up suggests mixed messaging and ongoing risks to global energy flows. Wall Street Journal has the article, though (see below) I am wondering ifs its misdirection given the surge in US troops and other military assets in the region. Summary:Trump reportedly open to ending war without reopening Strait of Hormuz Would prioritise degrading Iran’s military over restoring energy flows Hormuz closure continues to disrupt global trade and energy markets U.S. still deploying additional troops and assets to the region Policy signals remain mixed, with shifting objectives and messaging Raises risk of prolonged disruption despite potential de-escalationU.S. President Donald Trump is reportedly willing to wind down the military campaign against Iran even if the Strait of Hormuz remains largely closed, signalling a potential shift in strategic priorities as the conflict enters its second month.According to officials familiar with internal discussions, the administration is increasingly focused on achieving core military objectives, including degrading Iran’s naval and missile capabilities, rather than immediately restoring the flow of global energy through the critical shipping chokepoint. The Strait of Hormuz, which handles roughly 20% of global oil flows, has seen traffic reduced to a trickle following Iranian mining activity and threats against commercial vessels. The disruption has already pushed oil prices above USD100/bbl and triggered shortages across key industrial supply chains.Officials reportedly assessed that forcibly reopening the waterway would require a significantly longer and more complex military campaign, potentially extending beyond the administration’s preferred timeline. As a result, the current strategy appears to favour winding down active hostilities while shifting pressure onto diplomatic channels and allied nations to address the shipping disruption.However, the messaging remains fluid. Trump has alternated between downplaying the importance of the strait to the U.S. economy and threatening direct action against Iranian energy infrastructure if it is not reopened. At the same time, senior officials have suggested that securing freedom of navigation could be deferred to a later phase or handled through multinational efforts.Notably, the apparent willingness to tolerate a partially closed Hormuz sits uneasily alongside a continued build-up of U.S. military forces in the region, including additional naval deployments and the potential for expanded ground troop presence. This divergence raises the possibility that current rhetoric may reflect tactical signalling rather than a definitive shift in strategy.Overall, the evolving stance highlights a complex balancing act: pursuing de-escalation while maintaining pressure on Iran, even as the global economic fallout from disrupted energy flows continues to intensify. This article was written by Eamonn Sheridan at investinglive.com.

Full text is here.Summary:RBA minutes after March hike was a tightly split 5-4 decision Board agreed financial conditions needed to be restrictive Members agreed further tightening would likely be needed, but differed on timing Oil near USD100/bbl seen capable of lifting June-quarter CPI to around 5% Majority feared inflation expectations could become unanchored without prompt action Minority preferred to wait, citing uncertainty around growth, consumption and labour market risksMinutes from the Reserve Bank of Australia’s March meeting showed the Board was united on the need for restrictive financial conditions, but sharply divided on whether to deliver an immediate rate hike, underscoring the difficult trade-off created by the Middle East conflict and its inflationary impact. The Board ultimately raised the cash rate by 25bp in a 5-4 vote, with all members agreeing that further tightening would likely be needed at some point, even if there was disagreement over timing. The minutes highlighted that policymakers saw the surge in oil prices as materially increasing the risk that inflation would remain above target for an extended period. The RBA judged that if oil prices were to remain around USD100 per barrel, annual headline CPI inflation could rise to around 5% in the June quarter, a marked lift from February’s 3.7%. For the majority, that risk was serious enough to warrant an immediate response, particularly given concerns that a delay could allow the oil shock to seep into inflation expectations and broader price-setting behaviour. Those members also argued that financial conditions were still not sufficiently restrictive and may even have remained accommodative, while downside risks to the labour market had eased in recent months and may have reversed further. In their view, acting in March was important to demonstrate the Board’s commitment to returning inflation to target. The minority took a more cautious view, arguing that uncertainty caused by the Middle East conflict could yet weigh meaningfully on domestic demand. They pointed to the possibility that household consumption could prove weaker than forecast and that the labour market may be looser than the majority judged. Even so, they did not rule out further hikes, preferring instead to wait for more information before tightening again. Overall, the minutes reinforce a hawkish message from the RBA: the hurdle for pausing has risen, but the path ahead is highly data- and conflict-dependent. The Board made clear it cannot predict the future course of rates with confidence while the war continues, leaving policy finely balanced between inflation control and rising downside risks to growth. Reserve Bank of Australia Governor Bullock This article was written by Eamonn Sheridan at investinglive.com.

Summary:ANZ Business Confidence (Mar): 32.5 (prev. 59.2) ANZ Activity Outlook (Mar): 39.3 (prev. 52.6)ANZ Business Outlook shows weak business confidence persists Inflation indicators remain elevated despite softer activity signals Pricing intentions and cost pressures still sticky Activity indicators mixed, pointing to slowing momentum Firms cautious on outlook amid uncertainty and higher costs Data highlights ongoing inflation persistence riskNew Zealand business sentiment deteriorated sharply in March, even as inflation pressures remain elevated, highlighting a growing divergence between weakening activity and persistent price pressures.The latest ANZ Business Outlook survey showed a significant pullback in forward-looking indicators, with headline business confidence dropping to 32.5 from 59.2 previously, while firms’ own activity outlook fell to 39.3 from 52.6. While both measures remain in positive territory, the magnitude of the decline points to a clear loss of momentum across the economy.The deterioration in sentiment comes amid heightened uncertainty and tighter financial conditions, with businesses becoming more cautious on the outlook for demand and investment. The sharp fall in activity expectations suggests that the economy may be entering a softer phase, even if conditions have not yet turned outright contractionary.However, the survey also reinforces that inflation pressures remain sticky. Pricing intentions and cost indicators continue to signal that firms are facing elevated input costs and are still passing these through to consumers. This dynamic underscores the risk that inflation may prove more persistent, even as growth slows.The combination of weakening confidence and resilient inflation indicators presents a challenge for the Reserve Bank of New Zealand. While softer activity would typically support a more accommodative stance, ongoing pricing pressure limits the scope for policy easing in the near term.Overall, the survey points to an economy losing momentum but still grappling with entrenched inflation dynamics, leaving policymakers balancing downside growth risks against the need to ensure inflation pressures are contained. This article was written by Eamonn Sheridan at investinglive.com.