The Bank of Canada is widely expected to keep the policy rate unchanged at 2.25% tomorrow. The central bank will likely maintain a cautious stance and a "wait and see" approach amid sluggish economy and inflationary risks stemming from US-Iran war. The BoC will also release new economic forecasts which are expected to mirror the other central banks' outlooks, with upward revision for inflation and downward revision for growth.Recent data has been strongly supporting a neutral stance. Headline inflation climbed to 2.4% in March, largely driven by a spike in energy costs due to the disruptions in the Strait of Hormuz, but the main core inflation metric (Trimmed-Mean CPI) fell to 2.2%, very close to the 2% mid-range target.The recent employment reports have been weak, pointing more towards rate cuts than rate hikes. While a weak labor market and sluggish growth would normally argue for further rate cuts to stimulate activity, the risk of a secondary inflation wave has been keeping the BoC on the sidelines. Central banks typically look through volatile energy prices, but the concern for the BoC will be whether these costs seep into broader inflation expectations and higher wage growth. The risks for the Canadian economy do not stop with the US-Iran war though as there's still uncertainty around the upcoming CUSMA renegotiations.All in all, tomorrow's decision is unlikely to bring much volatility as the central bank will likely stress data-dependency and avoid pre-committing to any rate path. The market is pricing in a rate hike in the fourth quarter of 2026, so traders will focus on any change in tone and communication that could point to an earlier than expected rate hike or a strong pushback against market's pricing. This article was written by Giuseppe Dellamotta at investinglive.com.

It's not just the US-Iran conflict, major central bank decisions, and key US tech earnings that will be in the picture this week. Just be mindful that month-end shenanigans are also something to consider in the days ahead. Yes, we're already at the end of another crazy month in markets.And according to Credit Agricole, their month-end fixing model points to strong dollar selling after weighing in all the usual drivers."Global equity markets were broadly firmer in April. In FX, the USD was broadly weaker on the month.Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest month-end portfolio-rebalancing flows are likely to be strong USD selling across the board, with the strongest sell signal in the case of the USD vs EUR."Their argument points to EUR/USD making strides higher, all else being equal. The pair is seeing a bit of a mixed start this week, bouncing higher yesterday after finding support from its 200-day moving average last week. However, near-term gains are more limited closer to the 200-hour moving average - seen at 1.1742 currently. That before any potential talk of revisiting the 1.1800 level.Just be wary that these month-end fixing calls are not the be all, end all in deciding price movements. In a time like this, headline risks remain paramount and the biggest driver of price action. This is just part of what will feed into trading sentiment as a whole in trying to get a better handle on how markets might behave as we look to close out the month of April. This article was written by Justin Low at investinglive.com.

FUNDAMENTAL OVERVIEWSilver has now erased all the gains since the start of US-Iran ceasefire as the current stalemate is keeping the hawkish Fed worries alive. In fact, despite lower real yields, looser financial conditions and a weaker US dollar, the hawkish Fed bias has been the main culprit capping the bullish momentum in precious metals. This is unlikely to change anytime soon as even if the US-Iran war officially ends and the Strait of Hormuz is reopened, the increase in economic activity might keep inflation higher for longer and force the Fed to hold rates steady. Nonetheless, the reopening of the Strait should give the market a boost in the short-term as it would ease some inflation worries and bring back rate cut expectations. After that though, traders will be focused on economic data and the Fed’s stance.Tomorrow, we have the FOMC policy decision and although the Fed is expected to keep everything unchanged amid the US-Iran uncertainty, there’s a risk of a more hawkish leaning due to resilient US data and a longer than expected US-Iran war. A neutral Fed shouldn’t bring much volatility, but a more hawkish one could add more pressure on silver.SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that silver extended the losses after the price fell back below the key 78.00 level. The natural target for the sellers should be the major upward trendline around the 67.00 handle. If the price gets there, we can expect the buyers to step in with a defined risk below the trendline to position for a rally back into the 78.00 level. The sellers, on the other hand, will look for a break to extend the drop into the next trendline around the 55.00 handle.SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have a key swing level at 72.60. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into new highs. The sellers, on the other hand, will look for a break to increase the bearish bets into new lows.SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor downward trendline defining the drop into the 72.60 level. If the price breaks above it, we can expect the buyers to increase the bullish bets into the next trendline around the 75.00 handle. The sellers, on the other hand, will wait for the pullback into the 75.00 handle to position for a drop into new lows. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we get the US Consumer Confidence report. Tomorrow, we have the FOMC policy decision. On Thursday, we get the US Q1 GDP, the US Employment Cost Index and the latest US Jobless Claims figures. On Friday, we conclude the week with the US ISM Manufacturing PMI. This article was written by Giuseppe Dellamotta at investinglive.com.

The fallout from the Middle East conflict is certainly taking a toll on households and the survey results definitely show it. As mentioned before, the prices we see on our screens reflect those of futures contracts. They are not the same as physical prices and prices at the pump, which have skyrocketed.And the longer the war drags on, the spillover impact becomes more embedded into all parts of the economy. In turn, that is when consumers will have to deal with higher prices all around. And when prices go up, they almost never come back down even if the supply shock dissipates eventually.The latest ECB consumer expectations survey for March highlights the negative outlook shared by consumers at the moment. Of note, the median estimate for inflation expectations for the year ahead has jumped to 4.0% - the highest since October 2023. That is a marked increase from the 2.5% reading in February.And across all measures, inflation expectations have increased markedly as well. The long-term measure may not be as evident but continues to keep above the 2% inflation target level from the ECB.Trouble, trouble. This article was written by Justin Low at investinglive.com.

One year ahead inflation expectations rise to 4.0% in March from 2.5% in February3 years ahead Inflation expectations rise to 3.0% vs 2.5% prior 5 years ahead rise to 2.4% from 2.3%GDP growth seen at -2.1% in year ahead vs -0.9% seen a month earlierFull report hereThe latest ECB consumer expectations survey for March 2026 was marked by surging inflation expectations and worsening outlook for economic growth. Compared with February, median consumer perceptions of inflation over the past year climbed from 3.0% to 3.5%. More striking, however, was the jump in future expectations; median inflation forecasts for the next 12 months surged to 4.0% from 2.5%, while the three-year outlook rose to 3.0%. Even the long-term five-year forecast saw a slight uptick to 2.4%. This broad increase in inflation expectations was accompanied by heightened uncertainty, though a consistent demographic trend remained: younger respondents and those in higher-income brackets generally maintained lower inflation expectations than older and lower-income cohorts.The financial pressure on households is further evidenced by the disconnect between income and spending. While expectations for nominal income growth over the next 12 months remained stagnant at 1.2%, consumers reported a sharp increase in both past and future spending. Perceived nominal spending growth over the previous year rose to 5.1%, and expected spending growth for the year ahead climbed to 4.1%, the highest level recorded since mid-2023. This suggests that consumers anticipate having to allocate more of their unchanged wages toward essential costs, particularly in the lower three income quintiles where spending expectations were highest.Macroeconomic sentiment has soured alongside these rising costs. Economic growth expectations for the coming year dipped further into negative territory, falling to -2.1% from February’s -0.9%. This pessimism extends to the labor market, where the expected unemployment rate in 12 months’ time increased to 11.3%. While consumers still view the labor market as broadly stable, expecting only a slight rise from the perceived current unemployment rate of 10.6%, there is a clear divide in sentiment based on wealth. Lower-income households anticipate a much harsher job market, with expected unemployment reaching 13.7%, compared to just 9.7% for higher-income respondents.Finally, the housing and credit sectors are showing signs of increased strain. Expectations for home price growth edged up to 3.7%, while anticipated mortgage interest rates for the year ahead rose to 4.9%. Access to capital is also becoming more difficult; the net percentage of households reporting a tightening of credit access over the past year reached levels not seen since early 2024. Looking forward, consumers are bracing for even tighter credit conditions, suggesting that the combination of high interest rates and stricter lending may continue to weigh on household mobility and major purchases in the months to come.ECB rate hike expectations rose following the ECB survey. Traders now price in 70 bps of tightening by year-end compared to 64 bps on Friday. The central bank is expected to hold rates steady this week while maintaining a hawkish bias, with the June meeting remaining live for a rate hike unless the US-Iran war resolves before then. This article was written by Giuseppe Dellamotta at investinglive.com.

FUNDAMENTAL OVERVIEWUSD:The US dollar has come under renewed pressure yesterday despite the lack of progress in the US-Iran negotiations and the Strait of Hormuz closure. What has been weighing on the greenback to start the week was the news saying that Iran proposed to reopen the Strait of Hormuz if the US blockade is lifted and then hold nuclear talks later. This constant push for a diplomatic resolution instead of another full-fledged war has been supporting the risk sentiment on expectations that a deal would be reached eventually. Nonetheless, the stalemate is causing oil prices to rise, and we are now basically back around triple digit levels.Reports are also saying that Trump is unlikely to accept Iran’s proposal, which might keep the risk sentiment in check and support the US dollar in the short-term. Overall, we are now in a consolidation phase until the next major catalyst. Tomorrow, we have the FOMC policy decision and although the Fed is expected to keep everything unchanged amid the US-Iran uncertainty, there’s a risk of a more hawkish leaning due to resilient US data and a longer than expected US-Iran war. A neutral Fed shouldn’t bring much volatility, but a more hawkish one could give the US dollar a boost given the recent selloff.JPY:On the JPY side, the BoJ today left interest rates unchanged at 0.75% as widely expected. The quarterly outlook report showed a significant upward revision for inflation and a downgrade for growth due to the US-Iran war. The highlight of the decision though were the three dissenters who voted for a rate hike, which gave the Japanese yen a short-term boost.Most of the gains were pared back as Governor Ueda struck a more measured tone as he noted that they want to take a little bit more time in gauging how the Middle East situation would affect Japan’s economy and acknowledged that underlying inflation is currently a bit below the 2% target. He added that they expect underlying inflation to be around 2% from second half 2026 but admitted that he doesn’t know how many months it would take to gauge timing of their next rate hike. All in all, the bias for the Japanese Yen remains neutral to bearish. USDJPY TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDJPY continues to consolidate between the 158.00 support and the 160.00 handle. If we get another pullback from the recent highs, we can expect the buyers to step in again around the support with a defined risk below it to position for a rally into the 162.00 handle. The sellers, on the other hand, will want to see the price breaking lower to open the door for a drop into the major upward trendline around the 155.00 level.USDJPY TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see the price broke the downward trendline and started to consolidate just above it. We now have another minor downward trendline defining the consolidation. The sellers will likely continue to lean on it with a defined risk above it to keep pushing into new lows, while the buyers will look for a break higher to increase the bullish bets into the 162.00 handle next.USDJPY TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the sellers will either look for a rejection around the minor downward trendline or a break below today’s low, while the buyers will wait for a break above the trendline to increase the bullish bets into new highs. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we get the US Consumer Confidence report. Tomorrow, we have the FOMC policy decision. On Thursday, we get the US Q1 GDP, the US Employment Cost Index and the latest US Jobless Claims figures. On Friday, we conclude the week with the US ISM Manufacturing PMI. This article was written by Giuseppe Dellamotta at investinglive.com.

The BOJ has stayed on hold as probability of baseline outlook has decreasedUnderlying price trend is still below targetPrefers utilising more time in evaluating Middle East situation and how it will impact economy, pricesTakes seriously the fact that there were three board members who dissented on the decision todayThe other six members were mindful of upward risks to inflationHowever, not seeing any immediate urgency to raise interest rates for nowMay raise interest rates if upside risks to prices emerge while downside risks to the economy remain limitedAny decision will depend on economy, inflation risks beyond what is happening to the Middle EastCommunicating closely with government on monetary policyThis certainly removes a lot of the hawkish elements from the decision earlier in the day. However, at least he points out that the consensus seems to be that policymakers are cautious about upside risks to the inflation outlook. That being said, they will have a lot to think about in trying not to make a misstep on policy setting.As mentioned earlier, moving too early risks crippling the economy at a time when surging oil prices are already taking a heavy toll on households and businesses. Adding to that, it also goes against the government's fiscal plans and makes worse the Takaichi trade.Besides that, the reaction here can easily be linked to dealing with cost-push inflation and that is already something monetary policy is not well equipped to handle in the first place. So, there's that.USD/JPY is now trading back up to 159.30 levels from around 159.00 earlier. This comes as risk trades are also looking more cautious with tech shares weighing down on US futures. S&P 500 futures are down 0.2% with Nasdaq futures down 0.4% currently. This article was written by Justin Low at investinglive.com.

Forecasts an economic slowdown for the coming fiscal year as Middle East tensions weighBut overall, economic outlook remains stable although conditional on supply chain situationFor now, Japanese economy shows moderate recovery signs despite some weaknessThat outlook assumes no major supply chain disruption thoughBOJ will keep raising interest rates while adjusting level of monetary supportThat will be according to changes in economic, price, and financial conditionsBoard member Takata recommended adding a reference that inflation target has been achievedRising oil prices may have greater impact on inflationBut policymakers need to be alert to the risk of additional economic slowdown due to supply shockBOJ has kept main scenario unchangedHowever, the odds are now lower for the outlook to be realisedWill act appropriately to avoid lagging behind the curveBut seeks more time in assessing Middle East conflict and the impact on economy, pricesUnderlying inflation remains slightly below the 2% targetThe comments follow from the BOJ policy decision earlier, in which the central bank left the short-term interest rate unchanged at 0.75%. However, three policymakers - namely Takata, Tamura, and Nakagawa - dissented against the decision in voting to raise interest rates to 1.00%. As such, that saw a 6-3 vote split among the BOJ board on the decision.Ueda's remarks are keeping in line with their decision but doesn't signal too much urgency at the balance. The fear for the BOJ is that they are now needing to respond to cost-push inflation and that may derail economic conditions. That especially since the government is also needing to balance out the fiscal side of things.And the main concern now is that markets are already pricing in this degree of tightening. So, the BOJ has to deliver at some point or risk the Japanese yen imploding further. And that will open up a whole different can of worms.It's a tough task. And they won't be the only ones having trouble navigating the current storm. From yesterday: Major central banks are up against a very tough task in navigating monetary policy next This article was written by Justin Low at investinglive.com.

IC (previously IC Markets), a leading global provider of online trading services, has announced a strategic partnership with Guillermo Ochoa, accelerating its expansion across Latin America with a sharp focus on Mexico—one of its fastest-growing markets. An icon of modern football, Ochoa continues to perform at the highest level with AEL Limassol, maintaining his status as one of Mexico’s most trusted and recognizable sporting figures. With a distinguished international career and widely expected to anchor Mexico’s goal in the next cycle of global competition, his influence across Mexico and Latin America remains unmatched. Through this partnership, IC secures exclusive rights to Ochoa’s name, image, and likeness across global marketing channels, enabling a high-impact, culturally resonant rollout across the region. The collaboration is designed to convert momentum into market dominance—combining IC’s global trading infrastructure with Ochoa’s credibility, reach, and deep-rooted trust among millions of fans. “This is a strategic move, not a branding exercise,” said Andrew Budzinski, Founder of IC. “Guillermo Ochoa represents performance under pressure, consistency at the highest level, and absolute trust—exactly what trading demands. As we scale aggressively in markets like Mexico, this partnership allows us to cut through faster, connect deeper, and convert stronger.”Ochoa added: “I have always believed that success comes from discipline, preparation, and performing when it matters most. IC shares that same mindset. This partnership is about connecting with people who are focused on improving, growing, and making smarter decisions every day, and I’m excited to be part of that journey with them.”IC will activate the partnership through a fully integrated, multi-channel strategy spanning broadcast, digital, and social ecosystems. Premium live match exposure across Latin America, combined with high-performance digital acquisition campaigns and localized content, is expected to significantly expand reach while driving measurable improvements in engagement, conversion, and client acquisition efficiency. This partnership strengthens IC’s growing global sports portfolio, alongside its high-profile relationship with the Haas F1 Team, reinforcing the brand’s positioning at the intersection of performance, precision, and global scale. As Latin America continues to emerge as a critical growth market, IC is doubling down on strategic investments that deliver both brand impact and commercial returns. About ICIC is a leading global provider of online trading services, offering access to a wide range of financial markets including forex, commodities, indices, and more. With a strong focus on technology, execution quality, and client experience, IC serves traders across multiple regions worldwide. This article was written by IL Contributors at investinglive.com.

EUROPEAN SESSIONIn the European session, we don't have much on the agenda other than a couple of low tier releases like the Spanish retail sales or Italian industrial production that are not going to change anything for the ECB. The focus remains on US-Iran headlines as the current stalemate is pushing oil prices back towards triple digit levels. The latest reports say that Trump is unlikely to accept Iran's proposal of opening the Strait of Hormuz and lift the US blockade before holding nuclear talks.It looks like both the parties think they have the upper hand and it's hard to see how this is going to change at the moment.AMERICAN SESSIONIn the American session, we have the US Consumer Confidence report which is expected to fall to 89.0 from 91.8 in the prior month due to US-Iran situation and higher energy prices.This is a market-moving report but the reactions are generally faded, which is likely to be the case today as well given the focus on US-Iran deadlock. This article was written by Giuseppe Dellamotta at investinglive.com.

There are a couple to take note of on the day, as highlighted in bold below.They are all for EUR/USD layered in between the 1.1700 to 1.1750 levels. Given the size of the expiries, we could see more cagey price action in the session ahead in and around the levels noted. That especially if market sentiment remains more guarded and cautious, as we have seen typically to be the case in European trading since last week.That being said, the floor for the pair at the moment remains closer to the 200-day moving average at 1.1675 currently. So, keep that in mind in case of any downside extensions. However, the expiries at 1.1700 could be a factor in pulling price action and keeping things more sticky in European morning trade.As for topside levels, the gains yesterday were limited by the 200-hour moving average instead. That is seen at 1.1744 currently and sits near the larger expiries above too. So, the expiries and the key technical level will act as a bit of a ceiling in limiting price movements to the topside.All of that of course is subject to headline risks and the broader market mood surrounding the US-Iran conflict. As things stand, we're still nowhere near finding a solution with both sides still not willing to talk. So, the overarching negative mood is still something to consider as it is the bigger driver of trading sentiment this week.There was a mix of headlines overnight with CNN initially reporting that the US and Iran may be close to a deal. However, that was countered by a WSJ report that Trump does not fancy Iran's proposal of separating nuclear talks from overall negotiations.For more information on how to use this data, you may refer to this post here. This article was written by Justin Low at investinglive.com.

Needs to call for more effective, proactive fiscal policyTo continue to expand domestic demandTo implement appropriately loose monetary policyWill ensure liquidity conditions remain ampleWill keep yuan exchange rate basically stableTo improve energy security, stabilise property market and price of agricultural productsTo orderly resolve risks related to local government debtThe readout reaffirms their existing policy path but there is a subtle leaning towards favouring stabilisation and security. If anything, that suggests a more consolidative tone in being more guarded against the narrative of a global growth slowdown. That especially as the US-Iran conflict has threatened the world economy on multiple fronts.But if anything, it reaffirms that Beijing is continuing to hold more easy policy in general to try and stimulate the local market environment. Trying to prop up domestic demand conditions remain their biggest challenge and will continue to be the case in the years to come still. That ever since the collapse of the property market since the Covid pandemic. This article was written by Justin Low at investinglive.com.

The BOJ policy decision earlier sees USD/JPY drop back from around 159.50 to sit closer to the 159.00 level currently. The central bank opted to maintain the short-term interest rate at 0.75%. However, there were three board members who dissented and wanted to push for a 25 bps rate hike today. The members who dissented were Takata, Tamura, and Nakagawa.The yen moved higher as this looks to be at least a step in the direction towards a rate hike in June, all else being equal. That after the BOJ also upped its inflation forecasts for fiscal year 2026 to 2.8%. That marks a sharp increase from their previous projection in January of 1.9%.As such, it definitely sets the stage for their next move even if they are not quite ready to act upon that today just yet.The relative uncertainty from the Middle East conflict is still weighing and being too hasty in raising interest rates could backfire on the economy. As I mentioned yesterday, major central banks have a very tough balancing act in going about managing policy in the months ahead. The post: Major central banks are up against a very tough task in navigating monetary policy nextThe drop in USD/JPY currently sees price action fall back below the key hourly moving averages. That puts sellers back in near-term control but given the more cautious market mood, it will be tough to see the yen pull stronger gains in general.The uncertainty of the Middle East conflict is still weighing strongly on the currency and the Japanese economy, no thanks to oil prices still being sky high. Sure, the futures market may look calmer but physical prices for oil barrels are at lofty premiums of around $140 to $150. And that is the price that Japan has to pay now while having to balance out another round of releasing their emergency reserves.Unless the situation in the Middle East changes, it will be tough for the yen to get off the floor. And in that lieu, just be wary of the market reaction along the Japanese yield curve.The short-end of the curve is seeing yields push up but the longer-end is seeing yields push down instead. That's a small but subtle signal that the long-end is showing fears of a potential economic bust from over-tightening. This article was written by Justin Low at investinglive.com.

Bank of Japan leaves its short term rate at 0.75%, as expectedBank of England rate decision may spring a split vote surprise, HSBC warnsMorgan Stanley sees dollar risks skewed to downside as energy shock sensitivity fadesIran has 22 days of storage left as naval blockade drives exports to near collapsePBOC sets USD/ CNY reference rate for today at 6.8589 (vs. estimate at 6.8282)Foreign carmakers warn cheap models face U.S. exit without USMCA dealKatayama talks up yen intervention risk (as usual) as crude volatility weighs currencyEaster discounts cool UK shop prices but Iran war inflation threat looms largeJapan March Unemployment rate 2.7% (vs. expected 2.6%, prior 2.6%)Vance said to question Pentagon's war picture as US missile stockpiles face serious strainTrump sceptical of Iran's Hormuz offer as nuclear demands remain the sticking pointWSJ: Trump sceptical on Iran's Hormuz proposal but White House presses on with talksU.S. and Iran closer to deal than it seems as mediators push for Hormuz agreement firstU.S. and Iran closer to deal than thought, with Hormuz access key to any agreementBessent warns global aviation sector: service Iranian airlines and face U.S. sanctionsSummaryTrump is said to be unhappy with Iran's nuclear proposal, with Secretary of State Rubio reiterating that preventing Iran from obtaining a nuclear weapon remains Washington's core demand; no deal, no resumption of war, Hormuz stays shutThe Bank of Japan held rates at 0.75% in a 6-3 vote, with three members pushing for an immediate hike to 1.0%; the BOJ upgraded its inflation outlook sharply and downgraded growth, putting a June hike in play and July looking close to certainJapanese Finance Minister Katayama reiterated round-the-clock readiness to act on yen volatility in coordination with the U.S., though her comments provided little tangible support for the currencyUSD/JPY edged lower after the BOJ decision; the dollar softened modestly across major FX pairsForeign automakers including Nissan, Hyundai and Toyota warned the Trump administration they may pull affordable models from the U.S. market if USMCA is not renewed or is watered downMeta Platforms is preparing to unwind its acquisition of AI startup Manus after Chinese authorities blocked the deal, with founders set to depart and Beijing imposing a deadline of several weeks to reverse the transactionSouth Korea's KOSPI hit a record intraday high, up more than 1.2%, led by automakers and steel stocks, with investor attention turning to major U.S. technology earnings for clues on AI investment and semiconductor demandMarkets ended Tuesday's session with crude futures pushing higher and equity and fixed income futures under pressure, as further reports confirmed that U.S. President Donald Trump is dissatisfied with Iran's latest proposal to end the war.Reuters, citing a U.S. official, reported that Trump does not love the proposal, echoing earlier accounts from the Wall Street Journal and the New York Times. The sticking point is the same one it has been throughout: Iran's offer focuses on reopening the Strait of Hormuz and restoring pre-war conditions without addressing the nuclear programme. Secretary of State Marco Rubio made Washington's position plain, saying that preventing Iran from acquiring a nuclear weapon remains the core concern and that any framework which sidesteps enrichment is insufficient.The background context helps explain why the gap is so wide. Iran's proposal, as characterised by those familiar with its content, would amount to a restoration of its pre-war revenue position, including the potential to levy tolls on Hormuz traffic worth billions of dollars annually, combined with the retention of full enrichment capability. For Washington, accepting those terms would effectively confer on Tehran the status of a fourth major centre of global power. It is little wonder Trump is pushing back. The White House is expected to deliver a counterproposal in the coming days. For now, no deal, no resumption of hostilities, and the Strait of Hormuz remains closed.Away from the war:Ahead of the Bank of Japan's policy statement, Finance Minister Satsuki Katayama reiterated that the government was standing by around the clock and ready to act against foreign exchange volatility in close coordination with the United States. The verbal support offered the yen little traction in practice.The BOJ decision, when it came later, carried more substance than the headline "hold" suggested. The bank kept its short-term rate at 0.75% as expected, but the vote was split 6-3, with Nakagawa, Takata and Tamura all advocating an immediate 25 basis point rise to 1.0%. The dissenting trio cited upward risks to inflation and argued that the conditions for tightening had already arrived. The majority disagreed, pointing to the uncertain growth outlook created by elevated crude oil prices and the Middle East conflict. The BOJ sharply upgraded its inflation forecasts, lifting the fiscal 2026 core CPI projection to 2.8% from 1.9% in January, while trimming its growth outlook. The hawkish tone of the statement, combined with the scale of the dissent, has put a June rate hike firmly in play, with July looking close to a certainty if the data holds. USD/JPY moved modestly lower in the wake of the decision, while the dollar softened slightly across other major pairs.Away from the macro headlines, the Wall Street Journal reported that foreign automakers including Nissan, Hyundai and Toyota have warned the Trump administration they may withdraw their most affordable models from the U.S. market if the USMCA trade agreement is not renewed or is materially weakened. Trump's second-term tariffs have rendered many entry-level models unprofitable, and manufacturers say the uncertainty is also freezing investment decisions on new U.S. manufacturing capacity.In corporate news, Meta Platforms is said to be preparing to unwind its acquisition of AI startup Manus after Chinese authorities moved to block the deal. The Wall Street Journal reported that Manus' founders would leave Meta as part of the reversal, with complex investor payouts and technical integration work complicating the process. Beijing has set a preliminary deadline of several weeks to undo the transaction.On the equity side, South Korea's KOSPI closed at a record intraday high, gaining more than 1.2% on the session, led by strength in automakers and steel manufacturers. Investor attention is turning to major U.S. technology earnings, with results from the sector expected to provide clues on the trajectory of global artificial intelligence investment and its downstream impact on semiconductor demand. This article was written by Eamonn Sheridan at investinglive.com.

Bank of Japan holds rates but sharply upgrades inflation outlook as Iran war bitesThe Bank of Japan left its short-term policy rate unchanged at 0.75% on Tuesday, as widely expected, but delivered a significantly more hawkish inflation outlook alongside the decision, sharply revising up its price forecasts while acknowledging that the Iran war and elevated crude oil prices are clouding Japan's growth trajectory.The voteThe decision to hold was not unanimous. Three board members, Nakagawa, Takata and Tamura, proposed raising the short-term rate target to 1.0% from 0.75%, a move that was turned down by a majority vote. The dissent is notable in its scale: three members pushing for a hike simultaneously, even against the backdrop of war-driven economic uncertainty, signals that the hawkish minority on the board is growing more vocal and more willing to act.Takata, in justifying his proposal, said the BOJ's price stability target had been more or less achieved and that inflation risks in Japan were already skewed to the upside, driven by second-round effects from overseas price pressures feeding into domestic costs. Nakagawa made a similar argument, saying that even with the Middle East situation remaining unclear, economic developments and accommodative financial conditions meant risks to prices were tilted upward.The inflation forecastsThe quarterly outlook report contained the most striking numbers in the statement. The board's median forecast for core consumer price inflation in fiscal 2026 was revised to 2.8%, a dramatic jump from the 1.9% projected in January. The fiscal 2027 forecast was lifted to 2.3% from 2.0%, and the board offered its first projection for fiscal 2028, pencilling in inflation at 2.0%, precisely at target.The BOJ said underlying inflation is likely to be at a level broadly consistent with its 2% target in the second half of fiscal 2026 and through fiscal 2027, a statement that, taken at face value, implies the conditions for further rate hikes are approaching even if the board is not yet ready to act on them.The primary driver of the upward revision is crude oil. The board said the rise in crude oil prices reflecting the impact of the Middle East situation is expected to push down corporate profits and households' real income, while simultaneously pushing the year-on-year rate of CPI increase for fiscal 2026 significantly higher. The BOJ also flagged the risk that higher crude prices are being passed on to goods and services more easily than in the past, a second-round inflation concern that the three dissenting members clearly weighed heavily in their hike proposals.The growth pictureOn growth, the BOJ's tone was considerably more cautious. Japan's economic growth is likely to decelerate in fiscal 2026, the bank said, with higher crude oil prices squeezing corporate profits and eroding households' real income through a deterioration in the terms of trade. Private consumption is expected to be broadly flat.The BOJ was careful to note mitigating factors. Government fuel oil subsidies and other fiscal support measures are expected to underpin the economy, and accommodative financial conditions will provide additional support. The bank projected that growth would recover moderately from fiscal 2027 onwards as the adverse effects of high crude prices are expected to wane. The overall assessment, however, was that risks to the economic outlook are skewed to the downside while risks to inflation are skewed to the upside, a classic stagflationary framing that makes the BOJ's policy path unusually difficult to navigate.The policy signalThe BOJ said it will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving its 2% inflation target, standard language that preserves maximum flexibility. The bank stressed the need to pay particular attention to the impact of the Middle East situation on financial and foreign exchange markets, and warned that if crude oil prices remain elevated for longer than expected, the economy could slow further through a significant decline in corporate profits and household real income.Equally, the board said it must pay due attention to preventing the risk of inflation deviating significantly upward from its projections, a formulation that keeps the door open to further tightening even in the current uncertain environment.Real interest rates remain at significantly low levels by the BOJ's own assessment, a statement that implicitly acknowledges the case for further normalisation has not gone away, regardless of the external headwinds.The takeawayTuesday's decision is best read not as a pause in the tightening cycle but as a holding pattern imposed by circumstances. The inflation forecasts have been revised sharply higher, three members voted to hike immediately, and the bank's own language acknowledges that price risks are tilted upward. What is holding the majority back is the growth uncertainty created by the Iran war and its impact on Japanese households and businesses through elevated energy costs.The question for markets is how long that uncertainty can justify inaction when inflation is running well above target and a significant minority of the board believes conditions for a hike already exist. Governor Ueda's press conference later today will be closely watched for any shift in tone that brings the next rate hike closer into view. The next meeting is June, and then July:---The yen jumped on the decision, thought its not a big move: This article was written by Eamonn Sheridan at investinglive.com.

HSBC warns the Bank of England's Thursday rate decision could deliver a hawkish split vote, with some members potentially voting for a rise, though sterling upside looks limited with 60bps already priced. SummaryHSBC analysts say the Bank of England's Thursday rate decision could produce a split vote, with some members potentially voting to raise rates rather than holdThe market consensus is positioned for a unanimous 9-0 vote to keep rates steady, making any dissent a hawkish surpriseSterling's capacity to benefit from such an outcome looks limited, with the market already pricing roughly 60 basis points of tightening by year-endThe possibility of a hawkish dissent reflects concern among some committee members about inflation risks, particularly as the Iran war threatens to drive energy and import costs higherThursday's Bank of England interest rate decision could deliver a hawkish surprise, with analysts at HSBC warning that the vote may not be the clean 9-0 hold that markets are broadly expecting.In a note to clients, the bank flagged the possibility that one or more members of the Monetary Policy Committee could break ranks and vote for an outright rate rise, a development that would run counter to the dominant expectation of a unanimous decision to leave rates unchanged.The dissent, if it materialises, would reflect growing discomfort among some committee members about the inflation outlook, particularly as the Iran war continues to put upward pressure on energy and import costs. The BOE has been monitoring closely the extent to which businesses are passing on higher costs to consumers, a transmission mechanism that Governor Andrew Bailey has previously suggested remains contained relative to the 2022 inflation surge, when prices topped 11%.Despite the potential for a split decision, HSBC's analysts are cautious about reading too much into sterling's prospects. The pound's ability to benefit from a hawkish surprise is seen as limited, given that the market is already pricing in a substantial degree of policy tightening, approximately 60 basis points by year-end. With that much tightening already in the price, a dissenting vote or two would confirm rather than dramatically shift the market's existing trajectory.The more meaningful signal from any split would be what it implies about the committee's tolerance for allowing war-driven inflation to persist without a policy response. A hawkish minority would keep pressure on the majority to act sooner rather than later if price data continues to deteriorate.BOE due on Thursday this week, 30 April:---A split vote would be a modest hawkish surprise relative to market consensus, which has been positioned for a clean 9-0 hold. However, HSBC's analysts note that sterling's ability to benefit is constrained by the degree of tightening already priced in, with around 60 basis points of hikes expected by year-end. That leaves little room for an upside repricing in the pound even if one or two members break ranks in favour of a rise. The more significant market read would be what a dissenting vote signals about the committee's tolerance for Iran war-driven inflation feeding into domestic prices, a dynamic the BOE has been watching carefully. If the split materialises, it would reinforce the hawkish undertone in UK rates markets without necessarily moving sterling materially. This article was written by Eamonn Sheridan at investinglive.com.

Morgan Stanley says dollar risks are increasingly skewed to the downside as FX markets grow less sensitive to energy war headlines, though refined product shortages remain a key upside risk for the currency. SummaryMorgan Stanley analysts say risks for the dollar are increasingly skewed to the downside, with FX markets becoming less sensitive to energy supply disruption headlines from the warInvestors are shifting focus to longer-term themes, with Morgan Stanley saying there is broad agreement that the dollar has scope to trade at a deeper discount to rate differentialsThe bank is nonetheless cautious about turning outright negative on the dollar, warning that markets may be underestimating the risk of refined energy product shortagesSuch shortages could weaken economic data expectations and trigger risk aversion, both of which would traditionally support dollar demandMorgan Stanley has flagged a meaningful shift in foreign exchange market dynamics, warning that risks for the dollar are increasingly tilted to the downside as investors grow less reactive to energy supply disruption headlines and turn their attention to longer-term structural themes.In a note to clients, the bank's analysts said FX markets are displaying a diminishing sensitivity to news flow around the war's impact on energy supply, a notable development given the scale of disruption to Strait of Hormuz traffic and Iranian crude exports in recent weeks. Rather than trading on each new headline, investors appear to be stepping back and focusing on where the dollar should be trading relative to interest rate differentials over a longer horizon.Morgan Stanley said it believes investors broadly share its view that there is meaningful scope for the dollar to trade at a deeper discount to those rate differentials, a framing that implies the currency has further to fall from current levels once the noise of day-to-day war headlines recedes.The bank is not yet ready to turn outright negative on the dollar, however. Its key concern is that markets may be underestimating the risk of refined energy product shortages, a second-order consequence of the Hormuz disruption that has attracted less attention than the headline moves in crude benchmarks. A shortage of gasoline, diesel or jet fuel would feed directly into weaker economic data and could trigger a wave of risk aversion that historically supports dollar demand.The tension Morgan Stanley identifies is therefore between a structural case for dollar weakness building in the background and a tactical risk that an underappreciated refined products crunch forces investors back toward safe-haven positioning. Until that uncertainty resolves, a fully committed negative dollar call remains premature in the bank's view.---Bearish framing for the dollar, though Morgan Stanley stops short of a full negative call. The key insight is the shift in FX market behaviour: investors are increasingly looking through energy supply disruption headlines and focusing on structural dollar weakness relative to rate differentials, a dynamic that suggests the greenback's traditional safe-haven bid during geopolitical stress is eroding. The caveat is significant for energy markets specifically: Morgan Stanley warns that investors may be underestimating the risk of refined product shortages, which could yet trigger a fresh wave of risk aversion and dollar demand.Morgan Stanley says dollar risks are increasingly skewed to the downside as FX markets grow less sensitive to energy war headlines, though refined product shortages remain a key upside risk for the currency. For oil markets the refined products angle is worth watching closely, as shortages in gasoline, diesel or jet fuel would represent a second-order consequence of the Hormuz disruption that has so far received less attention than crude benchmarks. This article was written by Eamonn Sheridan at investinglive.com.

Iran has just 12 to 22 days of unused crude storage remaining, with exports down 70% under the U.S. naval blockade and a further 1.5 million bpd output cut possible by mid-May, Kpler says.Bloomberg (gated) carry the report. SummaryIran has just 12 to 22 days of unused crude storage capacity remaining, according to research firm Kpler, raising the prospect of forced production cuts of a further 1.5 million barrels per day by mid-MayIranian crude exports have fallen to around 567,000 barrels a day from an average of 1.85 million barrels a day in March, a drop of roughly 70% since the U.S. naval blockade of Iranian ports took hold in early AprilIran has already curtailed up to 2.5 million barrels of daily crude production, with neighbouring producers including Saudi Arabia, Iraq, Kuwait and the UAE also forced to reduce output since conflict erupted on February 28Kpler said no tankers have been observed successfully evading the U.S. naval blockade around the Strait of HormuzDespite the supply collapse, Tehran is unlikely to feel the full financial impact for another three to four months, given the time required for cargoes to reach Chinese ports and for buyers to settle paymentsIran is running critically short of crude storage capacity, with research firm Kpler warning the country has just 12 to 22 days of unused space remaining before it is forced to cut production further, potentially by as much as 1.5 million barrels per day by mid-May.The storage crisis is a direct consequence of the U.S. naval blockade imposed on Iranian ports in early April. Exports have collapsed from an average of 1.85 million barrels a day in March to around 567,000 barrels a day, a fall of roughly 70%. Kpler said it has not observed a single tanker successfully evading the blockade in waters around the Strait of Hormuz, suggesting the enforcement operation is proving highly effective.Iran has already absorbed significant production losses. Goldman Sachs estimated last week that the country has curtailed as much as 2.5 million barrels of daily output since the conflict began on February 28. A further forced cut of 1.5 million barrels per day would represent a devastating additional blow to what was once OPEC's second-largest source of supply. The wider regional impact is also significant, with Saudi Arabia, Iraq, Kuwait and the UAE all having reduced output since hostilities erupted.The financial pain for Tehran, however, will take time to arrive. Iranian crude cargoes typically take around two months to reach Chinese ports, the primary destination for the regime's oil, and buyers have a further two months to settle payments. Kpler estimates the revenue impact will not be fully felt for another three to four months, a lag that gives Tehran some near-term financial breathing room even as its physical oil infrastructure comes under acute pressure.That buffer may also complicate the diplomacy. With Iran not yet facing an immediate cash crisis, the urgency to reach a deal on the Strait of Hormuz may be lower than the supply data alone would suggest. ---The combination of a collapsing Iranian export volume, rapidly exhausting storage capacity and the prospect of a further 1.5 million barrel per day production cut by mid-May removes meaningful supply from an already disrupted global market. Iran has already curtailed up to 2.5 million barrels per day according to Goldman Sachs, and neighbouring Gulf producers have also been forced to reduce output since hostilities began. The effective closure of the Strait of Hormuz is compounding the supply shock. The three to four month lag before Iran's oil revenues feel the full impact suggests Tehran retains some financial buffer in the near term, which may complicate diplomacy by reducing the immediate pressure on the regime to reach a deal. 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.Injects 43.5bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%. This article was written by Eamonn Sheridan at investinglive.com.

Foreign automakers including Nissan, Hyundai and Toyota have warned the Trump administration they may pull affordable models from the U.S. market if USMCA is not renewed or is significantly weakened.Wall Street Journal (gated) reporting. SummaryForeign automakers including Nissan, Hyundai and Toyota have privately warned the Trump administration they may withdraw their most affordable models from the U.S. market if the USMCA is not renewed or is materially weakenedTrump's second-term automotive tariffs charge 25% on the non-U.S. content of vehicles that previously qualified as duty-free under the agreement, making entry-level models unprofitable for many manufacturersEight of the ten cheapest new car models in the U.S. are made by foreign-based automakers, with options such as the Nissan Sentra at $22,600 and the Hyundai Venue at $20,550 among the most accessible for consumersNissan Americas chairman Christian Meunier said tariffs have been killing affordable cars, while Toyota said it is wary of committing to major U.S. factory investment until a trade settlement is reachedThe White House said automakers wanting to sell to American drivers need to come to terms with the need to reshore manufacturing, and pointed to deregulation and tax cuts as support for that transitionThe administration has not committed to tariff-free treatment for automobiles in any revised USMCA, and U.S. Trade Representative Greer has told Mexican officials some level of tariffs are likely to persistCanada and Mexico have both signalled they require automotive tariff relief as a condition of USMCA renewal, with Mexico's economy chief saying the country is focused on reducing rather than eliminating proposed leviesForeign automakers have delivered a stark warning to the Trump administration: without a credible renewal of the U.S.-Mexico-Canada Agreement, some of the most affordable new cars available to American consumers may be withdrawn from the market entirely.Companies including Nissan, Hyundai and Toyota have communicated this position directly to Trump's economic advisers, according to people familiar with the discussions. The message reflects a growing calculation among foreign manufacturers that Trump's second-term tariff regime has made entry-level models financially unviable, and that without a trade framework that reduces duties on North American-built vehicles and parts, the economics of producing and selling cheap cars in the U.S. simply do not add up.At the heart of the problem is a 25% tariff on the non-U.S. content of vehicles that previously would have entered duty-free under the USMCA. Trump signed that agreement in 2020, providing tariff-free treatment to cars built largely with parts from the U.S., Mexico or Canada. His second-term levies have cut across those supply chains, and while some limited relief has been offered, manufacturers say their tariff bills continue to mount.The consequences for consumers would be tangible. Eight of the ten cheapest new car models sold in the U.S. come from foreign-based manufacturers. The Mexico-built Nissan Sentra starts at $22,600 and the Hyundai Venue, imported from South Korea, at $20,550. Detroit's major automakers largely abandoned the small car segment years ago in favour of SUVs and trucks, leaving foreign brands as the primary source of affordable options for buyers priced out of a market where the average new car now costs around $50,000.Nissan Americas chairman Christian Meunier said tariffs have been killing affordable cars and described a USMCA deal as necessary to ease the pain. Toyota said it has been accumulating losses in North America since tariffs took effect and is reluctant to commit to major new U.S. factory investment until a trade settlement provides clearer ground. U.S. sales chief David Christ put it plainly, saying it is difficult to commit two or three billion dollars to new facilities without some form of resolution, and described USMCA renewal as the next big milestone for the industry.Honda took a slightly different position, saying it would continue selling the Civic in the U.S. even without a trade deal, but acknowledged the economics of doing so would become considerably more difficult without the stability of North American free trade.The White House response has been consistent: automakers that want access to American consumers need to accelerate the shift of manufacturing back to the United States. Spokesman Kush Desai pointed to deregulation, tax cuts and pro-investment policies as the administration's offer to companies prepared to make that commitment. What the administration has not offered is any guarantee of tariff-free treatment for automobiles in a revised USMCA, and Trade Representative Jamieson Greer has told Mexican officials directly that some level of tariffs is likely to remain in any renewed agreement.That position puts Washington at odds with both its USMCA partners. Canada has said automotive tariff relief is a condition of renewal. Mexico has struck a more pragmatic tone, with its economy minister saying the country should not be nostalgic for a no-tariff era but is focused on minimising whatever levies the U.S. seeks to impose. Neither position suggests a swift resolution, leaving foreign carmakers in a prolonged state of uncertainty that is already shaping their investment and product decisions in the world's largest car market.And we all thought this was the worst we'd get. Dummies. ---Bearish for foreign automakers with significant North American affordable model exposure, particularly Nissan, Hyundai and Toyota. The 25% tariff on non-U.S. vehicle content has already rendered many entry-level models unprofitable, and the absence of USMCA clarity is freezing capital investment decisions across the sector. Toyota's explicit reluctance to commit billions to new U.S. facilities until a trade settlement emerges illustrates how the uncertainty is suppressing the very reshoring the administration says it wants. The political dimension is equally significant: the departure of affordable models from the U.S. market would directly contradict the administration's cost-of-living narrative ahead of any future electoral cycle, creating a tension that may ultimately force some form of tariff relief. Near term, automaker margins remain under pressure and supply chain restructuring costs continue to mount. This article was written by Eamonn Sheridan at investinglive.com.