ING’s Frantisek Taborsky expects a risk-off tone in CEE markets as higher Oil prices and geopolitical tensions test already elevated central bank hike pricing.
Gold (XAU/USD) struggles to gain traction on Monday, trimming part of its earlier gains as escalating tensions in the Middle East and shifting interest rate expectations keep markets volatile.
The British Pound (GBP) collapses on Monday as Middle East escalations push the US Dollar (USD) higher, while Oil prices extend their gains for the fourth consecutive trading day. At the time of writing, the GBP/USD trades at 1.3184, down by more than 0.50%, hitting a four-month low.
USD/JPY retreats on Monday and trades around 159.60 at the time of writing, down 0.44% on the day, after reaching a nearly 20-month high above 160.00 earlier in the day. The move lower follows renewed warnings from Japanese authorities about potential intervention in the foreign exchange market.
EUR/USD extends its losses on Monday, slipping back below the 1.1500 psychological mark as a broadly stronger US Dollar (USD) keeps the Euro (EUR) under pressure. At the time of writing, the pair trades near 1.1444, remaining on the back foot for a fifth consecutive day.
Societe Generale economists expect Euro area headline inflation to rise sharply in March, driven by higher energy costs, while core inflation eases slightly.
National Bank of Canada’s (NBC) Angelo Katsoras outlines how an Iran conflict could severely disrupt Oil and gas markets if key energy infrastructure and the Strait of Hormuz are targeted.
Scotiabank strategists Shaun Osborne and Eric Theoret report that the Japanese Yen opened very weak, with USD/JPY spiking near 160.50 before stabilizing after fresh warnings of potential “bold action” from Japan’s Vice Finance Minister Mimura.
Federal Reserve (Fed) Chairman Jerome Powell said on Monday that there is tension between the Fed's two objectives, during a moderated discussion at the Harvard University Principles of Economics Class in Cambridge, per Reuters.
Stephen Miran, a member of the Federal Reserve (Fed), said that inflation expectations have not been affected yet by higher Oil prices. He told CNBC on Monday that he is still concerned about the labor market, even though the Fed can accommodate that.
BNP Paribas analysts expect the US economy to grow above potential in 2026, with GDP at 2.7% and inflation at 3.1%, keeping the Federal Reserve on hold with the Fed Funds target range at 3.5%-3.75%.
United States Dallas Fed Manufacturing Business Index declined to -0.2 in March from previous 0.2
