US shares rise, dollar steadies
US equities rallied to new all-time highs, with the S&P 500 gaining 1.15% and the Nasdaq rising 1.6%, fueled by strong corporate earnings and indications from the US President regarding a potential extension of the cease-fire with Iran.
Despite the equity rally, US Treasuries sold off by 1-2 basis points as the ongoing standoff for control of the Strait of Hormuz cast doubts on a lasting resolution to the Iran conflict.
Energy prices remained elevated, with front-month Brent crude holding above $101 per barrel following stalled peace negotiations and the seizure of two ships in the Strait of Hormuz.
In Europe, both equities and bonds declined as prospects for a Middle East peace deal remained uncertain , while Germany halved its growth forecast for this year to 0.5% due to the energy price spike triggered by the war.
UK gilts opened higher after March inflation climbed to 3.3%, driven by surging energy costs , though expectations suggest the central bank will maintain a wait-and-see approach at its next meeting.
Asian markets showed divergence; Japan’s Nikkei and South Korea’s Kospi ended at record highs , while Bank Indonesia kept its policy rate at 4.75% but adopted noticeably hawkish rhetoric to defend an undervalued rupiah. In FX, the dollar hovered near 98.59. Overnight, AUD/USD gained 0.11%, USD/SGD rose 0.10%, and USD/CNH was flat.
Europe stays patient
European Central Bank official Mārtiņš Kazāks told the Financial Times the bank feels no rush to raise interest rates above 2%, even with ongoing tension in the Middle East. He explained that people do not expect prices to surge, and higher energy costs have not significantly affected the broader economy. Oil prices have dropped from their recent peak, and European gas costs much less than it did in 2022. However, Kazāks promised the bank will act if the situation changes.
AUD/EUR, however is at one‑month high.
Looking at high beta FX, the AUDUSD now sits roughly 0.9% below its recent peak near 0.7222, last seen on April 17.
On the downside, initial support comes in near the 21‑day EMA at 0.7085, followed by the 50‑day EMA around 0.7026.
White House pushes back on Iran ceasefire talk
White House Press Secretary Karoline Leavitt told Fox News that rumors of President Trump extending the ceasefire by three to five days are false. Trump has not set a strict deadline for Iran to present a unified proposal. Leavitt also pointed out that Iran sends different messages publicly than it does privately.
We noted that FX volatility had eased recently. In Asia, USD/SGD is now 1.5% from its recent low of 1.2586, last seen on 28 January. The next key resistance sits at the 100-day EMA of 1.2795.
USD buyers may look to take advantage now.
Antipodeans slightly higher overnight
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 25 April
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
