Market Wrap – From 28th April to 04th May 2026

The week was dominated by central banks and crude: the Fed’s 29 April decision and guidance set the tone for dollar and risk assets, while the Middle East energy shock and Hormuz blockade kept oil near cycle highs and stoked inflation worries going into May. Markets came into the FOMC cautious but not panicked, weighing resilient US data and elevated energy prices against the risk that the Fed, ECB, BoJ and BoE might lean more hawkish to re-anchor inflation expectations. 

FX Market Reactions 

FX stayed macro and central bank driven rather than data driven for most of the week, with rate differentials and positioning doing more work than scheduled releases. Ahead of, and immediately after, the FOMC, traders focused on the dollar’s reaction to Powell’s final meeting as Chair and on whether guidance would validate the current 3.50–3.75% Fed funds range for longer or open the door to cuts later in 2026. 

USD started the week slightly softer as reports of a fresh Iranian ceasefire proposal and talk of extending the truce took some safe haven premium out of the currency. 

USD/JPY consolidated just below the 160 handle (around 159.4), with BoJ policy on 28 April and the threat of FX intervention keeping topside moves in check even as rate differentials remained yen negative. 

Cross JPY trades like GBP/JPY stayed bid on carry and risk appetite, with GBP/JPY quoted around 216 and up roughly 0.5% on the session into 28 April according to FX macro recaps. 

Overall, G10 currencies stayed in range trading mode, with traders preferring to fade extremes around central bank headlines rather than chase breakouts. 

Commodities Market Reactions

Commodities continued to trade the “energy led inflation cycle” theme that has defined 2026 so far. The World Bank’s latest update showed its energy price index jumping 12.1% in April, driven mainly by an 8.7% rise in crude, while non energy commodities also climbed, signalling that the shock is broadening beyond oil. 

Crude held near its highest levels since the Russia and Ukraine conflict, underpinned by the ongoing Middle East war, disrupted Hormuz flows and a tight inventory backdrop. 

Analysts increasingly framed April as the point where an oil shock morphed into a wider commodity inflation cycle, with grains, vegetable oils and some base metals catching the bid from higher energy, transport and fertiliser costs. 

Agricultural markets saw strong momentum: soy oil and canola notched fresh contract highs, while corn and wheat ground higher, with commentators noting that money flow and macro hedging demand were now as important as crop fundamentals. 

For traders, that meant long energy and broad commodities baskets remained crowded but still in control, with pullbacks treated more as tactical dips than trend reversals. 

Indices Market Reactions 

Equity indices spent the week balancing record high US tech against rising input costs and higher discount rates. On Monday 27 April, the S&P 500 and Nasdaq closed at new record highs, underlining how powerful the AI and mega cap tech bid remains even as macro risks multiply. 

US benchmarks stayed near the top of the range into the Fed, with traders rotating within sectors (towards quality tech and away from more rate sensitive names) rather than exiting risk wholesale. 

European equities lagged as energy intensive sectors struggled with higher power and feedstock costs, and as investors looked ahead to the ECB’s inflation messaging later in the week. 

Globally, commodity linked markets and resource heavy indices benefited from the broadening rally in oil, metals and agriculture, reinforcing the divergence between energy/commodity winners and import heavy laggards. 

Index volatility stayed event driven, with intraday swings clustering around central bank headlines, oil moves and large cap earnings rather than around second tier data. 

Get ready for the week ahead    

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