The week was driven by two competing forces: tentative signs of de‑escalation in the US‑Iran conflict and a much stronger‑than‑expected US March jobs report, which together triggered a relief rally across risk assets. At the same time, Fed Chair Powell urged patience on rates and markets moved from pricing two cuts in 2026 before the conflict to pricing no cuts for the rest of the year, as oil‑driven inflation risks stayed elevated.
The US dollar remained firm overall, but FX moves were notably choppy as ceasefire headlines and shifting Fed expectations pulled in opposite directions.
USD/JPY opened the week above 160, dropped below 159 on ceasefire talk and Japanese intervention warnings, then rebounded back through 159 after Trump’s speech, leaving the pair still close to levels that traders view as sensitive for Tokyo.
Broadly, G10 weekly moves stayed contained within roughly 1%, with higher‑beta currencies finding some support during the relief rally while haven demand eased only temporarily.
Oil remained the key macro barometer. Prices dropped sharply on hopes of de‑escalation, but stayed historically elevated after March’s surge, with Brent still reflecting supply fears tied to the Strait of Hormuz and the broader Middle East energy complex.
Gold and silver stabilised after their recent pull‑back, while grains remained firm as conflict‑related disruption and higher energy costs continued to ripple through food and transport markets.
The broader Bloomberg Commodity Index had already risen 24.4% in the first quarter, underlining how strongly commodities have repriced the geopolitical shock.
Global equities staged a broad rebound and snapped a five‑week losing streak. The S&P 500 rose 3.38% on the week, the Russell 2000 gained 3.34%, MSCI EAFE advanced 3.04%, and MSCI All Country World climbed 2.95% as of 3 April.
Even so, investors remained cautious, with several commentators stressing that volatility has not fully cleared and that equity markets still need to stabilise further before declaring the correction over.
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