Asian Markets Pause as US-Iran Ceasefire Optimism Fades

Asian markets traded cautiously as US-Iran ceasefire optimism faded, with oil prices and Fed policy shaping global currency and commodity outlook.

Asia Session: Cautious Trade Replaces Early Optimism

Asian markets opened Thursday on a hesitant footing as the initial wave of optimism from the US–Iran two-week ceasefire began to lose momentum. Consequently, investors shifted their focus back to the structural risk that the Strait of Hormuz could once again become a pressure point for oil supply disruptions.

Oil prices pulled back from their most recent peaks but held well above pre-crisis levels. As a result, energy-related equities found support while import-dependent Asian economies continued to absorb elevated input-cost pressures, a dynamic that traders and policymakers across the region are watching closely.

Europe and US Sessions: Risk Sentiment Under Pressure

Thursday’s European and US trading sessions are therefore likely to be defined by a broader recalibration of risk-on positioning. The large ceasefire-driven rally has begun to unwind, and stocks and bonds are now adjusting as Tehran signals a more cautious view of the agreement.

Meanwhile, oil remains supported by lingering supply-risk concerns, which continue to underpin energy names globally. Traders must, moreover, keep a close eye on key US and European macro releases, particularly inflation figures, activity data, and Federal Reserve speaker commentary, since these data points will either reinforce or challenge the current narrative of a less hawkish Fed.

Asian Markets Pause as US-Iran Ceasefire Optimism Fades

Dollar Index (DXY)

Key Data Events Today (all at 12:30 pm GMT): Core PCE Price Index m/m | Final GDP q/q | Final GDP Price Index q/q | Unemployment Claims

The dollar is currently trading near 99.1 on the DXY, pausing after a notable run higher into early April. Markets are simultaneously digesting the fragile US–Iran ceasefire, elevated oil prices, and sticky inflation expectations that point toward an extended Federal Reserve rate-hold period.

The greenback remains broadly firm against major currencies, supported by its safe-haven appeal and relatively high US yields. However, traders are cautious: any rapid de-escalation in the Gulf conflict or a renewed shift toward Fed rate-cut pricing could cap further dollar upside.

Central Bank Outlook — Federal Reserve:

The Federal Open Market Committee (FOMC) widely expects to hold the federal funds rate steady at 3.50%–3.75% at its March 17–18, 2026 meeting. Rising oil prices tied to the US-Israel conflict against Iran and persistent inflation pressures have accordingly delayed any 2026 rate cuts, with September now appearing as the earliest realistic window.

The labor market has weakened further, with nonfarm payrolls declining by 92,000 in February 2026 and the unemployment rate rising to 4.4%. At the same time, CPI held steady at 2.4% year-over-year in February, headline PCE registered 2.8% in January, and core PCE rose to 3.1% — all above the Fed’s 2% target. Economic growth has cooled from Q4 2025’s robust near-5% pace, with the Atlanta Fed GDPNow now estimating Q1 2026 growth at approximately 2.1%–2.7%.

The Committee maintains its data-dependent stance. Quantitative tightening continues with Treasury rolloff caps at $5 billion per month and agency MBS at $35 billion per month. The next FOMC meeting is April 28–29, 2026.

24-Hour Bias: Medium Bearish

Gold (XAU)

Key Data Events Today (all at 12:30 pm GMT): Core PCE Price Index m/m | Final GDP q/q | Final GDP Price Index q/q | Unemployment Claims

Gold prices are sitting in the mid-$4,700s per ounce following a sharp correction from January’s record highs near $5,600/oz. Although the metal remains up roughly 52% year-on-year, it has fallen approximately 8–9% over the past month. Dollar strength, higher-for-longer rate expectations, and technical profit-taking have collectively driven the pullback.

24-Hour Bias: Weak Bearish

Euro (EUR)

Key Data Events Today: No major scheduled releases

The euro is trading in a consolidative, range-bound environment on Thursday, with EUR/USD hovering in the 1.14–1.1650 zone. Recent volatility stemming from higher US-dollar-denominated interest rates and geopolitical risk sentiment has kept the pair contained.

Central Bank Outlook — European Central Bank:

The ECB’s Governing Council widely expects to keep its three key rates unchanged at the April 29–30, 2026 meeting — the main refinancing rate at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. Around 58% market probability currently prices in no change, though some banks have begun pricing potential hikes given rising inflation risks tied to Middle East energy costs.

Headline HICP inflation is tracking around 2.0–2.2% in early 2026, driven by energy price pressures that are partially offsetting euro strength. Core inflation remains sticky but is moderating gradually, with projections revised upward to 2.6% for full-year 2026. Euro area GDP growth remains modest at approximately 0.2–0.3% quarter-on-quarter, supported by defense spending, infrastructure investment, and low unemployment near 6.4%. The next ECB meeting is on April 29, 2026.

24-Hour Bias: Medium Bearish

Swiss Franc (CHF)

Key Data Events Today: No major scheduled releases

The Swiss franc is trading in a relatively narrow band versus both the dollar and the euro. Modest recent pullbacks have not disrupted the franc’s broader positive yearly trend, which remains underpinned by the Swiss National Bank’s inflation-focused policy and the currency’s safe-haven appeal amid global uncertainty.

Notably, Thursday also brings a significant development in Swiss monetary innovation: six major Swiss banks have launched a sandbox to test a Swiss-franc-pegged stablecoin and blockchain-based applications of the digital franc.

Central Bank Outlook — Swiss National Bank:

At its March 19, 2026, monetary policy assessment, the SNB widely expects to hold the policy rate unchanged at 0%, extending the pause in place since September 2025. Headline CPI has hovered near 0% year-on-year through early 2026, with core measures subdued at approximately 0.4%, underscoring limited price pressures and contained deflation risks. So, the SNB’s conditional inflation forecast projects averages of approximately 0.2% in 2025, 0.3% in 2026, and 0.6% in 2027. The next SNB meeting is June 18, 2026.

24-Hour Bias: Medium Bullish

British Pound (GBP)

Key Data Events Today: No major scheduled releases

The British pound is trading on a modestly stronger footing on Thursday, with GBP/USD around the mid-1.330s following a robust rebound over the prior 24 hours. Also, the pair heads toward its largest one-day gain in approximately three weeks, supported by the US–Iran ceasefire reducing safe-haven demand for the dollar.

Central Bank Outlook — Bank of England:

The Bank of England’s MPC voted unanimously at its March 19, 2026, meeting to maintain the Bank Rate at 3.75% — a sharp reversal from earlier market expectations of a 25-basis-point cut. The Middle East conflict and its resulting global energy price surge drove the change in tone. Headline CPI inflation faces near-term upside pressure from the energy shock, with analysts now projecting inflation of 3–4% by end-2026. Meanwhile, UK growth has softened further into Q2 2026, with unemployment risks rising. The MPC has consequently adopted a wait-and-see posture, with Governor Bailey emphasizing close monitoring without committing to a specific rate path. The next BoE meeting is on April 30, 2026.

24-Hour Bias: Weak Bearish

Canadian Dollar (CAD)

Key Data Events Today: No major scheduled releases

The Canadian dollar is trading in a relatively narrow range on Thursday, lingering around the mid-1.3800s versus the US dollar. The loonie finds itself caught between elevated oil prices — supportive for Canada’s terms of trade — and a still-strong US dollar driven by elevated US yields and tight monetary policy expectations.

Central Bank Outlook — Bank of Canada:

The Bank of Canada’s Governing Council held the overnight rate steady at 2.25% at its March 25, 2026, meeting, citing balanced risks amid persistent global uncertainties from Middle East conflicts and US trade policies. Furthermore, economic growth carried into Q1 2026 at an annualized pace of around 2.2%, supported by resource exports, government outlays, and a manufacturing rebound. Headline CPI has eased to approximately 2.1% year-over-year in February 2026, staying within the control band. Policymakers reiterated that 2.25% remains well-calibrated to anchor the 2% inflation target, with no cuts signaled barring downside surprises. The next BoC meeting is on April 23, 2026.

24-Hour Bias: Weak Bearish

Oil: Brent and WTI Climb Back Toward Mid-$90s

Key Data Events Today: No major scheduled releases

Oil prices are higher on Thursday, as Brent and WTI climb back toward the mid-$90s following Wednesday’s steep sell-off. The recovery is driven by renewed nervousness over the Strait of Hormuz and growing doubts about how durable the US–Iran two-week ceasefire will prove. Moreover, markets remain sensitive to Middle East supply disruption risk, and crude continues to trade well above pre-conflict levels. The ceasefire has opened a narrow window for shipping and diplomacy, but traders are not yet confident it will hold.

24-Hour Bias: Medium Bullish

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