There have been three developments to note. First, President Trump’s trip to China has been postponed by at least a month. The White House linked it to the war efforts, but earlier reports claimed Chinese officials were disappointed with the lack of progress in the preparatory efforts. The US administration also appeared to warn the meeting could be at risk if Beijing did not help open the Strait of Hormuz. That said, reports suggest Iranian oil shipments are still making their way to China. Second, the Reserve Bank of Australia hiked its policy rate for the second time this year. The decision was close, and although the initially dipped on the news, it recovered to approach $0.7100. Third, Beijing announced it would tighten cuts on fertilizer (nitrogen-potassium) and reiterated the existing restrictions on the export of urea.
and oil are trading firmly within yesterday’s ranges. The is mostly softer, with only the and among the G10 failing to find traction. Equities in Asia Pacific and Europe are firmer, but the advance may be challenged in North America today. European 10-year benchmark yields are softer, but the US yield is slightly firmer.
Prices
G10
• The stabilized yesterday but was unable to take out the pre-weekend high (~$1.1530), although it posted its largest gain in more than a month (~0.90%). It snapped a four-day slide. It was initially sold today and fell to almost $1.1465 by late Asia Pacific activity but recovered to $1.1525 in Europe. It must overcome resistance in the $1.1525-50 area to lift the tone. Options for 1.6 bln euros at $1.1500 expire today.
• The dollar stalled before the weekend and again yesterday, near JPY159.75. We suggest the JPY160 level is of greater psychological importance than a redline for Japanese officials. Yesterday’s session low was recorded in North America, around JPY158.85, perhaps encouraged by the pullback in US rates. Still, the greenback settled firmly near JPY159.40. It is consolidating in a JPY159.00-50 range today. The market has not given up on JPY160 but may need fundamental cover to overcome the hurdle.
• Like the euro, advanced yesterday after the pre-weekend sell-off to new lows for the year (~$1.3220) and recovered to $1.3340. It was unable to push above last Friday’s high (~$1.3370). Still, it snapped a four-session downdraft and posted its largest gain (~0.75%) since the end of January. It was initially sold to about $1.3275 today but has recovered to yesterday’s high. The $1.3340-50 area blocks move toward $1.3400-30.
• The US dollar settled at its best level against the Canadian dollar since January 22 before the weekend. But, yesterday, it pared the gains and returned to almost CAD1.3650. It has been largely sidelined so far today, trading in a narrow CAD1.3680-CAD1.3700 range. It may be confined to yesterday’s range (~CAD1.3650-CAD1.3730) today.
• The Reserve Bank of Australia hiked overnight cash rate target for the second time this year. The Aussie is the strongest currency so far this year, coming into today, up about 5.8% against the US dollar. It was one of three G10 currencies that advanced more than 1% yesterday (the other two being the Swedish krona and New Zealand dollar). It was initially sold to $0.7050 are the 5-4 decision but it recovered to approach $0.7100, where it stalled before the weekend. The futures market has about an 80% chance of another hike here in H1 26 compared with around 45% chance yesterday.
EM
• As soon as the greenback stabilized, the demand for the jumped. The peso was one of four emerging market currencies that rallied more than 1% yesterday (Brazilian real, Hungarian forint, and South African rand were the others). The swaps market is slightly less sure the central bank of Brazil will cut rate, as it previously indicated it would. The US dollar was sold to almost MXN17.65 yesterday, which was through last Friday’s low (~MXN17.75). It was the peso’s first advance in four sessions, and its largest gain (~1.5%) since last April. The dollar gave back around 2/3 of what it lost last week. It is pinned, so far today in yesterday’s trough. Nearby support is seen around MXN17.57-MXN17.60.
• The spent yesterday within the range seen before the weekend (~CNH6.8780-CNH6.9085) and remains in that range today. The greenback’s leg down against the yuan began last November from above CNH7.10. It reached about CNH6.8265 in late February but has been consolidating this month. After selling the dollar’s fix higher for the past three sessions, the PBOC lowered it today (CNY6.8961 vs. CNH6.9057 yesterday and CNY6.8982 last Tuesday).
• The continues to consolidate near the record lows set at the end of last week. Intervention by the central bank, real or feared, is countering the selling pressure from foreign sales of Indian equities and bonds. The rise in oil prices is seen as a significant knock on the Indian economy.
Other Markets
• Equities in Asia Pacific and European bourses are firmer for the second session. Even though the slipped marginally, the Topix gained nearly 0.5%. South Korea and Taiwan rose more than 1%. Among the large market in the region, only China failed to find traction. Europe’s Stoxx 600 is up about 0.25%. US index futures are slightly lower.
• Australia’s benchmark 10-year yield fell six basis points after the central bank’s rate hike, while the 10-year JGB yield was practically flat. European yields are mostly 2-4 bp lower and peripheral premiums are slightly narrower. The 10-year US Treasury yield is a little less than basis point firmer, near 4.22%.
• {{68|Gold} has lost its luster and is trading quietly around $5000. Silver recovered from a dip below $80 but stalled near $82.55.
• April WTI is trading with a firmer bias today but inside yesterday’s roughly $92.95-$102.45 range. The high today is slightly below $98.50.
Data
• Ahead of tomorrow’s outcome of the FOMC meeting and the Middle East war, today’s US February and the March NY Fed’s services reports will likely have little impact. Still, pending home sales ae seen falling for the third consecutive month, and mortgage rates have risen to 11-month highs here in March.
• Similarly, ahead of the tomorrow’s Bank of Canada announcement, February existing home sales are unlikely to move the market. In recent days, Canada has reported a much larger than expected trade deficit, a poor employment data, and yesterday, softer CPI.
• Germany’s ZEW survey results were mixed in March. The assessment of the current situation improved marginally for the third consecutive month (-62.9 vs -65.9). The expectations component collapsed to -0.5 from 58.3, the worst since last April.
• Japan’s economy seems stronger than it initially appeared. Recall that earlier this month, Q4 25 GDP was revised up to 1.3% from 0.2% at an annualized rate. The preliminary January industrial production estimate was 2.2% after falling by about 2.8% in the last two months of 2025. January tertiary activity, reported earlier today, rose by 1.7%, twice as much as the median in Bloomberg’s survey expected and offsetting the decline posted in the previous two months. The odds of an April hike in the swaps market were little changed, near 62%.
