The Morning Update

The USD slips, oil extends gains, while equity & US yields are mixed after the announcement of an Iran ceasefire extension. The USD slips in early trading, though it remains near recent highs as markets navigate ongoing uncertainty around the Iran ceasefire. While the extension has offered some relief, lingering doubts over participation and continued naval blockades are keeping a cautious tone in place. Warsh’s slightly hawkish remarks and reaffirmation of Fed independence add modest support, though overall FX moves remain subdued amid low conviction. Global equities are mixed, with Asian markets showing modest gains while U.S. futures edge higher and European indices trade more cautiously. Investor sentiment remains guarded as markets weigh uncertainty around the US-Iran ceasefire extension and ongoing geopolitical risks. Elsewhere, oil prices advance but ease from overnight highs amid ongoing volatility around the Strait of Hormuz. Meanwhile, Bitcoin rallies strongly above $78,000 on improved risk appetite, while gold also edges higher, supported by persistent geopolitical uncertainty. Today sees a light economic calendar, so focus will be on CAD new housing prices, EU consumer confidence and comments for ECB President Lagarde to help provide direction to currency markets.

‍

News Headlines. Two container ships attacked in the Strait of Hormuz after Trump extends ceasefire. Moscow to suspend Kazakh oil flows through key pipeline supplying Berlin. SpaceX obtains the right to buy AI start-up Cursor for $60bn. Taxes on wages hit decade high across OECD countries. Hormuz disruption raises risk of global food shock, traders warn. Trump extends Iran ceasefire as peace talks hit impasse. Peru elections chief resigns as vote count continues nine days after poll. Canada wants reciprocity after the US 'pocketed' concessions. Canada plans to allow commercial space launches and reduce reliance on the US. UK inflation jumps as Mideast war raise energy prices.

‍

In currency markets. Currency markets are broadly steady in early trading, with G10 currencies edging slightly higher against the USD as investors adopt a cautious stance around the evolving US-Iran ceasefire situation. Moves remain limited and range-bound, reflecting low conviction and a wait-and-see approach amid ongoing geopolitical uncertainty.

‍

In commodity markets. Oil & Soybean prices firmed 0.8%. Natural Gas, Gold & Copper prices strengthened 1.1%. Silver & Coffee prices rallied 2%, while Wheat prices gained 0.4%.

‍

CAD holds steady near six-week highs in early trading, finding support from firm commodity prices despite a modest pullback amid lingering geopolitical uncertainty. A light domestic data calendar and caution around the Iran ceasefire outlook are keeping markets in a wait-and-see mode, with headline risk driving short-term moves. Attention is also turning to upcoming CUSMA discussions, which add another layer of uncertainty for the loonie’s outlook.

‍

EURCAD holds steady in early trading, with both currencies supported by their respective drivers—euro stability around 1.1750 and a resilient loonie despite softer oil prices. The cross remains range-bound as markets balance cautious geopolitical sentiment with limited domestic catalysts. Near-term direction will hinge on incoming Eurozone data and ECB commentary, as well as broader risk sentiment.

‍

EUR continues to find support around 1.1750, with the single currency trading in a narrow range as cautious optimism around the US-Iran ceasefire keeps the USD on the defensive. However, lingering uncertainty and ongoing naval blockades are limiting upside momentum. Focus now turns to Eurozone Consumer Confidence data and upcoming ECB commentary, including President Lagarde, for further direction.

‍

GBPEUR strengthens in early trading, with the pound gaining traction following stronger-than-expected UK inflation data. The uptick in CPI reinforces expectations that the BoE may need to maintain a tighter policy stance, lending support to sterling. Focus now shifts to ECB speakers, including President Lagarde, for further guidance on the euro’s outlook.

‍

GBP holds steady in early trading, with the pound holding above 1.3500 following UK CPI data that met expectations at 3.3% YoY, with monthly inflation rising 0.7%—highlighting persistent price pressures. While the data underscores the inflationary impact of higher energy costs, it is unlikely to prompt immediate action, with markets still expecting the Bank of England to keep rates on hold at the April 30 meeting. Focus remains on incoming data and external risks, with geopolitical developments and USD direction likely to drive near-term moves.

‍