After over a month of conflict in the Middle East, the week just gone finally saw a ceasefire between the US and Iran. Admittedly, this break in hostilities looks shaky, and only a two-week pause has been agreed to as of now. Still, this creates the space for negotiations which are expected to take place in the coming weeks, offering markets hope that normality might soon return to global energy supply. That prospect has helped to push oil prices back below $100 per barrel already, with the dollar following energy costs lower over recent days. The DXY is trading in the mid-98s as of writing, having slipped more than 1.5% since April 3rd.

Yet despite this cooling in tensions, the evolution of talks will likely continue to preoccupy markets in the week ahead. To say that the data calendar is sparse, would be generous. Australian jobs data tops the docket, with few other G10 releases of note scheduled. A busier roster of central bank speak is due, but any market relevant commentary is still likely to be centred on the risks posed by Middle East hostilities. The one other event of note comes from Hungary, with a parliamentary election taking place on Sunday April 12th. Opinion polling points to an opposition victory, which if realised, would bring to and end Viktor Orban’s 16 years in office – with potential implications extending beyond Hungary to the wider European Union.

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Authors:

Nick Rees, Head of Macro Research

Barry van der Laan, Senior FX Market Strategist

Research Support:

Maya Barber

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