Market drivers and catalysts
Equities: U.S. stocks pushed higher, while Europe and Asia turned cautious again as oil and Iran headlines kept driving the tape.
Volatility: Geopolitics, oil sensitivity, earnings season, software resilience
Digital Assets: BTC/ETH steady, IBIT/ETHA flows, crypto equities firm
Fixed Income: Yields ease lower on drop in energy prices
Currencies: USD sold off as global risk sentiment brightens. JPY outperformed early Tuesday
Commodities: Oil slips as US, Iran weigh more talks; copper at one-month high, gold rangebound
Macro events: US March PPI & IMF World Economic Outlook
Macro headlines
The US and Iran are weighing further talks on a longer-term ceasefire before the two-week truce ends. Trump said Tehran initiated contact, while President Pezeshkian expressed conditional readiness for dialogue. Earlier 21-hour talks failed, leading to a US oil blockade of Iranian ports. OPEC+ output fell 7.9 million barrels per day in March due to the Strait of Hormuz shutdown.
RBA’s Hauser said rates must bring inflation back to the 2–3% target, but the board lacks high confidence they’re at the right level amid a Middle East oil shock and still-high inflation.
Australia’s NAB Business Confidence survey suffered an historic collapse on a scale not seen since the outbreak of the Covid pandemic, likely as energy prices spiked and fuel shortage concerns weighed on the Iran war during the month. While the Business Conditions portion of the survey was steady at a reading of 6, the Business Confidence reading plunged to -29 from a reading of -1 in February.
UK like-for-like retail sales rose 3.1% YoY in March 2026, beating the 0.9% forecast and February’s 0.7%, the strongest since April 2025, helped by an early Easter. Food sales jumped 6.8% vs a 2.6% 12-month average, while non-food rose 0.9%, below its 1.1% average, with clothing and footwear still weak. Middle East–related travel uncertainty hurt travel goods, and the outlook remains uncertain.
Saudi Arabia’s oil supply slid to 7.76 mb/d in March 2026, the lowest since June 2020 and down from 10.11 mb/d in February amid conflict-related disruptions and a six-week Hormuz closure. Regional output from Iraq, Kuwait, and the UAE also fell. OPEC cut its Q2 demand outlook by 500,000 b/d but kept its full-year forecast ahead of a May 3 review.
Fed Governor Stephen Miran said the Iran war’s energy shock has not shifted long-run inflation expectations and still expects inflation to return to target within a year.
China’s export growth slowed sharply in March, with shipments rising just 2.5% year-on-year, while imports surged by 28%. This left the trade surplus at USD 51 billion—less than half the USD 107 billion expected. The divergence was driven by a jump in imports of refined oil products and other commodities, alongside strong demand for high-tech goods, where imports rose nearly 30% in the first quarter of 2026. Some of the weakness in export growth likely reflects seasonal distortions linked to the timing of the Lunar New Year.
Macro calendar highlights (times in GMT)
0800 – IEAs Monthly Oil Market Report
1000 – US Mar. NFIB Small Business Optimism
1215 – US Weekly ADP Employment Change for four weeks ending Mar 28
1230 – US March PPI
1300 – IMF World Economic Outlook
1605 – UK Bank of England Governor Bailey to speak
2100 – ECB President Lagarde to speak
Earnings this week
Today: Tuesday: JP Morgan, Johnson & Johnson, Wells Fargo, Citigroup, Blackrock, BMW
Wednesday: ASML, Bank of America, Morgan Stanley, Progressive Corporation, PNC Financial Services
Thursday: TSMC, Netflix, PepsiCo, Abbott Laboratories, Charles Schwab, Prologis, Bank of New York Mellon, US Bancorp, Marsh & McLennan, Travelers Companies, Infosys, Tesco
Friday: Truist Financial, Fifth Third Bancorp, Ericsson
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: USA: S&P 500 rose 1.0% to 6,886.24, the Dow gained 0.6% to 48,218.25, and the Nasdaq Composite added 1.2% to 23,183.74, as investors looked past failed weekend U.S.-Iran talks and warmed to the idea that oil settling back below $100 could limit the economic damage. Technology and financials led, with Oracle jumping 12.7% after its Customer Edge Summit revived confidence in its artificial intelligence push, Microsoft climbing 3.6% as one of the session’s biggest index contributors, KKR rising 7.6% in the broader risk-on rebound, and Sandisk adding 11.8% after its Nasdaq-100 inclusion. Markets now turn to bank earnings for the next reality check.
Europe: Europe: STOXX Europe 600 slipped 0.2% to 613.88, the DAX fell 0.3% to 23,742.44, and the FTSE 100 edged 0.2% lower to 10,582.96, as failed U.S.-Iran talks and a fresh U.S. blockade around Iranian ports pushed oil back above $100 and revived inflation worries. The market still found pockets of strength: Wise rose 6.5% ahead of its Nasdaq debut, BAE Systems added 2.4% as defence held firm, and Shell gained more than 1% on firmer crude prices, while Deutsche Telekom dropped 6.1% after JPMorgan cut its price target. U.S. earnings and the rate outlook now look like the next test.
Asia: Asia: Asia ended Monday on a softer note before Tuesday’s rebound, with Japan’s Nikkei 225 falling 0.7% to 56,502.77, Hong Kong’s Hang Seng down 0.9% to 25,660.85, South Korea’s Kospi off 0.9% to 5,808.62, and Australia’s ASX 200 lower by 0.4% to 8,926.00, as the collapse in U.S.-Iran talks sent oil back above $100 and hit transport and rate-sensitive shares. Samsung Electronics fell 2.4% and Hanwha Ocean lost 2.2% in Seoul, Cathay Pacific dropped 2.3% after flagging flight cuts as jet fuel costs surged, while Australia’s Woodside and Santos rose between 2% and 3% on the energy move. Investors now watch whether Tuesday’s relief bounce can survive the next headline.
Volatility
Volatility eased slightly on Monday, but the market is still sensitive to headlines. The main driver remains the Middle East, where shifting expectations around US-Iran negotiations continue to move oil prices and, in turn, broader risk sentiment. At the same time, the start of earnings season is beginning to take focus, with a notable rebound in software stocks showing that parts of the market are looking through the Hormuz disruption. The VIX closed at 19.12, down modestly on the day, which signals a calmer tone than last week but not a fully settled market.
Based on current SPX options pricing, the market is implying a move of about 88 points (1.28%) into the 17 April expiry, while today’s expected move is around 33 points (0.48%).
- The 0DTE options setup still shows a mild downside skew, meaning investors continue to pay slightly more for short-term protection than for upside exposure.
Digital Assets
Digital assets remain resilient, but they are still trading in line with broader risk sentiment. Bitcoin is holding around $74k and ether near $2.36k, supported by the same improvement in market mood linked to hopes of easing geopolitical tensions.
Institutional flows remain a key anchor: IBIT continues to act as the main sentiment gauge with roughly $57.6bn in assets, while ETHA holds near $6.9bn, showing continued, though smaller, demand for ether exposure.
In crypto-related equities, the tone is constructive, with gains in names such as Coinbase, MicroStrategy and several miners suggesting continued participation. Among major alt-coins, the picture is more selective: XRP and Solana are slightly softer, reinforcing the view that investors are still engaged in the space, but with a preference for larger, more established assets over higher-beta exposure.
Fixed Income
US treasury yields retreated from Monday’s higher gap open as oil prices came under pressure. The benchmark 2-year US treasury yield dropped back to below Friday’s close after gapping as high as 3.84% early Monday after weekend talks between the US and Iran failed to produce agreement, drifting as low as 3.77% early Tuesday. The benchmark 10-year treasury likewise fell from its gap higher Monday, trading early Tuesday at 4.28%, some four basis points below Friday’s closing level.
Japan’s government bonds rallied Tuesday, with the benchmark 2-year JGB yield eyeing its lowest daily close in nine days near 1.38% in late trading in Tokyo Tuesday. At the longer end of the curve, the benchmark 10-year JGB yield dropped back more than four basis points toward 2.43% after Monday’s action saw the yield testing close to 2.50% for the first time since 1999.
Commodities
Oil slipped back below USD 100 after Monday’s rebound faded, amid tentative signs that Washington and Tehran may seek to revive previously stalled peace talks. Meanwhile, the US blockade of the Strait of Hormuz has begun, but with limited immediate impact—highlighted by a Chinese-owned, US-sanctioned tanker successfully transiting the Strait on Tuesday morning. OPEC crude production plunged by a record 7.88 mb/d last month as the conflict disrupted supplies from key Persian Gulf producers. At the same time, the group lowered its Q2 demand forecast by just 0.5 mb/d, underlining a widening imbalance between sharply reduced supply and demand that has yet to show a meaningful slowdown. Attention now turns to today’s IEA monthly report.
HG copper trades back above USD 6 for the first time in a month, supported by hopes of easing US-Iran tensions and reduced near-term growth concerns. The metal fell to USD 5.25 last month as inflation and recession fears intensified, before finding support around the 200-day moving average and rebounding.
Gold continues to trade within a USD 200 range, rebounding from around USD 4,650 on Monday to the middle of that band. Hedge funds have reduced their net long futures position to a 25-month low in the latest reporting week to 7 April. The last time positioning was this low, gold traded close to USD 2,000/oz. Key resistance remains around USD 4,850, with a break higher likely needed to trigger renewed momentum and technical buying.
Currencies
The US dollar sold off sharply Monday on the strong rally in global risk sentiment as the oil price spike eased on hopes that US-Iran talks might resume. EURUSD rallied above 1.1750 for the first time since early March. The decline in yields may have offered the Japanese yen more support as USDJPY dropped back below 159.00 at one point in Asian trading hours Tuesday.
The Australian dollar underperformed Tuesday, perhaps as Australia reported a massive collapse in business confidence for March (see above), likely linked to the energy price spike in sporadic fuel shortages in some areas in Australia since the Iran war outbreak. AUDUSD peaked at 0.7103 early Tuesday before easing back toward 0.7080, while AUDNZD fell to 1.2062 after trading near 1.2100.
