Market drivers and catalysts
Equities: U.S. stocks slipped, Europe advanced, and Asia stayed under pressure as oil, inflation worries and chip weakness drove the regional split
Volatility: Iran, oil, elevated VIX, downside skew
Digital Assets: stable BTC/ETH, mixed ETF flows, ETH weakness, defensive positioning
Fixed Income: US bonds recover from its deepest selloff in 17 months
Currencies: USD trades near four-month highs rounding off a strong month
Commodities: Oil fluctuates on mixed signals from Washington; gold tests resistance; key US crop report due
Macro events: Eurozone March CPI, US Feb JOLTS Job Openings & March Consumer Confidence
Macro headlines
President Trump has reportedly signalled a willingness to wind down the U.S. military campaign against Iran - even if the Strait of Hormuz remains largely closed. The apparent shift in strategy reflects a focus on achieving core objectives, including degrading Iran’s naval capabilities and missile inventory, while transitioning toward diplomatic efforts aimed at restoring the free flow of trade.
At the same time, tensions on the ground continue to escalate. Iran struck a Kuwaiti crude oil tanker in Dubai Port, triggering a fire and raising the risk of an oil spill in surrounding waters. In parallel, Tehran is said to be encouraging Houthi forces to prepare for a renewed campaign targeting Red Sea shipping routes, should U.S. attacks intensify.
On the monetary policy front, Federal Reserve Chair Jerome Powell reiterated that long-term U.S. inflation expectations remain well anchored. He emphasized that policy is currently “in a good place to wait and see,” noting that while officials are monitoring the economic impact of the conflict, there is no immediate need for a policy response.
China's factory activity expanded for the first time this year, with the official manufacturing purchasing managers' index reaching 50.4 in March. The non-manufacturing measure of activity in construction and services grew rose to 50.1 from 49.5 in February, despite the escalating conflict in the Middle East.
As the Middle East war persists, markets appear to be transitioning from an inflation shock caused by surging energy prices - previously weighing on bonds and gold - to a more pronounced growth shock. This shift is increasingly pressuring equities, while beginning to lend support to both bonds and gold as investors reassess the balance between inflation risks and slowing economic activity.
Macro calendar highlights (times in GMT)
0600 – UK March Nationwide House Prices
0645 – France March CPI
0900 – Eurozone March CPI
1400 – US Feb JOLTS Job Openings
1400 – US March Conference Board Consumer Confidence
1600 – USDA's Quarterly Stocks and Prospective Planting Reports
Fed speakers: Goolsbee (1600), Barr (1900), Bowman (2110)
Earnings this week
Today: Nike, FactSet Research
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. stocks finished mixed on Monday, with the S&P 500 down 0.4% to 6,343.72, the Nasdaq Composite off 0.7% to 20,794.64, and the Dow Jones edging up 0.1% to 45,216.14. The main drag was the same one markets have been wrestling with for days: higher oil prices and the risk that Middle East tension keeps inflation sticky. Nvidia fell 1.4% and Intel dropped 4.5% as chip stocks remained under pressure, while Sysco slumped 15.3% after announcing its Restaurant Depot deal, which investors treated more as a financing headache than a celebration. Markets now turn to the next batch of U.S. data for a read on growth and inflation.
Europe: European equities closed higher, with the Euro Stoxx 50 up 0.7% to 5,541.79, the FTSE 100 up 1.6% to 10,127.96, and Germany’s DAX up 1.2% to 22,562.88. The tone was firmer as lower bond yields and strong commodity-linked sectors helped offset the still uncomfortable backdrop from the Iran conflict. Shell rose 2.1% as oil stayed elevated, AstraZeneca gained 2.8% and remained a key support for the regional benchmark, while Rio Tinto climbed on recovering Pilbara operations and firmer metals prices. Travel names lagged as higher fuel costs complicated the mood, leaving inflation data and central-bank expectations as the next hurdle.
Asia: Asia traded with a weaker tone, although the pressure was uneven across the region. Hong Kong’s Hang Seng fell 0.8% to 24,750.79 and China’s CSI 300 slipped 0.2% to 4,491.95, while Japan and South Korea saw the sharper moves lower as investors reacted to the overnight U.S. tech weakness and the renewed jump in oil. Tencent fell 2.4% in Hong Kong, while Shenzhou International dropped 8.1% after disappointing results. The broader story was straightforward enough: markets were repricing the risk that higher energy costs and softer tech sentiment travel badly together. The next question is whether oil steadies, because that would give regional equities at least a fighting chance to calm down.
Volatility
Volatility remains elevated, but is no longer accelerating. The VIX closed at 30.61 on 30 March, slightly lower on the day, while VIX futures are trading lower, suggesting markets are not pricing an immediate escalation overnight. The core driver remains the Iran conflict and its impact on oil, inflation expectations, and growth risks. Markets are increasingly reacting less to headlines alone and more to whether there is a credible path toward de-escalation, which keeps volatility sensitive but less explosive than last week.
From SPX options pricing, the implied move into Wednesday’s 2 April expiry is about ±125.7 points (1.98%), which remains elevated and signals continued uncertainty. For today’s expiry, the options chain still shows a clear downside skew, with puts around the 6,340–6,350 area priced richer than calls. This indicates investors are still paying up for downside protection rather than positioning for upside.
Looking ahead, today’s US data (consumer confidence, JOLTS) and ongoing geopolitical headlines remain the key short-term volatility drivers, while oil continues to anchor the broader risk environment.
Digital Assets
Crypto is holding up relatively well compared to equities, but the tone remains cautious rather than strong. Bitcoin trades around $67,400–67,500, while Ethereum is near $2,050–2,060, both modestly higher on the day. Larger altcoins such as Solana (~$83) and XRP (~$1.32) are broadly stable, but there is no broad risk-on momentum across the space.
ETF flows remain mixed and are not yet providing a strong tailwind. Bitcoin ETFs saw modest inflows, with IBIT adding around $7.5 million, contributing to total daily net inflows of roughly $69 million. In contrast, Ethereum ETFs continue to lag, with ETHA seeing about $9.8 million in outflows, highlighting weaker institutional demand for ETH exposure.
From an options-flow perspective, positioning remains defensive. Investors continue to add downside protection in crypto-linked equities and ETFs, particularly through put buying in names such as COIN and IBIT. At the same time, selective long-dated call buying in names like MSTR suggests longer-term conviction remains intact, even as short-term positioning stays cautious.
- For investors, the message is simple: crypto is stabilising and not breaking down, but it still lacks the strong institutional inflows needed to support a more sustained upside move.
Fixed Income
The US bond market rallied back from its deepest selloff in 17 months as traders ditched wagers that the Federal Reserve will hike interest rates, with the focus shifting to speculation the Iran war will deepen an economic slowdown.
The advance extended after Fed Chair Jerome Powell said the central bank has little control over supply shocks, like the surge in oil prices caused by US war against Iran.
US 10-year notes, which hit an eight-month high Friday at 4.48%, have since fallen back to 4.32%, while the important 2-year tenor has returned to 3.8%, and near the Fed Funds upper bound at 3.75% from a 4.025% peak last week.
Commodities
Oil trades mixed as the impact from the largest ever disruption to Middle Eastern crude and fuel exports continues, with the Strait of Hormuz remaining largely closed. Adding to the volatility are mixed signals from President Trump, who has alternated between threatening further escalation and signalling a willingness to wind down the U.S. military campaign against Iran - even if the Strait remains restricted. Brent trades near USD 107.50 following the roll to the June contract from the expiring May contract, which traded at USD 6 premium, highlighting the extreme tightness in prompt supply. The market’s immediate focus remains on Iran, which effectively holds the key to reopening the Strait of Hormuz. A continued closure risks further price spikes and, ultimately, demand destruction.
Gold trades higher for a third consecutive session, briefly spiking above USD 4,600, supported by comments from Fed Chair Powell that helped ease rate-hike concerns. Additional support stems from reports that President Trump may be willing to end the war without reopening the Strait of Hormuz—potentially signalling higher-for-longer oil prices and sustained risks to economic growth. More broadly, gold and other hard assets are showing early signs of stabilising after a deep correction. The market narrative appears to be shifting from an initial inflation shock toward a potential growth shock—one that could underpin demand for bonds and gold.
Today, the USDA releases its Prospective Plantings and Quarterly Grain Stocks reports, offering the first clear snapshot of acreage intentions and inventory levels for the 2026/27 season. Planting decisions are being made under unusually tight conditions. The Iran war has disrupted energy and fertilizer markets, lifting input costs while grain prices remain relatively subdued. Trade estimates therefore point to reduced corn acreage and a sharp decline in spring wheat plantings, potentially to the lowest level since 1970, while soybeans are expected to gain acreage as farmers shift away from more input-intensive crops.
Currencies
As we round off an exceptionally challenging month, the FX market is clearly highlighting the winners - and not least the losers - of the Iran war, which has upended global supplies of key commodities, especially crude, fuels, and gas, thereby pressuring energy-importing economies.
Over the month, the Bloomberg Dollar Index has gained around 3%, reaching a four-month high in Asia today. In contrast, the euro and yen have declined by 2.9% and 2.2%, respectively, while the Korean won has been among the hardest hit, weakening by 6.2%. Similar, the Swedish krone, representing a small, highly open, and export-driven economy with a cyclical industrial base lost around 5.4%
Norway, by contrast, has benefited from surging energy prices. The NOK is heading for its strongest monthly close against the euro since July 2023, supported by the country’s role as a major oil and gas exporter.
