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EUR

Hopes & dreams

• Positive vibes. Markets hopeful another round of US/Iran talks yield positive results. Oil lower, equities higher. USD weaker. AUD at multi-week high.• Macro pulse. IMF downgraded global outlook. Australian business & consumer confidence tumbled. Conflict casting a long shadow over world economy. Global Trends Short-term sentiment driven markets have been in ‘glass half full’ mode overnight. Investors looked through the blockade of the Strait of Hormuz and lasered in on the prospect of another round of talks between the US and Iran, with reports suggesting they could be held over coming days. The current ceasefire is due to expire...

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Diplomacy hopes drive dollar lower

Good morning. Financial markets are rallying on hopes for a renewal of diplomatic engagement in the Middle East, with some media outlets reporting that US and Iranian negotiating teams could return to Islamabad for talks later this week. Oil prices are retreating, Treasury yields are coming under renewed pressure, equity markets are setting up for a positive open, and most major foreign exchange pairs are trading at or above key technical levels against the dollar. The euro is flirting with 1.18, the pound is holding above 1.35, the Canadian dollar is back in the 1.37s, and even the yen is...

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Iran whiplash forces markets into retreat

Hopes for a swift resolution to the war in the Middle East were shattered over the weekend when US-Iran peace talks collapsed and President Trump announced plans to blockade the Strait of Hormuz. Tehran reportedly baulked at several American red-line demands during Saturday’s negotiations, refusing to dismantle uranium-enrichment facilities, halt funding for regional proxies, or guarantee free passage through the Strait. Within hours of Trump’s threat, US Central Command said American forces would begin enforcing the blockade “impartially against vessels of all nations entering or departing Iranian ports and coastal areas” from 10:00 am Eastern time today. Markets have reacted...

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One step forward, two steps back

• US/Iran conflict. Weekend talks ended without an agreement. Energy prices jumped this morning. USD firmer. AUD & NZD lose ground.• Macro risks. US threatens to blockade the Strait of Hormuz. Downside risks to global economy remain. Volatility expected to continue for a while yet. Global Trends Market sentiment was underpinned last week by the US/Iran ceasefire news. There was a solid rebound in global equities (the S&P500 rose ~3.6% last week, its best weekly result since last November), bond yields declined, and oil prices pulled back. However, hope can only go so far. Weekend developments have once again highlighted...

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Markets edge higher as inflation surge matches estimates

Headline consumer price growth jumped by the most since June 2022 in the United States last month while measures of underlying pressure remained tame, underscoring the challenge facing the Federal Reserve as it struggles to balance labour market vulnerabilities against war- and tariff-related inflation risks. According to data published by the Bureau of Labor Statistics this morning, the all-items consumer price index rose 0.9 percent in March from the prior month, and 3.3 percent over the same period last year. This matched consensus estimates among economists polled by the major data providers ahead of the release, with a 20.2-percent jump...

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