The ongoing conflict remains a focal point, yet the dollar is experiencing a decline in value relative to the G10 currencies. April WTI is currently fluctuating within a $3 range on either side of $99 per barrel. The yields on US and European benchmark 10-year securities are slightly lower. While the markets may appear more stable, it is essential to acknowledge the underlying fragility, as the uncertainty of the situation obscures clear insight. In the meantime, the macroeconomic data from China for February has largely exceeded expectations. The French municipal elections are set for a run-off next weekend, with the crucial factor being the ability to form alliances. Prior to the weekend, a US federal court intervened to halt the Justice Department’s subpoena directed at the Federal Reserve. The US attorney for the District of Columbia, Pirro, has indicated her intention to appeal; however, it seems that no formal decision has yet been reached. The alteration in the methodology for calculating the US PCE deflator, transitioning from the CPI measure of legal services to the PPI estimate, surprised the market due to the lack of prior announcement or explanation. This change appears to have reduced the core measure by approximately 0.1%, raising concerns regarding the reliability of US data.

The euro approached $1.1480 today during European trading hours. Following a dip on Friday during early European trading, just under $1.1435, the euro made a recovery to approximately $1.1490. The bounce had already commenced prior to the revision of the US Q4 25 GDP, which was adjusted from 1.4% to 0.7% initially. In the afternoon session in New York, the euro experienced selling pressure, dipping to new lows just above $1.1410. This movement suggests that the short-term market is favoring long positions in US dollars, likely influenced by the heightened uncertainty stemming from the weekend’s developments. The yen held the position of the strongest G10 currency prior to the weekend, experiencing a decline of 0.20% against the dollar. The market appeared to adopt a cautious stance as it approached the JPY160 level, which we consider to hold psychological importance. Additionally, we observe that options totaling $845 million, which are set at that level, are set to expire today. The value reached JPY159.75. The region has maintained its position today, with the dollar retreating to nearly JPY159.15. If intervention is a ladder, Japanese officials have scarcely ascended it since the war. Finance Minister Katayama’s remarks were standard rhetoric, indicating that officials were ready to take all necessary measures, which represents a minimal level of verbal intervention.

Following a sell-off triggered by the disappointing news regarding the stagnation of the UK economy in January, sterling dipped slightly below $1.3250. However, it rebounded in the New York morning on Friday, approaching $1.3300 before encountering resistance. The asset reached new session lows, marking the lowest point of the year, approaching $1.3220 as the weekend approached. It remains stable in Europe and neared $1.3275 after maintaining a position above Friday’s low. The underwhelming Canadian jobs report allowed the greenback to rise slightly above CAD1.3740. Furthermore, the US dollar has established a position above CAD1.37 for just the second occasion since late January, following multiple attempts. The US dollar has positioned itself above the downward trendline that links the highs from late November and mid-January, located around CAD1.3725 prior to the weekend. It is currently consolidating in a subtle manner between just below CAD1.3690 and CAD1.3730 for the day. Surpassing resistance around CAD1.3760 would aim for the CAD1.3800 region next, which seems more challenging.

After achieving its highest point since mid-2022 in the middle of last week (~$0.7190), the Australian dollar experienced a decline due to profit-taking, coinciding with a reduction in the futures market’s expectations regarding a rate hike by the Reserve Bank of Australia tomorrow. The current probabilities in the futures market indicate a 65% likelihood of an interest rate hike, a decrease from nearly 87% prior to the onset of the conflict. The Australian dollar declined to $0.6980 during afternoon trading in New York as the weekend approached. Today, it has shown stability, maintaining Friday’s low and approaching $0.7030. Last week’s low was established on Monday at approximately $0.6955, while the monthly low occurred on March 3 at around $0.6945. A breach of those lows may trigger a movement towards $0.6900.