Societe Generale said UK data were limited last week, and the March RICS housing survey showed weaker conditions across most measures. It linked softer demand to higher energy costs, fewer mortgage deals, and rising mortgage rates.

The Bank of England Credit Conditions Survey ran from 23 February to 13 March and included the period of the energy shock. It reported that banks expect demand for, and availability of, secured household and corporate credit to rise in Q2 2026.

Bank Of England Speakers And Blackout

This week includes speeches from Bank of England members Bailey, Greene, Taylor, and Mann. These are expected to be the last public remarks before the blackout period ahead of the 30 April MPC meeting, where rates are expected to stay unchanged.

Bailey previously pushed back on market pricing of rate rises, even as about 40bp of hikes remain priced in. Taylor may address whether a rate cut could be considered as early as April, following a tentative ceasefire agreement.

For data releases, Societe Generale expects February GDP to rise by 0.1% month on month. It will also track the BRC March retail sales index for an update on consumer spending under higher fuel costs and weaker confidence.

The UK housing market is showing familiar signs of weakness that we observed around this time in 2025. The latest RICS UK Residential Market Survey from March 2026 shows new buyer enquiries have been flat for two months, suggesting demand remains fragile as mortgage rates stay elevated. This points to potential downside in housing-related assets and sterling volatility.

Market Implications For Rates And Sterling

We remember the Bank’s Credit Conditions Survey from Q1 2025 seemed overly optimistic about credit demand in the face of an energy shock. This time, with the UK having just exited a technical recession at the end of 2025, and February 2026 GDP showing a slight 0.1% rebound, any optimism must be cautious. Traders should consider positions that benefit from low-growth scenarios, such as paying fixed rates on interest rate swaps.

This week brings a flurry of speeches from BoE members before their quiet period ahead of the next meeting. Unlike last year when Governor Bailey was pushing back against rate hike bets, the market is now pricing in over 50 basis points of rate cuts by year-end. These speeches could cause SONIA futures to reprice if the tone is more hawkish than expected.

We will be watching for any dovish signals, especially after two MPC members, Swati Dhingra and Dave Ramsden, voted for a rate cut at the last meeting in March 2026. This hints at a growing split within the committee on when to start easing policy. Any sign of a third member shifting to a dovish stance could accelerate bets on a summer rate cut.

The key data point will be the March 2026 CPI inflation report, as the February figure of 3.4% was still well above the 2% target. Additionally, the BRC’s March retail sales data will be critical for gauging consumer strength, especially since recent ONS figures showed retail volumes were flat. A miss in either of these figures could solidify expectations for an earlier rate cut, impacting short-term bond yields.

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The Reserve Bank of Australia raised the cash rate target by 25bps to 4.10% at its 17 March meeting. The decision was close at 5–4, with four members preferring no change due to uncertainty about labour market tightness.

Australia’s March labour force report on Thursday is set to shape expectations for the next rate move. Forecasts point to +17.8k jobs, down from +48.9k in February, with unemployment seen at 4.3% for a second month.

March Labour Report And Rate Outlook

If job growth comes in stronger than expected, markets may bring forward expectations for another 25bps increase at the 5 May policy meeting. The probability of a May hike is currently priced at 62%, while weaker data could move expectations to a later date.

In currency trading, AUD/USD is near resistance at 0.7200 and has support around 0.7000. The source notes the article was produced using an AI tool and reviewed by an editor.

Looking back at the situation in early 2025, we remember the Reserve Bank of Australia’s policy was on a knife’s edge, with a narrow vote to hike its cash rate to 4.10%. Back then, every jobs report was critical in determining the timing of the next rate increase. This created significant uncertainty and opportunity around key data releases.

Today, on April 13, 2026, the landscape has changed considerably, as the RBA has since entered an easing cycle with the cash rate now at 3.85%. The labor market has also cooled, with the latest unemployment figures from March 2026 showing a rise to 4.5%, slightly above the RBA’s earlier projections for this year. This softening confirms the central bank’s dovish pivot and changes how we should approach the market.

Approaching Audusd In A Dovish Cycle

With the RBA now cutting rates, the underlying pressure on the AUD/USD is bearish, a stark contrast to the hawkish sentiment we saw last year. The pair is currently trading near 0.6750, well below the 0.7000 support level from early 2025, which now acts as a significant resistance point. We believe derivative traders should therefore favor strategies that profit from further downside or limited upside in the currency pair.

Given this context, buying AUD/USD put options provides a clear directional bet with defined risk, especially ahead of major data events. Another approach is to sell out-of-the-money call spreads, which would profit if the AUD/USD pair remains below key resistance levels like 0.6850 or 0.6900. This strategy is effective in the current environment where rate cuts are capping any potential rallies.

The primary market catalyst has shifted from employment data to inflation reports, which will now dictate the pace of the RBA’s rate cuts. The upcoming quarterly CPI data will be the next major event for the Australian dollar. We should therefore consider positioning for a weaker AUD ahead of that release, as a soft inflation print would increase bets on a more aggressive easing cycle from the RBA.

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Oil prices rose after US-Iran talks ended without agreement. ICE Brent climbed more than 9% in early trade and NYMEX WTI moved above $105/bbl.

The US military plans a blockade on maritime traffic entering and leaving Iranian ports from 10:00am Monday Washington time. Ships not calling at Iranian ports would still be allowed to transit the Strait of Hormuz.

Energy Markets React To Escalating Tensions

European gas prices also increased, with front-month TTF futures up nearly 18% to intraday highs above EUR51/MWh. The conflict is now in its sixth week, adding to concerns about near-term supply.

Speculative positioning shifted in different ways across benchmarks. Net long positions in ICE Brent fell by 5,583 lots to 424,270 lots, including a 4,525-lot drop in gross longs.

In NYMEX WTI, net longs rose by 7,121 lots to 137,838 lots over the week. The figures were reported as of last Tuesday.

US drilling activity remained steady, with the oil rig count unchanged at 411 as of 10 April, according to Baker Hughes. Total rigs fell by three to 545, which is 38 rigs fewer than a year earlier.

Opec Report In Focus

Markets are also watching for OPEC’s monthly report due later on Monday. The report is expected to update supply balance guidance.

With oil prices already spiking above $105, the most immediate play is on volatility itself, which is set to explode. We should consider buying straddles or strangles on front-month contracts, as this allows for profit from a massive price swing in either direction. The cost of options will be high, but the risk of a sudden de-escalation is just as real as the threat of a full-blown conflict.

The divergence between Brent and WTI futures presents a clear spread opportunity for us. Since a US blockade directly threatens seaborne crude from the Persian Gulf, the premium for Brent should widen significantly against the more land-locked WTI. This is especially true when we remember that nearly 21 million barrels of oil pass through the Strait of Hormuz daily, making this a global, not just an Iranian, supply threat.

For those with a directional view, buying May and June call options on Brent seems prudent, even at these elevated prices. This move feels similar to the initial shock we saw back in early 2022 after the invasion of Ukraine, which sent prices soaring. Using call spreads, where we buy a call and sell a higher-strike call, could be a cheaper way to position for further upside while limiting our initial cost.

The supply fundamentals support a bullish stance in the near term, as a blockade could immediately remove over 1.5 million barrels per day of Iranian crude from the market. We can’t expect a rapid US supply response to fill that gap, especially with the US rig count stuck at 411, a stark contrast to the nearly 600 rigs we saw operating back in early 2025. This limited spare capacity in the system means any disruption will have an outsized price impact.

This situation builds on the market fragility we observed last year with the Houthi disruptions in the Red Sea, which already added a risk premium to crude. The parallel surge in European natural gas prices shows this is a broad energy security crisis, not just an oil market event. We must therefore remain nimble, as headlines from Washington or Tehran could cause violent price swings with very little warning.

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Deutsche Bank economists said the Federal Reserve kept interest rates unchanged in March, with the target range at 3.50%–3.75%. They still forecast a 25 basis point cut in September.

They said markets expect limited easing, with around 6 basis points priced in by year-end. This implies a 24% probability of a rate cut.

Hormuz Blockade Risk

They warned that a prolonged blockade of the Strait of Hormuz could push Brent crude towards USD 120 per barrel. They noted that such an energy shock could affect inflation.

US inflation has risen to 3.3%. Their forecasts put 2026 growth at 2.5% and 2026 inflation at 3.4%.

They said weaker labour market conditions would support a rate cut. They also said an inflation rise linked to higher energy prices could lead to a rate rise.

With the Federal Reserve holding interest rates at 3.50%-3.75% last month, the market is pricing in only a 24% chance of a rate cut this year. We, however, continue to forecast a quarter-point cut in September. This difference in outlook presents a clear opportunity for traders in the coming weeks.

Trading Implications

We see an opportunity in interest rate futures, as the market has not fully priced in our September rate cut expectation. The latest jobs report from early April showed non-farm payrolls slowing to 145,000, missing consensus estimates and supporting the case for a weakening labor market. Traders should consider positions that will benefit from a drop in rates later this year.

The primary risk to this view is a potential blockade of the Strait of Hormuz, which could push Brent crude toward $120 per barrel. Recent maritime reports indicate heightened naval activity in the region, making this a tangible threat. Looking back at the tensions in mid-2025, we saw a brief 18% spike in oil prices from a similar, though less severe, situation.

A sustained oil price shock would complicate the Fed’s path, as current US inflation is already at 3.3%. An energy-driven surge in prices could force the central bank to delay cuts or even consider a hike, despite a cooling labor market. Therefore, buying long-dated call options on crude oil or energy sector ETFs could serve as an effective hedge against this major risk.

Given these opposing forces, volatility is likely underpriced across markets. With the VIX index hovering near a relatively low 15, options are not expensive. Establishing long volatility positions through straddles on major indices could prove profitable, as the market will likely have to move sharply once the Fed’s direction becomes clearer.

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EUR/USD moved back towards 1.1700 in late European trade on Monday, but remained down 0.2% on the day. The rebound stalled near the 50.0% Fibonacci retracement at 1.1750.

Risk appetite weakened after the first round of US-Iran talks failed, following Tehran’s refusal to give up its nuclear ambitions. US President Donald Trump said the US will blockade Iranian ports from April 13 at 10:00 AM ET (14:00 GMT).

Dollar Demand Strengthens

US stock futures pointed to a lower open for the S&P 500. Demand for the US Dollar rose, with the US Dollar Index (DXY) up 0.2% to around 99.00.

Technically, EUR/USD stayed above the 20-day EMA at 1.1611 and the 38.2% retracement at 1.1671. The 14-period RSI was 57.6, above 50 and below overbought levels.

Resistance sits at 1.1750, then 1.1830 at the 61.8% retracement. Support is at 1.1671, then 1.1611, with further levels at 1.1572 and 1.1413.

The current market mood is becoming more cautious, reminding us of past risk-off events like the US-Iran tensions during the Trump administration. We saw then how geopolitical stress directly led to a stronger US dollar as investors sought safety. This historical pattern from before 2025 provides a useful template for what we can expect in the coming weeks of April 2026.

Options Strategies In A Risk Off Tape

Today, with new friction reported in the South China Sea, we are observing a similar flight to the dollar. The CBOE Volatility Index (VIX), a key measure of market fear, has surged to 23.5 this week, well above the first quarter’s average of 17. This move is compounded by last week’s US inflation data, which showed core CPI remaining stubborn at 3.2%, giving the Federal Reserve little reason to soften its stance.

For derivative traders, this points toward strategies that benefit from a declining EUR/USD and heightened market volatility. We saw a comparable situation in 2025 when supply chain disruptions in Europe caused a sharp, though temporary, spike in the dollar’s value. Buying put options on the EUR/USD, or using bear put spreads to offset the higher premiums from increased volatility, could be a prudent approach to target a move lower.

Implied volatility in EUR/USD options has risen, making short-dated contracts for late April and May particularly responsive to price swings. The pair is currently struggling to hold above the 1.0680 level, a key technical support zone from earlier this year. A firm break below this could create a path towards the 1.0550 mark, a level not seen since the fourth quarter of last year.

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USD/CAD traded near 1.3840 on Monday, little changed after a brief earlier rise. The pair struggled to extend gains as two forces balanced each other.

West Texas Intermediate (WTI) rose nearly 7% on Monday at the time of writing. The jump followed rising tensions between the US and Iran after talks on Iran’s nuclear programme collapsed, with worries about supply risks near the Strait of Hormuz.

Oil Prices Support The Canadian Dollar

Higher Oil prices tend to support the Canadian Dollar because energy is important to Canada’s economy. Canada is the largest crude oil exporter to the United States, so firmer crude prices can limit rises in USD/CAD.

The US Dollar also found support as market risk appetite weakened after the breakdown in US–Iran negotiations. Higher energy prices also raised inflation concerns and added to the case for US interest rates staying higher for longer.

US Treasury yields moved higher, which helped the US Dollar. With Oil supporting CAD and US rate expectations supporting USD, USD/CAD stayed broadly steady.

We are seeing a similar dynamic to what occurred back in 2025, with USD/CAD caught between powerful opposing forces. The pair is currently trading near 1.3750, as the market weighs strong energy prices against a resolute US Federal Reserve. This tension creates opportunities for traders who can manage volatility.

Policy Divergence Keeps Markets On Edge

The Canadian dollar is finding support from West Texas Intermediate crude holding above $95 a barrel, driven by recent supply anxieties. As of April 2026, Canada’s net exports of energy products have contributed significantly to its trade surplus, a pattern that strengthens the Loonie when oil is high. This fundamental support is putting a cap on any significant upward moves in the USD/CAD pair for now.

On the other side, the US dollar is being propped up by expectations of continued policy divergence between the central banks. The latest US CPI data for March 2026 came in at a stubborn 3.1%, keeping pressure on the Federal Reserve to hold rates higher for longer. In contrast, the Bank of Canada is signaling more willingness to ease policy, which inherently weakens the Canadian currency relative to the greenback.

Given this stalemate, derivative traders should look at strategies that profit from a potential sharp move in either direction. Buying option straddles or strangles on USD/CAD could be effective, as it allows for a payoff if the pair breaks decisively out of its current range. Implied volatility has ticked up to reflect this uncertainty, making these strategies relevant for the coming weeks.

Alternatively, for those anticipating the range will hold, selling options to collect premium is a viable approach. Establishing an iron condor would define a specific price channel where the trade is profitable, capitalizing on the current tug-of-war. This is a bet that neither surging oil nor a hawkish Fed will win out in the immediate short term.

We can look to history for perspective, such as the period in 2022 when oil prices soared but were ultimately overshadowed by the Fed’s aggressive rate-hiking cycle. That historical data suggests that a determined central bank policy can often be the more dominant long-term driver for the currency pair. Traders should remain alert for any decisive shift in rhetoric from either the Fed or the Bank of Canada.

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EUR/USD fell from last week’s high near 1.1740 on Monday but stayed above 1.1670 and hovered just under 1.1700. The pair rebounded from early Asian session lows around 1.1670.

Oil prices rose after US-Iran talks failed and the US said it would block the Strait of Hormuz, which supported the US Dollar. The Euro’s drop was limited, while Brent crude traded just above 100 USD per barrel and EUR/USD moved below 1.17.

Market Focus And Near Term Drivers

The day’s economic diary is light, so headlines from Iran may keep driving price action. On Tuesday, attention turns to ECB President Christine Lagarde ahead of the next monetary policy decision due on 30 April.

EUR/USD kept a mild bullish bias while consolidating above 1.1630. The Relative Strength Index was around the mid-50s and MACD hovered near the zero line.

Resistance sits at 1.1725–1.1735, then 1.1825, with a further level near 1.1930. Support is at 1.1670, then 1.1630–1.1640, and a rising trend support near 1.1590.

We are seeing a familiar pattern of consolidation in EUR/USD, reminiscent of the period just before the Hormuz blockade in April of last year. The market seems too calm, with implied volatility at low levels despite significant geopolitical risk simmering in the background. With the Cboe EuroCurrency Volatility Index (EVZ) currently trading near 6.8, we believe the market is underpricing the potential for a sharp move.

Options Strategy And Volatility Positioning

Given this complacency, we think buying volatility is the most prudent strategy for the coming weeks. A long straddle using at-the-money options would position a trader to profit from a significant price swing in either direction, whether from a sudden de-escalation or an unexpected turn for the worse. This approach is favorable when the market expects stability, as it did in 2025, right before oil prices spiked past $100 per barrel.

Just as we watched the ECB in 2025, we must now focus on the upcoming central bank meetings, as any hawkish or dovish surprise could break the current deadlock. Market pricing, according to recent overnight index swaps, indicates a 70% chance of a 25 basis point hike from the Fed, but a surprise hold could send the dollar tumbling. This monetary policy divergence remains a key catalyst for the currency pair.

For those with a directional view, the technical levels we observed last year can serve as a guide for structured trades. Purchasing call spreads above the 1.1750 resistance level offers a cheap way to bet on a bullish breakout, while put options below the 1.1650 support can serve as a hedge. The current put-to-call ratio on CME euro options sits at 0.92, suggesting a slight bullish bias but no strong conviction from the broader market.

The relationship between oil and the dollar that we saw play out in 2025 remains critical. We are watching Brent crude prices, which have crept up 8% in the last month to over $95 a barrel, putting pressure on global inflation expectations. Any further escalation in geopolitical tensions could push oil higher, likely strengthening the dollar as a safe-haven asset and pushing EUR/USD down through its recent support levels.

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Silver (XAG/USD) traded almost flat above $74.00 after falling to $72.61 earlier in the session. Precious metals eased after US-Iran talks ended without agreement and Donald Trump threatened to block the Strait of Hormuz, supporting the US Dollar.

US negotiators said Iran’s refusal to stop enriching uranium remained a red line. A two-week ceasefire is still in place, leaving the door open to further talks.

Near Term Focus Shifts To Us Ppi

The calendar is quiet on Monday, with focus turning to the US Producer Prices Index (PPI) for March on Tuesday. The release follows Friday’s Consumer Price Index (CPI) report and is expected to reflect inflation pressure linked to the Iran war.

Technically, silver is holding above the lower edge of a rising channel from late March, but momentum has weakened. The 4-hour RSI has moved below the midline and the MACD is negative.

A break below the channel base near $73.50 would fit a Bearish Flag, with an initial target near $61.00 (March 23 low). Support is also noted at $68.20 to $69.80, while resistance sits at $77.65, $81.13, and around $85.00.

Looking back at the analysis from April 2025, we can see the market was concerned about a potential breakdown in silver below $74.00. The focus at that time was on a strong dollar fueled by geopolitical tensions with Iran and a hawkish Federal Reserve. This bearish outlook was based on a technical flag pattern that suggested a sharp drop was possible.

How The 2025 Setup Evolved

That bearish flag formation ultimately failed as support in the low $70s held throughout the spring of 2025. The anticipated escalation in the Strait of Hormuz did not materialize, causing the dollar’s safe-haven bid to fade. Consequently, the market’s attention shifted away from geopolitics and toward economic fundamentals.

By late 2025, inflation showed clear signs of cooling, with the annual CPI rate falling to 3.1% in the fourth quarter from its mid-year highs. This data prompted the Federal Reserve to signal a pause in its rate-hiking cycle, which has now turned into active discussions of rate cuts for the second half of 2026. A weaker dollar environment is fundamentally supportive for precious metals.

Furthermore, silver’s industrial demand has significantly outpaced expectations. Recent data from the Silver Institute shows that global demand from the solar panel industry grew by over 15% in 2025, a trend that is accelerating this year. This robust industrial use case provides a strong floor for silver prices, independent of investment flows.

The Gold/Silver ratio, which was hovering near 85:1 in early 2025, has since compressed to 76:1. This shows that silver has been outperforming gold, largely due to its critical role in green energy and electronics manufacturing. We see this trend continuing as industrial demand remains a primary price driver.

Given this shift, derivative traders should adjust their strategies from the bearish bias of last year. We believe buying call options on price dips offers a low-risk way to capture the renewed upside momentum. Selling cash-secured puts at established support levels, such as the $78-$80 range, could also be an effective strategy to collect premium while waiting for a potential entry point.

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The US Dollar has given back earlier gains against the Swiss Franc, with USD/CHF staying in a roughly 70-pip range near 0.7900 on Monday. Attempts to rise have stalled below 0.7925-0.7930.

Peace talks between the US and Iran ended without an agreement last weekend. US President Donald Trump said he ordered the US military to block any vessel trying to enter or leave Iranian ports from Monday at 10:00 Easter time (14:00 GMT).

Strait Of Hormuz Tensions

Iran said the restrictions are illegal and described them as piracy. The Revolutionary Guard said foreign military vessels in Hormuz would be treated as a ceasefire breach and would be dealt with severely.

A two-week truce remains in place, leaving open the chance of more talks. This has limited the US Dollar’s ability to push higher.

The economic calendar is almost empty on Monday, so Iran-related updates are expected to drive trading. On Tuesday, the US Producer Price Index for March is due after last Friday’s US Consumer Prices Index (CPI), and could add pressure on the Federal Reserve to reverse its easing cycle.

We are seeing a market that is very different from the past. When we looked back from 2025, we remembered the period during the Trump administration when US-Iran tensions in the Strait of Hormuz dominated headlines. Those geopolitical flare-ups acted as a powerful anchor, keeping the US Dollar suppressed against safe-havens like the Swiss Franc.

Central Bank Policy Divergence

That dynamic kept USD/CHF trapped in tight ranges, such as the 0.7900 level mentioned in those old reports. Today, however, the pair is trading much higher, currently holding around 0.9120 as the market’s focus has completely shifted. Geopolitical risk has been replaced by the starkly different paths of central bank policy.

The main driver now is the divergence between the Federal Reserve and the Swiss National Bank. Data released in the first week of April 2026 showed US core inflation accelerating to 3.7%, putting immense pressure on the Fed to maintain its hawkish stance. In contrast, Swiss inflation, reported last week, cooled to just 1.4%, giving the SNB room to consider further rate cuts after its initial move last month.

This widening interest rate differential is creating a strong tailwind for the dollar against the franc. We believe this trend makes long-volatility strategies attractive in the coming weeks. Traders could consider buying at-the-money straddles on USD/CHF options to capitalize on a potential breakout from the current consolidation phase.

For those with a directional bias, the fundamental picture favors further dollar strength. Buying USD/CHF call options with a two-month expiry offers a defined-risk way to profit from a move towards the 0.9300 resistance level. This strategy positions for a continuation of the policy-driven trend we are currently witnessing.

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AUD/USD rebounded from 0.6990 on Monday and filled a prior gap near 0.7055, but it has struggled to hold above 0.7060. Softer risk mood has limited further gains against the US Dollar.

US President Trump said on Truth Social that he ordered the US Navy to block any vessel entering or leaving Iran’s ports, linked to plans to close the Strait of Hormuz. The action is described as targeting oil flows to China, Iran’s main oil buyer, to influence future talks.

Geopolitical Risk And Usd Demand

A two-week ceasefire remains, while Iran’s Revolutionary Guard warned that foreign naval vessels could be treated as a breach of the truce and would be “dealt with severely”. This backdrop has kept demand for the safe-haven US Dollar firm.

The US calendar is quiet on Monday, with focus turning to March US Producer Prices Index (PPI) on Tuesday after March Consumer Prices Index (CPI) data on Friday. The PPI is expected to support expectations for at least one Federal Reserve rate rise in 2026.

In Australia, Westpac Consumer Confidence on Tuesday may show the effect of the energy shock. March employment data later in the week is expected to inform near-term Reserve Bank of Australia policy expectations.

The plan to close the Strait of Hormuz creates significant uncertainty, which is why we are seeing the AUD/USD struggle around the 0.7060 level. This geopolitical tension has caused market volatility to spike, with the VIX index jumping from a low of 16 to over 24 in just a few trading sessions. For derivatives traders, this means option premiums are now much more expensive, reflecting the higher perceived risk in the market.

Trading Implications For Audusd

With roughly a fifth of the world’s daily oil consumption passing through Hormuz, any real disruption will cause a severe energy price shock. We saw a similar, though smaller, spike in oil prices back during the 2019 tensions, which shows how quickly this situation can impact global energy markets. This feeds directly into upcoming inflation data, like this week’s US PPI, and strengthens the case for the Federal Reserve to raise interest rates.

The Australian dollar is particularly vulnerable as it is considered a proxy for global risk sentiment and is highly dependent on China. Since this action is aimed at China, our largest trading partner, the economic fallout for Australia could be significant. This is especially concerning given that recent data showed China’s manufacturing activity in March already slowed, signaling a weakness that will directly impact demand for Australian exports.

Given these factors, we should consider strategies that benefit from a falling AUD/USD and rising volatility. Buying put options on the AUD/USD offers a way to position for downside, especially as the market is now pricing in over a 90% chance of a Fed rate hike by the third quarter while the Reserve Bank of Australia’s path is uncertain. Any weakness in this week’s Australian consumer confidence and employment data will likely accelerate the Aussie’s decline.

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