Daily Market Outlook, April 2, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Oil prices soared, while global risk sentiment once soured, following President Donald Trump’s stern warning that the U.S. would strike Iran "extremely hard" within the next two to three weeks. The statement dampened hopes for a swift resolution to the five-week-long Middle East conflict

Brent crude oil jumped as much as 6.9%, exceeding $108 per barrel, as ongoing clashes kept the critical Strait of Hormuz – a vital channel for global oil shipments – effectively closed, further tightening supply chains. Although Trump assured that the waterway would reopen "naturally" once tensions eased, he provided no timeline or details. The president's remarks also disrupted a budding global stock market recovery, fuelled by concerns that prolonged conflict could sustain elevated energy costs and hinder economic growth. Asian equities dropped sharply, with a regional index falling 2.2% and S&P 500 futures sliding 1.3%, signalling that the recent two-day market rebound might falter. European markets were also set to open with losses of around 2%. Trump’s comments injected fresh volatility into financial markets. The U.S. dollar strengthened, reaffirming its role as a safe-haven asset during geopolitical instability, while Treasury prices declined amid fears that soaring oil prices could spark inflationary pressures. The escalating conflict in Iran is fuelling concerns about rising inflation, adding weight to arguments for the Bank of Japan to consider hiking interest rates as early as this month, according to a former top economist at the BoJ. Toshitaka Sekine, who previously served as the bank’s chief economist, shared his perspective during an interview on Wednesday. "If the goal is to evaluate the situation thoroughly, I think April would be a reasonable time to act," Sekine remarked. "By the end of April, we should have a clearer sense of whether the ripple effects from the Middle East are temporary or more enduring." Earlier in the day, optimism had grown after Trump hinted at a possible resolution to the U.S.-Iran conflict within weeks. However, his more aggressive tone during a nearly 20-minute speech dashed hopes for a quick settlement. Trump's failure to outline a clear policy shift or provide specifics on future military actions left markets unsettled. The uncertainty has already driven several major stock indices into correction territory, prompting investors to retreat from riskier assets.

The Middle East conflict's inflationary impact has highlighted energy markets as a key transmission channel. However, the Russia-Ukraine war revealed another critical factor: inflation spreading through globally sensitive consumption categories like food, clothing, and furniture. Nine months after the Ukraine invasion, this category's contribution to CPI inflation surged disproportionately, driven by energy-intensive inputs like fertilisers, shipping, and petrochemical feedstocks, which amplified the shock via global supply chains. The current inflationary wave may see similar dynamics, with energy-intensive inputs showing heightened sensitivity. The closure of the Strait of Hormuz has increased shipping costs and extended voyage times, while tighter oil-natural gas linkages are straining ammonia-based fertiliser production. However, unlike the demand-driven inflation we saw in February 2022 as the economy recovered from the pandemic, today's lower demand and shaky confidence in a situation where prices are stabilising could reduce the impact on prices, especially

Friday’s March payrolls report (median forecast: +60k) is expected to show improvement from February’s weak reading (-92k), which Powell downplayed alongside January’s stronger print (+126k). A rebound in healthcare jobs may contribute to this increase, as physicians return after a labour dispute. However, the overall U.S. jobs market remains fragile, with gains concentrated in health and social care while the productive sectors continue shedding workers. Some attribute this to AI-driven productivity shifts and Trump-era migration policies, but JOLTS data on Tuesday revealed a significant drop in hiring levels. While the breakeven payroll rate may hover near zero, this limits broader growth, compounded by declining participation rates. Household survey volatility adds risk, with unemployment likely to tick up further, though forecasts currently expect it to remain at 4.4%.

Overnight Headlines

• Trump Declares ‘Decisive, Overwhelming Victory’ In Iran War

• Trump’s Renewed Iran Warning Risks More Volatility, Analysts Say

• Oil Extends Drop As Trump Seeks End To Energy-Roiling Iran War

• Gulf States Consider New Pipelines To Avoid Strait Of Hormuz

• Dollar Gains As Trump Sets No Clear Iran Ceasefire Timeline In Speech

• Former BoJ Chief Economist Sees Likelihood Of April Rate Hike

• Japan 10Y Sovereign Bond Sale Sees Weakest Demand Since May

• China Drains Cash From Economy In Rare Pullback During Oil Shock

• Australia's Trade Balance Widens More Than Expected In February

• Trump Expected To Overhaul Steel and Aluminium Tariffs

• Amazon In Talks To Buy Globalstar In $9B Bid To Rival Musk’s Starlink

• Anthropic Executive Sees Cowork Agent As Bigger Than Claude Code

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• EUR/USD: 1.1500 (€2.06B), 1.1650 (€1.51B), 1.1513 (€720M)  

• USD/JPY: 159.00 ($1.69B), 160.00 ($1.48B), 157.00 ($1.23B)  

• AUD/USD: 0.6800 (A$1.17B), 0.6900 (A$1.14B), 0.7025 (A$740.2M)  

• USD/CAD: 1.3705 ($720.2M), 1.3825 ($518.2M), 1.3635 ($434M)  

• USD/BRL: 5.3500 ($382.2M)  

• USD/CNY: 6.8200 ($605M), 6.8700 ($471.8M)  

• USD/KRW: 1480.00 ($409.3M), 1400.00 ($300M) .

CFTC Positions as of March 27, 2026: 

• Equity fund speculators have raised their net short position on the S&P 500 CME by 2,932 contracts, bringing the total to 329,428. Meanwhile, equity fund managers have decreased their net long position in the S&P 500 CME by 11,506 contracts, reducing it to 872,951. 

• Speculators have also reduced their net short position in CBOT US 5-year Treasury futures by 325,016 contracts, now at 1,448,436. In contrast, they have increased their net short position in CBOT US 10-year Treasury futures by 44,009 contracts, totaling 641,887. A rise in net short positions was also seen in CBOT US 2-year Treasury futures, up by 155,512 contracts to 1,638,179, and in CBOT US UltraBond Treasury futures, which rose by 8,050 contracts to 279,187. Additionally, speculators have cut their net long position in CBOT US Treasury bonds futures by 2,194 contracts, leaving it at 6,570. 

• The Bitcoin net long position stands at 2,106 contracts. The Swiss franc shows a net short position of -27,097 contracts, while the British pound's net short position is -58,422 contracts. The euro has a net long position of 9,279 contracts, and the Japanese yen reports a net short position of -62,806 contracts.

Technical & Trade Views

SP500

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 6400 Target 6700

• Below 6500 Target 6150

EURUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.1675 Target 1.1730

• Below 1.15 Target 1.1350

GBPUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 1.35 Target 1.3650

• Below 1.3485 Target 1.3150

USDJPY 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 159 Target 161.50

• Below 157 Target 156

XAUUSD

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 4500 Target 4850

• Below 4250 Target 4000

BTCUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 79.5k Target 81.5k

• Below 78k Target 53k