Markets steady as Iran uncertainty lingers and policymakers stay cautious

Forex Market

Global markets ended the week on a firmer footing as hopes for a temporary easing in Middle East tensions supported risk sentiment, although investors remained cautious amid uncertainty surrounding a longer-term resolution between the US and Iran. Oil prices retreated from recent highs after reports of a potential ceasefire extension and progress toward reopening key shipping routes, helping ease immediate inflation concerns. However, notes that markets are not fully pricing in a lasting peace agreement, with traders remaining sensitive to any setback in negotiations. Equity markets continued to find support from strong technology sector performance, while volatility measures declined as expectations grew that both sides remain motivated to avoid a broader escalation.

In Australia, softer-than-expected inflation data has reduced expectations for further near-term policy tightening, although underlying price pressures remain widespread across the economy. Notes that while lower fuel costs and government subsidies have provided some relief, a significant share of the inflation basket continues to run above target levels, suggesting the disinflation process remains incomplete. Attention now turns to upcoming GDP and labour market data for clearer signs on economic momentum. Meanwhile, Japan revealed it spent a record ¥11.7 trillion intervening in currency markets over the past month to support the yen as it once again approached the psychologically important ¥160 per US dollar level. Despite the scale of intervention, the currency remains under pressure from elevated energy costs and the Bank of Japan’s gradual approach to policy normalisation.

General Market

Wall Street

Dow Jones: +0.72% to 51,037
S&P 500: +0.22% to 7,580
Nasdaq: +0.33% to 30,323

Asia-Pacific

ASX 200: -0.33% to 8,721
Nikkei: +1.47% to 67,183
Shanghai Composite: -0.72% to 4,678

Europe

FTSE: +0.13% to 10,380
DAX: +0.05% to 25,104
CAC: -0.31% to 8,161

Headlines to Watch

United States

NFP + unemployment → core driver of Fed policy expectations
ISM Services PMI → inflation persistence and growth signal
JOLTS + ADP employment → labour market momentum check
Fed speakers → guidance ahead of next FOMC meeting

Europe

Eurozone CPI → key input for ECB rate outlook
Eurozone unemployment rate → labour market resilience test
ECB commentary → focus on timing of future policy moves

Asia-Pacific

Australian Q1 GDP → major RBA policy indicator
Australian trade balance → demand and commodity export trends
Japan yen volatility → intervention and BOJ policy risks
China PMI data → regional growth and demand signal
New Zealand trade indicators → export sector health check

Global / Geopolitics

US-Iran negotiations remain unresolved
Oil price volatility continues to influence inflation outlook
Shipping and energy supply risks remain in focus
Global central banks balancing growth concerns against inflation pressures

Currency Pair	Mid-market Rate
AUD/USD	0.7183
AUD/NZD	1.2023
AUD/JPY	114.47
AUD/CNY	4.8611
AUD/EUR	0.6169
AUD/GBP	0.5341
AUD/HKD	5.6293

Markets steady as Iran uncertainty lingers and policymakers stay cautious

Forex Market