Investors and forex traders are focused on the March labor market data, which confirmed its resilience: unemployment fell to 4.3%, although experts had expected it to remain unchanged at 4.4%; nonfarm payrolls increased by 178.0K, significantly above the expected 65.0K, while the previous figure was revised from -92.0K to -133.0K; meanwhile, average hourly earnings slowed from 0.4% to 0.2% month-on-month instead of the expected 0.3%, and from 3.8% to 3.5% year-on-year against forecasts of 3.7%. Experts noted that the main job gains were concentrated in the healthcare sector, while the positive trend was largely driven by seasonal and weather-related factors. Against the backdrop of the published statistics, the US Federal Reserve may adopt a wait-and-see approach, keeping interest rates elevated for an extended period, and analysts at Citigroup Inc. now expect borrowing costs to be lowered by 25 basis points in September, October, and December rather than in June, July, and September as previously assumed. Geopolitical signals remain mixed: over the weekend, US President Donald Trump again issued an ultimatum to the Iranian authorities demanding that the Strait of Hormuz be reopened by Tuesday, stating that otherwise the Islamic republic’s energy and transport infrastructure would be destroyed. On the other hand, in an interview with Fox News, the politician acknowledged that negotiations with Tehran are currently underway and expressed optimism about concluding a peace agreement within 24 hours.
Eurozone
The euro is strengthening moderately against the yen and the US dollar, but weakening against the pound.
Today, Easter is being observed across the eurozone, so financial institutions are closed and investor activity is subdued. Meanwhile, Bank of Greece Governor Yannis Stournaras stated that the European Central Bank’s monetary stance will depend on the scale and nature of energy supply disruptions caused by the closure of the Strait of Hormuz: if the sharp rise in hydrocarbon prices proves temporary, no interest rate adjustment will be required in the near term, whereas tighter monetary policy should be expected if the impact is strong and prolonged, negatively affecting medium-term inflation expectations and wage dynamics.
United Kingdom
The pound is strengthening against the euro, the yen, and the US dollar.
Financial institutions in the United Kingdom are closed today for Easter, while investors are preparing for the release of March business activity data at 10:30 (GMT+2): the services PMI is expected to decline from 53.9 points to 51.2 points, and the composite PMI from 53.7 points to 51.0 points, which would confirm slower growth in the key sectors of the economy and put pressure on the national currency.
Japan
The yen is weakening moderately against the euro and the pound, but strengthening against the US dollar.
According to the Bank of Japan’s quarterly regional economic report, higher hydrocarbon prices and disruptions in energy transportation caused by the conflict in the Middle East could damage the economy, and in some prefectures companies are already feeling the effects of rising raw material prices and supply chain disruptions, while management fears increasing pressure on corporate profits and consumption. Meanwhile, representatives of most organizations stated that they intend to raise wages by the same amount as last year, although these plans may change if geopolitical tensions escalate.
Australia
The Australian dollar is strengthening against the yen, the euro, and the US dollar, but shows mixed dynamics against the pound.
Financial institutions in Australia are closed for Easter, while investors are assessing comments by Energy Minister Chris Bowen, who stated that the government has secured fuel supplies through the end of May, whereas previously they had only been guaranteed until mid-April. The official also called for the Strait of Hormuz to be reopened as soon as possible in order to minimize the economic consequences for the country and the rest of the world, and noted that government reserves contain enough gasoline for 39 days, diesel fuel for 29 days, and aviation kerosene for 29 days, which roughly corresponds to the level seen at the start of the US-Iran conflict.
Oil
Morning gains in oil prices gave way to a decline, but overall the sector remains under the influence of a number of contradictory geopolitical signals.
Thus, US President Donald Trump stated his intention to intensify attacks on Iran’s energy and transport facilities if the Strait of Hormuz is not reopened by Tuesday; however, Reuters sources in Pakistan report that a peace agreement may be concluded in the near future. According to them, a two-stage plan has already been developed, providing for an immediate ceasefire for 15-20 days, the reopening of free navigation through the waterway, and further settlement of the remaining issues at talks in Islamabad. The agreement is expected to include Iran’s commitment not to develop nuclear weapons in exchange for sanctions relief. Officials from the United States and the Islamic republic declined to comment on this information.
