Daily Market Outlook, April 7, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Oil markets are on a knife-edge as Brent crude has surged past the $111 mark, climbing 1.2% amid volatile trading. The spike occurs as the global community closely monitors President Trump’s 8 p.m. ET Tuesday deadline for Iran to negotiate a peace settlement. The looming shadow of further escalation has largely drowned out the initial glimmer of hope offered by whispers of a potential truce. A sense of cautious anticipation currently characterises global markets as President Trump's deadline for a potential agreement with Iran looms. Following Iran's rejection of a ceasefire offer, tensions have escalated significantly. Tehran continues to demand a comprehensive resolution to the conflict that has paralysed the Strait of Hormuz—a critical global energy artery—triggering widespread market volatility and economic disruption. President Trump has intensified the pressure, warning of severe consequences for Iranian infrastructure should the deadline pass without compliance. His dismissal of concerns regarding the legality of such actions has further unsettled international investors. This geopolitical uncertainty has left global equities in a state of flux. Even impressive earnings from Samsung Electronics failed to lift market spirits as investors largely retreated to the sidelines, keeping the U.S. dollar stable. US stock futures fell 0.44%, while European markets signalled a muted opening following recent holiday breaks. Meanwhile, Brent crude has surged to $111 per barrel, marking a staggering 53% increase since the onset of the conflict. In currency markets, the Japanese yen is teetering near the 160 per dollar threshold, prompting speculation that Tokyo may intervene to support its weakening currency. However, with unwavering demand for the greenback, any such intervention may prove ineffective. As the day progresses, upcoming manufacturing data will provide a clearer picture of how the six-week conflict has impacted the European economy and whether fears of energy-driven inflation are justified. For now, the global financial community remains fixated on this critical turning point, which is poised to redefine market sentiment in the coming months.

Domestically, the UK's March DMP survey highlights a rise in one-year inflation expectations to 3.5%, though the three-year outlook remains stable at 2.8%. Geopolitical tensions have spiked business uncertainty to 57%, a 10-point monthly increase. The labour market is showing signs of cooling, with expected wage growth hitting a record low of 3.5% and employment projections remaining flat. For the Bank of England, the focus shifts from these immediate reactions to how persistent supply-side pressures will ultimately influence future wage-price dynamics.

The energy sector is currently experiencing a notable divergence as WTI crude’s rally fails to translate into gains for the S&P energy sector. This disconnect is underscored by ETF flow sensitivity to oil prices reaching multi-year lows, suggesting that investors perceive the ongoing Middle East conflict as a temporary disruption rather than a long-term shift. Both prediction markets and commodity options reinforce this sentiment, pricing in a near-term resolution and treating current price spikes as a fleeting fear premium. This lack of momentum is further exacerbated by the fact that prior sector rotation and short-covering had already left energy equities crowded before hostilities began, effectively capping any further upside. Consequently, high energy prices are increasingly viewed as a demand tax on the economy rather than a catalyst for industrial growth. Even if geopolitical tensions persist, structural factors indicate that the broader economic net effect will remain constrained.

Overnight Headlines

• Hopes Fade For Deal With Iran Ahead Of Tuesday-Night Deadline

• Trump Says Reopening Hormuz Must Be In Iran Ceasefire Deal

• Trump: Iran Could Be ‘Taken Out’ On Tue; Hegseth: Major Strikes To Come

• Trump: ‘I Can’t Tell You” Whether War Is Winding Down Or Escalating

• White House Says Increased Productivity Means Fed Can Cut Rates

• Fed’s Goolsbee, Hammack: Inflation Is Flashing ‘Orange,’ Or Worse

• Jamie Dimon Warns Of Higher Inflation, Interest Rates From Iran War

• IMF Chief: War In MidEast Will Lead To Slower Growth, Higher Inflation

• RBNZ Set To Extend Rate Pause, Keep Gauging Fuel Shock Fallout

• Japan 30Y Bond Sale Sees Weaker Demand Than 12-Month Average

• Japan’s Households Cut Spending Even After Real Wages Advance

• Samsung Profit Up Eight-Fold After AI Chip Sales Defy War Fears

• Amazon And US Postal Service Reach Delivery Deal

• OpenAI, Anthropic, Google Unite To Combat Model Copying In China

• Broadcom Confirms Deal To Ship Google TPU Chips To Anthropic

FX Options Expiries For 10am New York Cut 

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

• EUR/USD: 1.1000 (EU1.89b), 1.1500 (EU1.83b), 1.1800 (EU1.52b)

• AUD/USD: 0.7000 (AUD1.33b), 0.6800 (AUD981.9m), 0.7200 (AUD933.4m)

• USD/JPY: 159.00 ($806.5m), 160.00 ($777m), 160.25 ($750.3m)

• USD/BRL: 5.2500 ($862.8m), 5.1500 ($655m), 5.5000 ($411.3m)

• USD/MXN: 17.75 ($750.7m), 18.20 ($680m), 18.50 ($368.6m)

• GBP/USD: 1.3545 (GBP1.24b), 1.3000 (GBP933.8m), 1.3300 (GBP330.7m)

• USD/CAD: 1.3900 ($380.1m)

• EUR/GBP: 0.8700 (EU436.3m), 0.8740 (EU416.5m), 0.8550 (EU321.9m).

CFTC Positions as of April 3, 2026: 

• Speculators increase CBOT US 5-year Treasury futures net short position by 138,404 contracts to 1,586,840

• Speculators increase CBOT US 10-year Treasury futures net short position by 142,176 contracts to 784,063

• Speculators trim CBOT US 2-year Treasury futures net short position by 855 contracts to 1,637,324

• Speculators trim CBOT US UltraBond Treasury futures net short position by 11,058 contracts to 268,129

• Speculators switch CBOT US Treasury bonds futures to a net short position of 31,633 contracts (vs. 6,570 net longs a week ago)

• Bitcoin net long position is 2,253 contracts

• Swiss franc posts net short position of -29,871 contracts

• British pound net short position is -52,665 contracts

• Euro net long position is 507 contracts

• Japanese yen net short position is -72,872 contracts

• Equity fund speculators trim S&P 500 CME net short position by 113,496 contracts to 215,932

• Equity fund managers raise S&P 500 CME net long position by 39,730 contracts to 912,682.

Technical & Trade Views

SP500

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 6450 Target 6700

• Below 6400 Target 6150

EURUSD 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.1625 Target 1.1750

• Below 1.15 Target 1.1350

GBPUSD 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 1.35 Target 1.3650

• Below 1.3485 Target 1.3150

USDJPY 

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 159 Target 161.50

• Below 157 Target 156

XAUUSD

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 4500 Target 4850

• Below 4500 Target 4350

BTCUSD 

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 79.5k Target 81.5k

• Below 78k Target 53k