Headlines:

• Iran’s FM spokesperson: US proposals have mostly been ‘unrealistic and excessive’
• USDJPY falls below the key 160.00 handle amid intensifying verbal intervention
• Month-end flows point to dollar buying into the fix – BofA
• Dollar buying looks to be the flavour this month-end
• BOJ reaffirms that underlying inflation is rising moderately towards 2% level
• Bavaria March CPI +2.8% vs +1.9% y/y prior
• Euro area economic sentiment eases in March as Middle East conflict stokes inflation fears

Markets:

• WTI crude oil trades near three-week high at $101.67
• S&P 500 futures up 0.5%, European indices more mixed
• 10-year Treasury yields down 5 bps to 4.39%
• USD mostly higher, only USD/JPY down 0.5% to 159.55 amid Tokyo verbal intervention
• Gold up 0.8% to $4,530, Silver up 2% to $70.99

It was a quieter session in general as we continue to wait on further developments on the war in the Middle East.

US president Trump set a date for 6 April in getting a deal done while not striking at key Iranian energy facilities. But with today gone, that is one more day closer to the deadline. And still, it doesn’t seem like we are anywhere near with Iran reaffirming that the proposal by the US is something they can’t ascribe to.

Meanwhile, ground forces are beginning to move and that is something that could result in further escalation in the conflict. So, there is that.

Oil prices are keeping higher with WTI crude even hitting a three-week high of $103 earlier in the day before coming off slightly. Still, we are seeing prices hold up at around $101.67 currently. And with no change to the Strait of Hormuz situation, there is no change to the outlook that things will get more crippling for the oil market day by day.

Despite oil trading back above three figures, the risk mood remains calmer somewhat – at least for now. US futures are sitting higher while European indices are at least not bleeding out any further. That comes as 10-year Treasury yields also cool slightly with it being down 5 bps to 4.39%. As such, S&P 500 futures are up 0.5% but let’s see what Wall Street has to say later.

In FX, the dollar is mostly a little higher on the day with EUR/USD nudging down below 1.1500 and AUD/USD down 0.2% to 0.6855 currently. The only exception is USD/JPY, which is down 0.5% to 159.50 levels after some verbal intervention by Tokyo after the pair hit above 160.00 earlier in the day.

As we get into the new week, just be reminded that it is month-end and quarter-end as we look to wrap up March trading. That might be a factor in making things a bit more messy in terms of price action dynamics in the sessions ahead. So, just be wary of that.

This article was written by Justin Low at investinglive.com.