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DBS Group Research sees South Korea’s March exports remaining in double-digit growth, supported by strong AI and data centre demand, higher memory prices and supply shortages, leading to a wider trade surplus despite rising import costs. CPI is projected around 2.3% year-on-year, above target, prompting government measures including fuel caps, reserve releases, energy-saving campaigns and a KRW 25 trillion supplementary budget.

Robust exports but inflation stays above target

"South Korea: March trade and CPI data will be the key focus this week, marking the first set of economic releases following the outbreak of the Iran conflict."

"Export growth is expected to remain robust in double-digit territory and accelerate from Jan–Feb levels, supported by strong global demand for AI and data center infrastructure, rising memory chip prices, and ongoing supply shortages."

"This strength is likely to offset faster import growth driven by higher oil and LNG costs, resulting in a widening trade surplus in March."

"On the inflation front, CPI is expected to remain above the 2% threshold and edge higher to around 2.3% yoy in March, reflecting the combined impact of rising global energy prices and the depreciation of the KRW."

"In response, the government has introduced a series of measures to stabilize prices and mitigate the effects of the Iran conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• The Dow fell over 1% on Friday and entered correction territory, down 10% from its recent high.
• Brent crude surged above $110 per barrel after incidents in the Strait of Hormuz disrupted tanker flows.
• University of Michigan consumer sentiment fell to 53.3, while one-year inflation expectations jumped to 3.8%.
• Rate futures markets priced in a greater than 50% probability of a Federal Reserve rate hike by year-end for the first time.

The Dow Jones Industrial Average (DJIA) tumbled on Friday, shedding roughly 510 points or 1.1% to fall below 45,500 and officially enter correction territory. The S&P 500 lost around 1%, bringing its decline from its record high to over 8%, while the Nasdaq Composite dropped 1.3% after entering correction territory a day earlier. Friday's slide capped a fifth consecutive weekly decline for the broad market, the longest losing streak since 2022, as Strait of Hormuz disruptions and fading confidence in a diplomatic resolution with Iran kept risk appetite firmly in check.

Strait of Hormuz disruptions rattle energy markets

Oil prices surged on Friday as shipping through the Strait of Hormuz came under direct threat. Iran's Islamic Revolutionary Guard Corps (IRGC) said the waterway is effectively closed and warned that any movement through it would face a harsh response. Two Chinese-flagged vessels were turned away early Friday, and a Thai-flagged cargo ship that was struck in the strait ran aground, according to Iranian state media. International benchmark Brent crude jumped around 3% to trade above $110 per barrel, while US West Texas Intermediate (WTI) climbed roughly 4% to near $100. The disruption to what is the world's most critical Oil chokepoint is the most tangible supply threat since the US-Iran conflict began on February 28.

President Trump extended his deadline to resume strikes on Iranian energy infrastructure to April 6, posting on Truth Social that talks are "ongoing" and "going very well." Markets were unimpressed. Iran's foreign minister reportedly told state media this week that Tehran has no intention of holding direct talks with the US, and The Wall Street Journal reported the Pentagon was considering deploying an additional 10K troops to the Middle East.

Consumer sentiment drops as inflation expectations spike

The University of Michigan (UoM) consumer sentiment survey for March painted a bleak picture. The headline index fell to 53.3 from 55.5 in February, missing the consensus estimate of 54 and marking its lowest reading in months. The expectations component was even weaker, tumbling 8.7% to 51.7 against a consensus of 54.1. Most concerning for markets was the one-year inflation expectations reading, which jumped to 3.8% from 3.4% the prior month, well above the 3.4% consensus. Five-year expectations held steady at 3.2%.

The combination of deteriorating consumer confidence alongside rising inflation expectations feeds directly into the stagflation narrative that has increasingly gripped Wall Street since the Iran war pushed Oil prices above $100 earlier this month. The Organisation for Economic Co-operation and Development (OECD) added fuel to that concern this week, raising its US inflation forecast for 2026 to 4.2% — far above the Federal Reserve's (Fed) own projection of 2.7%.

Rate hike odds cross 50% for the first time

In what may be the most significant shift in rate expectations since the Iran conflict began, traders in the futures market pushed the probability of a Fed rate hike by the end of 2026 to 52% on Friday morning, according to the CME FedWatch tool. It was the first time the threshold had crossed 50%, a remarkable turnaround from the start of the year when three rate cuts were fully priced in. The Fed currently holds its target rate at 3.50% to 3.75% after pausing at its March meeting, with the next Federal Open Market Committee (FOMC) decision on April 29-30.

Surging energy prices, the Bureau of Labor Statistics (BLS) reporting that import prices jumped 1.3% in February, and a strengthening US Dollar have all contributed to the hawkish repricing. Gold, typically a beneficiary of uncertainty, remained under pressure near $4,400 per ounce, well off its January record highs, weighed down by rising real yields and the prospect of tighter monetary policy.

Tech stocks extend losses on legal and AI headwinds

The technology sector continued to bear the brunt of the risk-off mood. Meta (META) fell around 2.4% on Friday after plunging nearly 8% on Thursday following a landmark jury verdict in Los Angeles that found both Meta and Alphabet (GOOGL) negligent in a social media addiction lawsuit. A separate New Mexico jury hit Meta with $375 million in civil penalties earlier in the week. The rulings, which both companies plan to appeal, represent a potential shift in legal liability for tech platforms and could influence thousands of similar cases. Alphabet slipped around 1.3%, while Microsoft (MSFT) shed roughly 2%. Memory chip stocks extended their selloff after Alphabet's new TurboQuant algorithm showed it could significantly reduce the amount of memory required by artificial intelligence models, hitting Micron Technology (MU) particularly hard: shares have dropped nearly 20% over the past five trading days. China's decision to open a trade probe against the US in retaliation to tariffs added another layer of pressure on global tech supply chains.

Energy and defensives outperform in risk-off session

While the broader market sank, pockets of strength emerged in corners of the market that benefit from elevated Oil prices and defensive positioning. Chevron (CVX) gained over 1%, continuing a strong run for the energy sector since the Iran conflict began. Verizon (VZ) and Walmart (WMT) also posted modest gains on the session, reflecting a rotation into lower-beta names as investors brace for more volatility heading into the weekend. The CBOE Volatility Index (VIX) spiked above 27, up roughly 8%, underscoring the elevated level of fear across markets. With the Trump administration's extended April 6 deadline looming and no clear path to a diplomatic resolution in sight, traders face another weekend of headline risk. Next week brings the end of the quarter, where portfolio rebalancing could add to choppiness, and the March Nonfarm Payrolls (NFP) report on April 3 will provide the next major read on the labor market.

Dow Jones five-minute chart

• NZD/USD posts a fourth consecutive daily decline as geopolitical tensions weigh on sentiment.
• Consumer confidence in New Zealand drops sharply, reflecting uncertainty linked to the Middle East war.
• Monetary policy expectations shift as central banks monitor the inflation impact of energy prices.

NZD/USD falls for the fourth consecutive day and trades around 0.5750 on Friday, down 0.17% at the time of writing, pressured by renewed risk aversion and the resilience of the US Dollar (USD).

The New Zealand Dollar (NZD) faces headwinds from a tense global backdrop marked by escalating geopolitical risks in the Middle East. US President Donald Trump’s decision to temporarily pause planned strikes on Iranian energy infrastructure for ten days provides only limited relief, as markets remain concerned about the lack of a clear path toward de-escalation. The shutdown of the Strait of Hormuz by Iran adds to these concerns, supporting energy prices and fueling inflation fears.

In this environment, the US Dollar maintains a bullish bias, supported by its safe-haven status. Higher US yields, with the 10-year Treasury hovering near 4.45%, are also reinforcing the USD’s appeal.

US economic data paints a mixed picture. The University of Michigan Consumer Sentiment Index declined to 53.3 in March from 55.5 previously, signaling growing pessimism among households. At the same time, one-year inflation expectations rise to 3.8%, highlighting persistent concerns about inflationary pressures.

Officials from the Federal Reserve (Fed) maintain a cautious tone. Fed Vice Chair Philip Jefferson said that higher energy prices should have only a modest impact on inflation, although a prolonged shock could prove more significant. Meanwhile, Fed Governor Michael Barr warned that another price shock could lift inflation expectations, reinforcing the case for policymakers to carefully assess economic conditions before adjusting policy.

In New Zealand, household confidence deteriorated significantly. The ANZ-Roy Morgan Consumer Confidence Index dropped to 91.3 in March from 100.1 in February, reflecting the impact of geopolitical uncertainty. The decline weighs on the country’s economic outlook and complicates the policy path for the Reserve Bank of New Zealand (RBNZ).

Governor Anna Breman noted that the central bank may look through temporary energy-driven inflation but stands ready to raise interest rates if persistent pressures risk unanchoring inflation expectations. Since the conflict began, markets have increasingly priced in the possibility of earlier tightening.

Overall, the combination of a firm US Dollar, rising Treasury yields and deteriorating global sentiment continues to pressure the Kiwi.

ING’s Deepali Bhargava warns that higher Oil prices and supply disruptions are worsening growth, inflation and external balances in the Philippines. The report highlights rising odds of a Bangko Sentral ng Pilipinas (BSP) rate hike as inflation breaches target, but stresses that tighter policy alone is unlikely to change the Philippine Peso’s trajectory against the Dollar in coming months.

Oil shock drives inflation and policy dilemma

"The oil shock has forced the Philippines to declare a national emergency as crude shortages and surging pump prices accentuate the downside risks to growth. We have cut our growth forecast accordingly. While inflation is set to breach the target, raising the odds of a rate hike, monetary tightening alone is unlikely to notably change the peso's trajectory."

"With Brent crude prices up roughly 40% month‑on‑month in March, headline inflation is now likely to exceed the target band even under our base case. This implies that CPI could breach 4% as early as March, raising the probability of a rate hike as early as April."

"Given this weaker growth setting, and assuming the current conflict eases soon, our base case is that the BSP remains on hold in April."

"That said, if oil prices stay above $100/bbl in our longer-war scenario, and with limited signs of de‑escalation in the ongoing conflict, the BSP may be compelled to consider raising rates as soon as April."

"This deterioration heightens depreciation risks for the Philippine peso. The BSP’s recent guidance – that it is not defending any specific exchange‑rate level and that intervention in the FX market remains modest – suggests limited resistance to further currency weakness."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Standard Chartered’s Dan Pan and Erwin He note that Banxico’s surprise 25 bps cut and guidance for another easing step have increased downside risks for the Mexican Peso (MXN). They highlight crowded MXN long positioning and a narrower carry advantage versus other EM high-yielders. The bank now sees short MXN positions as increasingly attractive given weak domestic growth momentum.

Peso seen vulnerable after surprise easing

"We see a risks of further downside pressure on MXN, and we like USD/MXN as an EM risk hedge with upside convexity in case of a re-escalation of the Middle East conflict."

"We suspect that MXN long positioning remains crowded, particularly among CTAs and longer-term investors."

"MXN’s carry advantage has narrowed relative to EM high-yielding peers, and with Banxico signalling another cut and looking through concerns about inflation pass-through from FX weakness, we think short MXN positions may start to look more attractive to market participants, particularly with domestic growth momentum remaining weak."

"Risks are biased towards more rate cuts as growth momentum remains clouded by uncertainty over re-negotiation of the USMCA trade deal."

"That said, the continued inflation run-up may constrain room for additional easing."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• GBP/USD clings to 1.3300 as haven demand keeps the US Dollar supported.
• UK Retail Sales slump and BoE caution weigh on Sterling sentiment.
• Markets now see both the Fed and BoE leaning further hawkish.

The British Pound (GBP) holds firm during the North American session on Friday, clings above the 1.3300 figure, yet seems poised to finish the week with 0.20% losses against the US Dollar (USD). Risk aversion due to an energy shock caused by the Middle East conflict and the haven appeal of the Greenback keep GBP/USD on its way to monthly losses of more than 1%.

Sterling eyes weekly loss as Oil, war worries sour sentiment anew

On Thursday, US President Donald Trump announced a delay in attacks on Iran’s energy facilities for 10 days, until April 6. Initially, the markets cheered the move as Oil prices fell. Nevertheless, WTI reversed the initial drop as traders faded the news.

Hence, sentiment remains dismal, with Wall Street posting losses and the Greenback poised to finish the week with gains of over 0.45%, according to the US Dollar Index (DXY). The DXY, which tracks the buck’s performance versus six other currencies, is at 99.94, virtually unchanged for the day.

Adding to the sour mood was the fact that the Islamic Revolutionary Guard Corps (IRGC) shut off the Strait of Hormuz.

Data from the US showed that American consumers had grown pessimistic about the economy, as the University of Michigan Consumer Sentiment Index dipped from 55.5 to 53.3, below forecasts of 54. Inflation expectations for the next twelve months jumped from 3.4% in February to 3.8%, while for the five years were unchanged at 3.2%.

In the UK, Retail Sales fell in February following January's strong performance, coming in at -0.4% MoM, a collapse from the previous month's 2% growth.

Aside from this, Bank of England’s Alan Taylor said the bar for hiking interest rates is quite high, revealing that holding rates is preferable until the central bank assesses the impact of Iran’s war on the economy.

Traders expect further tightening by central banks

This week, money markets had priced out the possibility of rate cuts by the Federal Reserve and the Bank of England. Instead, they see the Fed raising rates by 5 basis points towards year-end. The BoE is projected to increase rates by 78 basis points, according to Prime Market Terminal data.

(This story was corrected on March 27 at 16:25 GMT to say that the University of Michigan Consumer Sentiment Index dipped to 53.3, not 53.5, that 5-year inflation expectations remained unchanged at 3.2% and that UK Retail Sales for January came in at 2%, not 1.8%.)

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3311. The near-term bias is mildly bearish as spot holds below the clustered simple moving averages near 1.35 and remains capped by the descending resistance line from 1.3869, which has contained every rebound since the recent 1.38 area highs. Price slipping back inside the broad contracting formation between that downtrend line and the still-rising support line from 1.3035 signals fading upside momentum, while the latest downtick in the Fed Sentiment Index above 119.000 hints that relative policy expectations continue to favor the dollar at the margin.

Immediate resistance stands at the descending trend line currently intersecting just above 1.3400, followed by the 1.3500/1.3520 zone where the daily moving averages converge and prior swing highs cluster. A daily close above that confluence would weaken the bearish bias and expose the 1.3700 region, ahead of the 1.3869 high. On the downside, initial support emerges at 1.3220, the latest swing low, with further traction expected around 1.3100 aligned with the rising trend line from 1.3035. A break beneath that structural floor would confirm a deeper bearish extension toward the psychological 1.3000 handle.

(The technical analysis of this story was written with the help of an AI tool.)

• WTI Oil prices surge as fears of a prolonged Middle East conflict intensify.
• Conflicting signals from Washington and Tehran keep uncertainty elevated.
• Supply risks and the Strait of Hormuz disruption sustain a strong geopolitical premium.

West Texas Intermediate (WTI) US Oil rises sharply and trades around $96.00 at the time of writing on Friday, up 3.55% on the day. The Oil market remains driven by heightened geopolitical uncertainty, as investors increasingly price in a prolonged conflict involving Iran, with potential long-term disruptions to global energy supply.

After a brief easing of sentiment following Tehran’s decision to allow several Oil tankers to pass, optimism quickly faded. Military strikes continue across the region, while conflicting statements make the diplomatic outlook harder to assess. US President Donald Trump says negotiations are going “very well”, while Iranian officials state they are still awaiting Washington’s response to ceasefire conditions.

At the same time, the Wall Street Journal reports that the Pentagon is considering deploying an additional 10,000 troops to the Middle East, fueling fears of a broader military escalation. A deeper US involvement would increase the likelihood of a prolonged closure or disruption of the Strait of Hormuz, a critical chokepoint for global Oil shipments, thereby supporting prices.

ING analysts note that risks remain tilted to the upside despite the extension of deadlines related to energy infrastructure. According to the bank, around 8 million barrels per day are already affected, while a much larger volume of supply remains exposed to potential disruptions. ING believes this situation is keeping a significant geopolitical premium embedded in energy prices.

Meanwhile, Nordea’s Jan von Gerich highlights that despite recent volatility, Oil prices have not yet reached new highs, suggesting that a de-escalation scenario is still possible, although its probability has declined.

In this environment, Oil prices remain highly sensitive to geopolitical developments, and the absence of a clear de-escalation continues to support expectations of elevated prices over a prolonged period.

• Gold edges higher as the US Dollar eases, but geopolitical tensions keep markets volatile.
• Oil-driven inflation risks lift interest rate hike expectations across major central banks.
• Technically, XAU/USD stabilizes around recent lows, but the near-term trend remains weak.

Gold (XAU/USD) edges higher on Friday, rebounding after falling nearly 2.75% the previous day, as evolving geopolitical headlines around the US-Israel war with Iran continue to drive volatility across global markets. At the time of writing, XAU/USD is trading around $4,527, up over 3.00% on the day.

Meanwhile, a modest pullback in the Greenback is also offering support, with the US Dollar Index (DXY) easing after briefly climbing above the 100.00 mark earlier in the day.

The University of Michigan’s March data showed a mixed picture. Consumer Sentiment Index came in at 53.3, below expectations of 54 and down from the previous 55.5. The Consumer Expectations Index also declined to 51.7 from 54.1. Meanwhile, 1-year inflation expectations rose to 3.8% from 3.4%, while the 5-year outlook remained steady at 3.2%.

Trump pauses strikes on Iran's energy plants, but uncertainty lingers

US President Donald Trump announced a delay in planned military strikes targeting Iran’s energy infrastructure. The deadline, initially set to expire on Friday, has now been extended by 10 days. In a post on Truth Social, Trump said that “As per Iranian Government request” he would pause the strikes until “April 6, 2026, at 8 P.M., Eastern Time,” adding that “talks are ongoing.”

However, the move did little to calm market nerves. While the delay may reduce some immediate escalation risk, it offers limited clarity on a path toward resolution, particularly as Iran continues to push back against negotiations. Meanwhile, The Wall Street Journal reported on Thursday that the Pentagon is considering sending additional 10,000 ground troops to the Middle East, keeping the risk of further escalation alive if no resolution is reached.

Oil-driven inflation fears reshape interest rate expectations

The Strait of Hormuz remains a key focal point of the ongoing conflict and continues to face significant restrictions, keeping Oil prices elevated. Against this backdrop, Gold is behaving more like an interest rate-sensitive asset rather than a traditional haven, as Oil-driven inflation risks are prompting traders to price in potential rate hikes across major central banks, including the Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BoE).

According to the CME FedWatch Tool, markets are pricing out any rate cut this year and are betting on a 50% chance of higher borrowing costs by the end of 2026, compared with the 2-3 cuts projected before the US-Iran war started.

Firm US Dollar and rising yields weigh on Gold

The hawkish rate repricing of Fed rate cut expectations is pushing US Treasury yields higher across the board, with the 10-year benchmark rising to around 4.45%, its highest level since July 2025. This is weighing on Gold, as rising yields increase the opportunity cost of holding non-yielding assets.

At the same time, the US Dollar (USD) remains broadly firm amid escalating tensions, benefiting from its status as the world’s primary reserve currency, adding further pressure on the bullion. As both Oil and Gold are priced in USD, rising Oil prices tend to support the Greenback, in turn limiting Gold’s upside.

Looking ahead, focus shifts to the Fed speakers, including Richmond Fed President Tom Barkin, Philadelphia Fed President Anna Paulson, and San Francisco Fed President Mary Daly, as markets look for clues on the monetary policy path.

Technical analysis: Sellers remain in control below key resistance levels

From a technical perspective, XAU/USD is showing early signs of stabilization after briefly slipping to four-month lows near $4,100 earlier this week. However, the near-term outlook remains tilted to the downside, with price trading below key moving averages on both the hourly and daily charts.

On the 4-hour chart, the bearish structure remains intact, with price holding below the 50- and 100-period Simple Moving Averages (SMA), both of which continue to slope lower, indicating persistent downside pressure.

The Relative Strength Index (RSI) has turned higher to 53 from mid-40s, and the Moving Average Convergence Divergence (MACD) line advances above the Signal line in positive territory with an expanding histogram, suggesting recovering upside momentum

On the upside, the 50-period SMA at $4,581 acts as immediate resistance, followed by the 100-period SMA near $4,843. On the downside, $4,300 serves as immediate support, with the weekly swing low around $4,098 as the next key level to watch.

Federal Reserve (Fed) Richmond President Thomas Barkin said on Friday that it is prudent to keep interest rates steady for now, as policymakers await greater clarity on the economic outlook. His remarks highlighted rising uncertainty from geopolitical tensions, evolving inflation risks and rapid changes driven by artificial intelligence.

Additional quotes:

"pace and uncertainty of changes around ai have made a lot of fed officials 'uneasy'

war, fast changes due to artificial intelligence have again clouded economic outlook

even before oil shock, progress on inflation was at risk of stalling

higher gasoline prices hit consumer sentiment, can crowd out other spending

says he will be watching inflation and expectations data carefully

demand has been steady but continues to feel 'narrow,' based on ai investment and wealthier households

unemployment rate is low, but labor market feels 'fragile;' firms see little wage pressure, multiple applicants for each job"