The energy supply shock has had a large impact on near-term inflation compensation in the euro areaLonger-term inflation compensation had remained broadly stableDespite strong increases in spot prices for oil and gas, it was argued that energy markets could still be seen as rather sanguine about the situationThe strong backwardation of futures prices seemed to suggest that a normalisation of global oil and gas supply within the next few months remained a realistic prospectHowever, even if there was a rapid resolution of the conflict, it could still take several months for supply through the Strait of Hormuz to be fully restoredOverall, the war was creates significant uncertainty and constitutes a negative supply shock, pushing up inflation and dampening economic activity in the coming monthsMembers assessed that the risks to the growth outlook were tilted to the downside, especially in the near-termMembers assessed that the risks to the inflation outlook were tilted to the upside, especially in the near-termWith respect to the communication of the scenarios, members agreed that the baseline, adverse and severe scenarios should all be publishedIt was agreed that ECB staff would regularly update the scenario analysis with new informationThe implications for medium-term inflation were very hard to gauge at this stage, partly because of fundamental uncertainty over the evolution of the war and highly volatile energy marketsBut all members viewed the risks surrounding the inflation outlook as tilted to the upside relative to the baseline staff projectionsIt was highlighted that the risk of second-round effects was state-contingentOn monetary policy, the option value of waiting was high on this occasion and it was therefore appropriate to leave policy rates unchangedMeeting-by-meeting and data-dependent approach still allows for sufficient flexibility to react at short notice if necessaryFull account, This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The energy supply shock is shaking up inflation expectations in the euro area, and here’s why that matters for traders right now: With spot prices for oil and gas surging, traders need to watch how this affects inflation compensation metrics. The current backwardation in energy markets suggests that while immediate supply concerns are pressing, longer-term outlooks remain stable. This could lead to volatility in related assets, especially those tied to energy stocks and commodities. If inflation expectations rise sharply, central banks might respond with tighter monetary policy, impacting forex pairs like EUR/USD. Keep an eye on key technical levels in these pairs, as a break below recent support could trigger further selling pressure. On the flip side, the market’s sanguine attitude towards longer-term inflation could be misleading. If energy prices continue to rise, we might see a shift in sentiment that could catch many off guard. Watch for any shifts in the backwardation trend, as a move towards contango could signal easing supply concerns and impact trading strategies across the board. 📮 Takeaway Monitor EUR/USD closely; a break below key support levels could signal increased volatility driven by inflation fears.

FUNDAMENTAL OVERVIEWThe Nasdaq surged into a new all-time high amid US-Iran deal optimism. The US-Iran war has been pushing the market lower on negative growth expectations and as those expectations now get repriced on the positive side, the stock market has room to run. The playbook is very similar to April 2025. The second round of negotiations were expected to begin today but we never had an official date. They are expected to happen before the April 22 ceasefire deadline though. In the meantime, we got reports that US and Iranian negotiators made progress in talks on Tuesday and they were moving closer to a framework agreement to end the war. A US official has also mentioned that if a framework agreement is reached, the ceasefire would need to be extended to negotiate the details of a comprehensive deal.Everything now hinges on US-Iran talks. If negotiations were to break down again, we might see a selloff, but as long as the ceasefire holds, the downside should remain limited. On the other hand, a peace deal might give the Nasdaq another boost to push into new highs although a “sell the fact” type of reaction remains a risk given the extreme positioning.NASDAQ TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see the Nasdaq surged into a new record high after an incredible rally since the start of April. We can expect the sellers to step in if the price falls back below the 26,400 level to position for a drop into the 25,500 level. The buyers, on the other hand, will likely increase the bullish bets here to keep pushing into new highs, although a pullback would offer a better risk to reward setup.NASDAQ TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have a couple of trendlines that could act as support for dip-buyers. In fact, if we get a pullback from the all-time highs, we can expect the buyers to lean on the first trendline with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break lower to extend the pullback into the next trendline where we should find again the dip-buyers.NASDAQ TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have yet another minor trendline defining the bullish momentum on this timeframe. The buyers will likely continue to lean on it with a defined risk below it to keep pushing into new highs, while the sellers will look for a break to extend the pullback into the next trendline. The red lines define average daily range for today. UPCOMING CATALYSTSToday we get the latest US Jobless Claims figures, but the focus remains on US-Iran headlines. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The Nasdaq hitting an all-time high signals a shift in market sentiment, and here’s why that matters: Optimism surrounding a potential US-Iran deal is reshaping growth expectations, which could lead to a broader risk-on environment. Traders should note that this shift might not just affect equities; it could also ripple through commodities and currencies, especially those tied to geopolitical stability. If the Nasdaq continues to rally, it could push investors to seek higher-risk assets, potentially benefiting sectors like tech and energy. Watch for key resistance levels in the Nasdaq; if it holds above recent highs, it could trigger further buying momentum. However, be cautious—this optimism could be short-lived if geopolitical tensions escalate again or if economic data disappoints. On the flip side, if traders are overly bullish, a sudden reversal could lead to sharp corrections. Keep an eye on the upcoming economic indicators and market reactions to any news from the US-Iran negotiations, as these could dictate short-term volatility and trading strategies. 📮 Takeaway Monitor the Nasdaq’s resistance levels closely; a sustained rally could signal broader market gains, but geopolitical risks remain a key watchpoint.

Poor data re the property sector from China once again. China’s stats people say:In March 2026, home prices in Tier-1 cities rose m/m,declines in Tier-2 and Tier-3 cities narrowed or stabilizedmore cities saw m/m gains in both new and existing home pricesthe number of cities seeing month-on-month increases in both new and existing home prices rose from the previous month. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight China’s property sector data shows mixed signals, but here’s why it matters for traders: the stabilization in Tier-2 and Tier-3 cities could indicate a potential rebound in consumer confidence. While Tier-1 cities are seeing price increases, the broader market’s health hinges on the performance of these secondary cities. If they continue to stabilize or improve, it could lead to increased investment and spending, impacting commodities and related markets. Traders should keep an eye on how these trends affect the yuan and commodities like copper, which are sensitive to Chinese economic health. Watch for key price levels in related assets; if Tier-2 cities show consistent growth, it might signal a shift in market sentiment. However, skepticism is warranted. Past recoveries in China’s property market have often been short-lived, and external factors like global economic conditions could derail any positive momentum. Keep an eye on upcoming economic indicators and sentiment shifts that could influence trading strategies in the near term. 📮 Takeaway Monitor the performance of Tier-2 cities closely; consistent gains could signal a shift in market sentiment impacting related assets like copper and the yuan.