The Strait of Hormuz was hit again, analysis of short-term trend of spot gold, silver, crude oil and foreign exchange on March 31

Global market overview

1. European and American market conditions

The three major U.S. stock index futures all rose, with the Dow futures rising by 1.01%, the S&P 500 futures rising by 0.98%, and the Nasdaq futures rising by 0.94%. Germany's DAX index rose 1.15%, Britain's FTSE 100 index rose 0.93%, France's CAC 40 index rose 0.59%, and the European Stoxx 50 index rose 0.66%.

2. Interpretation of market news

The Strait of Hormuz was hit again, Iran said that the United States and Israel attacked the Qeshm Island pier

⑴ According to Iran’s official news agency, Iran accused the United States and Israel of launching an attack on a dock on the country’s Qeshm Island in the Strait of Hormuz. The attacked Bahman Terminal was located on the east side of the island, and no casualties were caused. ⑵ Military analysts pointed out that Qeshm Island is strategically located at the entrance to the strait, making it a potential target. Iran can use the island to control the passage of ships in this key waterway. ⑶ There is also a large desalination facility built on the island. Iran had previously accused the United States of launching an attack, but the United States denied it. The Israeli military and the U.S. Central xmaccount.command have not yet responded to the incident.

Financial pressure at the end of the quarter pushed up overnight interest rates, and the Fed's repurchase facility became a key cushion

⑴Financial pressure at the end of the quarter xmaccount.combined with the liquidity drain caused by the settlement of US$45 billion in Treasury bonds pushed the overnight repo rate up 6 basis points, opening at 3.73%. Funds raised from asset sales and liquidity injected by the Fed's bond purchase operations are still the dominant force, and the upward momentum in overnight interest rates is expected to be difficult.to last. ⑵ Judging from historical rules, the overnight repurchase rate is expected to return to the 10-day moving average of 3.676%. The Federal Reserve's repurchase operation has set an execution interest rate of 3.75%, providing an important buffer for the market. The results of this morning's and afternoon's repurchase operations will be announced at 20:30 Beijing time and 1:45 the next day respectively. (3) Treasury bond repurchase spreads of various maturities are divergent. The premiums over the overnight repurchase rates for the 2-year and 5-year bonds have narrowed to zero. The 10-year premium is 23 basis points, and the 20-year premium is 13 basis points. Federal funds futures show that the probability of a 25 basis point interest rate hike at the April or June meeting is only 3%. ⑷ In the short-term interest rate swap market, the 0x3 period OIS reported 3.649%. Based on the 10-day average SOFR interest rate of 3.63%, the implied probability of a 25 basis point interest rate hike in the next 90 days is about 8%. SOFR futures prices rose across the board, with the blue contract leading the rise, echoing the intraday oil price's fall from the 1.8% increase in early trading.

Indonesia raised 40 trillion Indonesian rupiah in bond issuance, and the yields of each maturity are significantly different

⑴ Data released by the Indonesian Ministry of Finance showed that the country successfully raised 40 trillion Indonesian rupiah through debt auctions, of which the weighted average yield of each maturity of short-term treasury bills ranged from 4.90% to 5.45%. ⑵ Specifically, the yield on Treasury bills due in May 2026 is 4.90000%, the yield on the treasury bills due in July 2026 is 5.30000%, and the yield on the treasury bills due in April 2027 is 5.45000%. ⑶In terms of medium and long-term bonds, the weighted average yield of bonds maturing in March 2031 is 6.57944%, that of bonds maturing in April 2036 is 6.86968%, and that of bonds maturing in August 2040 is 6.93934%. ⑷The yields of ultra-long-term bonds maturing in August 2045 and July 2054 are 6.91792% and 6.92994% respectively, indicating that the long-term yield curve is flattening.

Qatar urges all parties to the Middle East conflict not to attack energy and nuclear infrastructure

On March 31, local time, Qatar’s Foreign Ministry spokesperson Ansari urged all parties to the Middle East conflict not to attack energy and nuclear infrastructure at a regular press conference of the Ministry of Foreign Affairs. Ansari said that since the outbreak of the conflict, Qatar has continued to call on all parties not to target important infrastructure and has maintained xmaccount.communication and coordination with relevant parties in this regard. The Qatari side opposes any form of escalation of the situation, because the escalation of the situation is not in the interest of any party and will only bring more losses. He also said that Qatar supports Pakistan's mediation efforts and hopes to promote the easing of regional tensions and the peace process, and stressed that all parties should return to the negotiating table as soon as possible, which will be more conducive to regional stability. He also pointed out that Iran is an important neighbor of the Gulf countries and all parties must explore ways to peacefully coexist.

Iran’s top officials have issued harsh words intensively, drawing a clear red line for the ground war, and retaliating will be doubled

⑴ In response to the possible launch of a ground war by the US military, Iran’s top officials have issued intensive warnings.All invasions will suffer "historic" defeats. ⑵ First Vice President Aref stated in a statement that US President Trump can only decide to send troops to Khark Island, but whether these personnel can return will no longer be up to him. The implication is that a military strike will pay a heavy price. ⑶Parliament Speaker Qalibaf warned that if the enemy dares to launch a single attack, it will be hit back several times. The Iranian people, under the leadership of the Supreme Leader, will definitely make the aggressor regret it. ⑷The spokesperson of the Central Headquarters of the Iranian Armed Forces in Hatam al-Anbia emphasized that the armed forces "will cut off the legs of anyone who invades Iran and abandon them in the black soil of humiliation", showing a tough stance with harsh words.

The Gulf countries have collectively spoken out, delineating red lines for energy facilities, and the Strait of Hormuz is not decided by one country

⑴ A spokesperson for Qatar’s Ministry of Foreign Affairs stated that the threat to Iran’s desalination facilities is a threat to the entire region, and called on all parties to stop attacking energy and nuclear infrastructure. ⑵The spokesperson revealed that the Gulf countries have formed a unified position on ending the escalation of the situation. The sooner they return to the negotiating table, the better for the region. ⑶ Regarding the future of the Strait of Hormuz, the spokesperson emphasized that it should be decided jointly by the entire region, not by a single country.

An attack on an oil tanker ignited a powder keg, Trump escalated his threats, and the Strait of Hormuz became the lifeline of the world

⑴ A fully loaded Kuwaiti crude oil tanker was attacked by Iran and caught fire off the coast of Dubai early Tuesday morning. This is the latest missile or drone attack on merchant ships in the Gulf and Strait of Hormuz since the United States and Israel attacked Iran on February 28. ⑵ Trump previously warned that if Iran does not open the Strait of Hormuz, the United States will destroy its energy facilities and oil wells. This month-long conflict has spread to many countries in the Middle East, resulting in thousands of deaths and energy supply chaos. ⑶ The tanker can carry about 2 million barrels of crude oil, which is worth more than 200 million US dollars at current prices. After the attack, crude oil prices surged again in the short term. The average retail price of gasoline in the United States exceeded US$4 per gallon on Monday, the first time in more than three years. ⑷ Thousands of soldiers from the U.S. 82nd Airborne Division have begun arriving in the Middle East, providing more options for Trump's possible ground operations against Iran. The White House has expressed its hope to reach an agreement with Iran to open the Straits before the second deadline of April 6, but Iran calls the U.S. proposal unrealistic and excessive. ⑸ Market sentiment has repeatedly oscillated between war and negotiations. There are reports that Trump has stated that he is willing to end military operations even if the strait is still basically closed. This news has caused oil prices to fall and boosted the stock market. Investors hope that hostilities can end as soon as possible.

The specter of inflation has returned, and the suspense of interest rate hikes has put the European Central Bank in a dilemma

⑴ European Central Bank Governing Council member Vujcic admitted that it is not surprising that inflation expectations have increased since the outbreak of the Iran war. This is exactly what was predicted before - inflation will inevitably rise due to Iran-related events. ⑵The longer the war lasts and the greater the damage to energy infrastructure, the more significant the upward pressure on energy prices will be, which will directly translate into higher inflation levels. ⑶ Eurozone inflation in March was highest since 2022With the biggest rise in 2019, price expectations of consumers, businesses and investors have become a core variable closely scrutinized by European Central Bank officials as they decide how to respond to soaring energy costs. ⑷Although some policymakers believe that a rate hike may be needed next month, Vujcic declined to take a clear stance, emphasizing that there is still a lot of data and news to be seen before the April meeting, and no decision is certain.

Threatening to destroy Khark Island, Gulf allies urged to continue the strike, Trump faces multiple games in the Iran war

⑴ Trump warned on social media that if Iran fails to accept the peace agreement as soon as possible and reopen the Strait of Hormuz, the United States will destroy Iran’s oil hub Khark Island, oil wells and power facilities. However, the Wall Street Journal reported that Trump also told aides that he was willing to end military operations against Iran even if the Strait of Hormuz remained largely closed, showing that there is room for swing in his stance. ⑵ Gulf allies are urging Trump to continue advancing the war with Iran, arguing that the month-long bombing has not dealt a sufficient blow to Tehran. Meanwhile, thousands of soldiers from the U.S. Army's elite 82nd Airborne Division have begun arriving in the Middle East, and the White House said Trump may call on Arab countries to shoulder the cost of the war. ⑶ The United States is still extensively searching for officials within Iran who can talk to it, because the identity of Tehran’s decision-makers is still unclear. Iran's First Vice President Aref strongly warned that sending troops to Khark Island would lead to no return, saying "no one can xmaccount.come back alive from hell." ⑷ US Secretary of State Rubio made it clear that Iran will never be allowed to permanently control the Strait of Hormuz or establish a toll system. At the domestic level, a University of Massachusetts poll showed Trump's approval rating dropped to a new low of 33%, and the war put further pressure on his political prospects.

The premium of Russian Urals crude oil rose in Asia, but transportation costs and port attacks restricted profits

⑴ Three traders said that the price of Russian Urals crude oil rose in Asia, and the premium to Brent crude oil rose to about US$8 per barrel from US$5 a barrel a week ago. Asian buyers are seeking alternative supply channels due to supply disruptions in the Gulf region due to the war in Iran. ⑵ However, Ukrainian drone attacks on Baltic ports are also limiting Russia's own supply, with traders saying that about 40% of its oil export capacity was forced to shut down last week. As of Monday, the 700,000-barrel-per-day port of Ust-Luga remained closed. ⑶ Freight costs hit a new high last week. The freight for Aframax tankers shipped from Primorsk to India rose to US$21 million to US$22 million, and the freight from the port of Novorossiysk also reached US$20 million. Shipping costs are near record highs, driven by the threat of drone strikes, longer shipping routes, rising insurance premiums and the seizure of Shadow Fleet tankers. ⑷The United States has granted a 30-day exemption period, valid until April 11, allowing global buyers to purchase Russian oil to alleviate supply shortages. But traders said some sellers were still unable to secure delivery of cargoes even as prices moved higher, and some Russian oil producers have warned buyers they could declare force majeure due to attacks on Baltic ports.

Financial conditions have tightened on their own, and the central bank has plenty of time to wait and see.

⑴ As the Iran war triggers energy shocks, there are endless market speculations on the path of the central bank’s interest rates, but the current answer may be to stand still. Most monetary authorities are issuing only verbal warnings for now, but overall financial conditions have tightened significantly due to rising energy prices, rising borrowing costs, wider credit premiums and falling stock markets. ⑵Chicago Fed data shows that the U.S. national financial conditions index tightened in March to the largest extent in a single month since April last year, and the reading has risen to the tightest level since May last year. Goldman Sachs data also showed that the euro zone financial conditions index hit a 10-month high. The market has actually xmaccount.completed a tightening equivalent to a rate hike. ⑶ Since the United States and Israel launched an attack on Iran on February 28, the market has xmaccount.completely erased expectations of two interest rate cuts this year. The 10-year real yield has increased by more than 40 basis points, the 30-year fixed mortgage rate has risen to 6.4%, the price of regular gasoline has increased by one-third, and the S&P 500 index has fallen by more than 7%. Federal Reserve Chairman Powell made it clear that he would do "whatever it takes" to deal with the surge in oil prices. This statement itself is enough to guide market expectations. ⑷The current inflation expectations are still stable around the two-year average, but differences in paths still exist: it is difficult to determine whether energy shocks will ultimately suppress demand or push up prices. Germany's inflation rate jumped from 2.0% to 2.8% in March, and European household inflation expectations have almost doubled to a four-year high. However, the chief economist of AXA Group pointed out that the lessons learned from the European Central Bank's interest rate hike in 2011 due to rising oil prices are worthy of caution - at that time, the interest rate hike was followed by the European debt crisis and was forced to reverse. In a context where the risk of political intervention remains, the trust relationship between central banks and markets will become a key variable in the xmaccount.coming months.

3. Trends of major currency pairs before the New York market opens

EUR/USD: As of 20:16 Beijing time, EUR/USD rose and is now at 1.1489, an increase of 0.21%. EUR/USD has surged higher in recent intraday trading ahead of the New York session, gaining momentum from the solidity of support at 1.1445, which we previously identified as a potential price target. This provided a positive boost, helping EUR/USD recoup some of its early losses, while relative strength indicators began to ease its oversold conditions, and early positive signals were emerging.

GBP/USD: As of 20:16 Beijing time, GBP/USD has risen and is now at 1.3236, an increase of 0.37%. Pre-market in New York, the GBPUSD currency pair has risen in recent intraday trade, supported by the 1.3160 ​​level, which was identified as a price target in our previous analysis. This support provided positive momentum, helping the pair regain some of its previous losses. Meanwhile, the pair is trying to ease relative strength as early positive signals begin to emerge.The underlying oversold condition.

Spot gold: As of 20:16 Beijing time, spot gold has risen and is currently trading at 4579.21, an increase of 1.51%. Gold has posted strong gains in recent intraday trade before the New York session, supported by its stability above $4,500, which has restored positive momentum and helped it escape negative pressure from the EMA50. This is a short-term corrective bull market, reinforced by a relatively steep support trendline.

Spot silver: As of 20:16 Beijing time, spot silver has risen, now trading at 72.881, an increase of 4.07%. Silver surged in recent intraday trade before the New York session, benefiting from a break of a short-term downtrend line, which boosted positive momentum. The price also managed to overcome negative pressure from the EMA50, marking a partial recovery and is now moving towards a test of the key resistance at $74.00.

Crude oil market: As of 20:16 Beijing time, U.S. oil rose, now trading at 103.940, an increase of 1.04%. Crude oil fell in recent intraday trade before the New York session opened, as prices underwent a natural corrective movement to profit from previous gains. At the same time, it is trying to ease the overbought conditions that have accumulated on the relative strength indicator, which have begun to show clear negative signals that the market is taking a pause to regain momentum ahead of a potential new bull run.

4. Institutional perspective

xmaccount.commerzbank: Inflation is lower than expected, the number of ECB interest rate hikes may be less than market expectations

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