24/03/2026 - 08:25 UTCThe USDX traded with renewed strength on Monday, recording a decline of -0.44% as it consolidated near the 99.50 level. Despite this daily dip, the greenback remains supported by persistent safe-haven demand as geopolitical uncertainty in the Middle East intensifies. Investors are closely monitoring reports of potential direct military engagement from Saudi Arabia and a new wave of strikes by U.S. and Israeli forces on Iranian infrastructure. Further complicating the outlook, Federal Reserve officials, including Mary Daly, have suggested that sustained energy price volatility could make the central bank's next interest rate move increasingly difficult to predict.
Gold faced its tenth consecutive day of selling pressure, ending Monday with a move of -0.53% to trade near the $4,400 mark. The precious metal continues to be undermined by a "liquidity squeeze" and a hawkish shift in global monetary policy expectations. As the conflict fuels fears of energy-driven inflation, market participants are rapidly pricing out the possibility of Fed rate cuts and instead preparing for potential hikes. While the escalating rhetoric between Washington and Tehran provides some underlying floor for safe-haven assets, the rise in U.S. Treasury yields and a firm dollar have effectively capped any meaningful recovery for the non-yielding metal.
WTI crude oil experienced a dramatic sell-off on Monday, plummeting -9.26% to settle near $91.00 per barrel. This sharp decline was triggered by President Donald Trump’s decision to delay planned strikes on Iranian energy infrastructure for five days, citing "productive discussions" with Tehran. However, the relief was short-lived as Iranian officials flatly denied that any negotiations had taken place, asserting that the conflict would continue until full compensation for damages is received. Although prices saw a tentative rebound in early Tuesday trading due to supply concerns and the restricted transit through the Strait of Hormuz, the market remains highly sensitive to the conflicting narratives surrounding a potential de-escalation.
Asian markets experienced a volatile trading session on Tuesday as investors balanced news of a postponed strike on Iranian infrastructure against Tehran's denial of direct negotiations with Washington. While a positive lead from Wall Street initially bolstered sentiment following reports of "positive" talks, the lack of a confirmed de-escalation path caused many regional indices to retreat from their intraday highs. As the Middle East conflict enters its fourth week, the persistent threat to energy supplies continues to weigh on the broader economic outlook for major Asian importers.
In Greater China, markets managed to hold onto gains despite the conflicting geopolitical signals. As of 07:58 AM GMT, the China SSE rose 1.78% and the China SZSE climbed 1.44%. Sentiment in the region was aided by reports that some Asian and Gulf nations are acting as intermediaries between the U.S. and Iran. Meanwhile, the Hong Kong 50 edged up 0.07%, recovering from earlier dips into negative territory as traders monitored the impact of volatile crude prices on large-cap components.
In other parts of the region, the results were more polarized. The Korea 200 surged 3.16% by 07:58 AM GMT, recovering a significant portion of its recent deep losses, though investors remain wary of a more hawkish stance from the new central bank governor. Conversely, the Japan 225 slipped -0.16% as soft CPI and PMI data failed to offset concerns over the upcoming expiration of government energy subsidies in April. With S&P 500 futures under pressure, the continent remains highly sensitive to the evolving situation in the Strait of Hormuz and its impact on global inflation.
In corporate news, South Korean chipmaker SK Hynix is exploring a U.S. ADR listing to raise up to 15 trillion won ($10.03 billion). As the global leader in AI high-bandwidth memory with a 57% market share, the Nvidia supplier intends to use the capital to expand production capacity and AI infrastructure. While no final decision has been made, the move aims to broaden its investor base and align its valuation with peers like Micron. Following the news and a recent 12.2 trillion won share cancellation, SK Hynix shares closed up 6.12% on Tuesday.
Tuesday's economic calendar is headlined by a series of critical preliminary data releases, starting with the UK’s Flash Manufacturing PMI, which is projected to land at 50.0 against a previous 51.7, and the Flash Services PMI, forecasted at 52.8 compared to 53.9. Later in the day, the focus shifts to the US session, where the Flash Manufacturing PMI is expected at 51.5 and the Flash Services PMI at 51.6, as investors search for signs of continued industrial expansion and service sector resilience.
The EUR/USD pair edged lower during Tuesday’s Asian session, slipping to around 1.1580 after posting modest gains in the previous trading day. The decline comes as the US Dollar strengthened amid heightened risk aversion, driven by escalating geopolitical tensions in the Middle East.
Fresh reports indicate that Israeli forces have launched a new round of strikes targeting Tehran, underscoring the ongoing volatility in the region. The latest developments follow remarks from US President Donald Trump, who signaled a temporary pause in US attacks on energy infrastructure after describing recent discussions with Iran as constructive. However, Israeli authorities have confirmed that military operations will continue in accordance with government directives.
On the diplomatic front, Iran has firmly rejected claims of engagement with Washington. Foreign Minister Abbas Araghchi stated that no dialogue has taken place, while parliamentary figures reiterated that no negotiations with the United States have occurred
Meanwhile, uncertainty surrounding the geopolitical outlook is complicating the monetary policy landscape. Mary Daly, President of the Federal Reserve Bank of San Francisco, noted that prolonged tensions and a sustained rise in oil prices could cloud the Federal Reserve’s policy path, particularly if inflationary pressures intensify. The ECB held interest rates steady at its latest meeting but highlighted the Iran conflict as a key source of heightened uncertainty. Policymakers flagged rising inflation risks alongside slowing economic growth, prompting markets to increase expectations of potential rate hikes later this year.
Gold prices extended their decline early on Tuesday, as rising inflation concerns tied to escalating geopolitical tensions continue to weigh on the precious metal. The bearish tone is reinforced by increasingly hawkish expectations from major central banks.
During the Asian session, Gold faced renewed selling pressure as persistent fears that the ongoing Iran conflict could drive energy prices higher have dampened expectations for interest rate cuts, reducing the appeal of the non-yielding asset. At the same time, renewed strength in the US Dollar has added further downward pressure. A rebound in US Treasury yields, driven by shifting rate expectations, is encouraging capital flows away from Gold.
Geopolitical developments remain a central driver. Iranian officials have denied engaging in negotiations with the United States, contradicting earlier comments from US President Donald Trump suggesting that a deal could be imminent. Meanwhile, senior military adviser Mohsen Rezaei indicated that the conflict will persist until Iran receives full compensation for damages sustained.
Market participants have now largely ruled out additional rate cuts from the Federal Reserve, with growing speculation that a rate hike could materialize before year-end. This shift has propelled US bond yields higher and bolstered demand for the Greenback, both of which continue to undermine Gold.
Despite the prevailing bearish sentiment, lingering uncertainty surrounding the Middle East conflict is limiting downside momentum. Safe-haven demand could re-emerge if tensions escalate further, potentially preventing more aggressive selling.
Looking ahead, traders will focus on upcoming global flash PMI releases for fresh directional cues and short-term trading opportunities.
Oil prices moved higher early on Tuesday as renewed supply concerns outweighed recent optimism over a potential diplomatic breakthrough in the Gulf region. The rebound follows Iran’s firm denial of any negotiations with the United States, contradicting comments from US President Donald Trump, who suggested that a deal to end hostilities could be within reach.
The recovery comes after a sharp sell-off in the previous session, when prices fell around 10% following Trump’s decision to delay planned strikes on Iranian power infrastructure for five days, citing progress in discussions with unnamed Iranian officials.
Market participants interpreted the temporary pause as a reduction in immediate geopolitical risk. A key concern remains the status of the Strait of Hormuz, a critical artery for global energy flows. The conflict has severely disrupted shipments, affecting nearly one-fifth of the world’s oil and liquefied natural gas supply. While some tanker traffic has resumed, the passage remains far from fully secure.
Tehran has rejected claims of engagement with Washington, labeling them as attempts to influence financial markets. Meanwhile, Iran’s Islamic Revolutionary Guard Corps reported attacks on US-linked targets and dismissed recent US statements as psychological tactics.
Recent attacks on energy infrastructure in Iran have further heightened supply risks, including damage to gas facilities in Isfahan and pipeline disruptions in Khorramshahr. In response to tightening supply, the US has temporarily eased sanctions on Russian and Iranian oil shipments already at sea, with reports indicating that Iranian crude is being offered to Indian refiners at a premium.
Looking ahead, markets are bracing for continued disruption at least through April, which is expected to sustain upward pressure on oil prices and reinforce global inflation risks.
US equities posted strong gains on Monday, driven by early optimism over a potential de-escalation in Middle East tensions. However, much of the initial momentum faded after Iran rejected claims of ongoing negotiations with Washington. Markets opened sharply higher after US President Donald Trump stated that recent discussions with Iran had been “productive” and suggested a meaningful possibility of reaching a deal. Investor sentiment was initially buoyed by the prospect of easing geopolitical risks, though enthusiasm cooled as Tehran denied any direct engagement.
On the geopolitical front, Trump indicated that talks aimed at achieving a “complete and total resolution” to the conflict had shown encouraging progress, prompting a temporary five-day delay in planned US strikes on Iranian energy infrastructure. However, Iranian officials swiftly pushed back, with state media and government representatives insisting that no direct or indirect discussions with the United States had taken place.
Energy markets also reflected shifting expectations. Oil prices declined sharply on hopes of de-escalation, with global benchmark Brent crude falling nearly 10%.
Trump suggested that oil prices could “drop significantly” if a deal is reached, and outlined measures aimed at stabilizing supply, including temporarily easing sanctions on Iranian oil shipments. He also indicated that the Strait of Hormuz could reopen under joint oversight, though no firm commitments were provided.
Despite the pullback in oil prices, the broader economic outlook remains cloudy. Disruptions in the Strait of Hormuz—through which roughly one-fifth of global shipping passes—have heightened concerns over supply constraints, inflationary pressures, and the potential for tighter monetary policy.
Looking ahead, investors will closely monitor developments in US-Iran relations and their implications for global markets, as uncertainty surrounding the conflict continues to shape risk sentiment.
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