Truce Announced and Inflation's Resilience

Forex

US (American Dollar)

As we know, the macroeconomic conjuncture has been quite turbulent for several weeks, but things seem to be calming down at first glance. To keep it short, for now, on Sunday, April 12, 2026, no agreement between Iran and the USA has been reached, after what seems to be an interminable negotiation of more than 21 hours. In this context, we would tend to say that uncertainty will prevail tomorrow at the open if no agreement is found.

As for this week’s raw data, we observed an acceleration of annual inflation reaching 3.6%… In this sense, a premature rate hike could emerge on the Fed’s side even though it was not really priced for several months; this inflation is to be watched closely. On the employment side, the data were not all that polarized, with a stabilization of jobless claims at 215K versus 212K previously.

Ultimately, as for the greenback itself, this truce announcement had a fairly depreciating effect on the dollar, which — let us recall — had outperformed since the war in Iran, thus forcing US companies to strengthen their hedges, because the dollar was starting to cost too much (to put it more simply).

Our view: insofar as an agreement is reached, the dollar could continue its depreciation; be careful nonetheless of the data in the coming weeks. We are still watching employment inflation closely, but also growth — a slowdown could cause greater damage in a tense context.

EUR (Euro)

Let us now talk about the euro area… This week, as we know, the European Central Bank spoke. Nothing too extravagant, no rate cut, with a main rate maintained at 2.15%. However, Christine Lagarde, the ECB president, in her speech of April 9, declared that it was “premature” to consider a rate cut in June, citing the persistence of pressures on services and energy uncertainty.

Because indeed, as we know, the energy sector, which was heavily impacted by the war (still not over), will take time to recover, potentially causing uncontrolled inflation over the coming months, and thus forcing the ECB to raise policy rates… As a reminder: raising policy rates to counter inflation caused by an exogenous shock rather than internal growth in the monetary zone can be an enormous danger for the latter…

EUR/USD itself rebounded from 1.0750 toward 1.0860 following the truce announcement before stabilizing. For now, the continuation of this euro-buying/dollar-selling trend seems hazy given the uncertainty reigning over the markets.

JPY (Japanese Yen)

In the context of a relatively weak YEN, Japan, and more precisely the Finance Minister, Shunichi Suzuki, once again floated the idea that all alternatives were on the table to counter the weakness of its currency. Indeed, as we discussed in a previous report, the weakness of the yen could push Japanese institutions to raise rates, and thus attract more capital, through the durability of their economy and the attractiveness of their rates… at the dollar’s expense.

The USD/JPY cross oscillates in a compression zone between 151.50 and 152.00, despite the easing of global bond yields.

G10 & EM

• New Zealand (NZD): The RBNZ kept the Official Cash Rate (OCR) at 5.50%, maintaining a restrictive tone despite slowing consumption.
• Switzerland (CHF): The SNB’s FX reserves fell by 15 billion CHF in March, indicating interventions to support the national currency.

Equities

A general catching of breath across the entire equity market, nothing too wild… just a truce announcement, and still very strong investor pressure. On the equity market, for now there is nothing to say, other than to always be careful and to hedge properly on low-volatility names.

Commodities

Oil: The price of a barrel went from 102 $ to 91 $ immediately after the truce announcement, before climbing back toward 93 $ owing to the continued closure of Hormuz. Nothing too fantastic on our black gold…