Summary:
- Trump pauses Iran energy strikes for 10 days, signalling diplomacy window
- Oil falls as immediate supply shock risk eases; gold rebounds
- Middle East tensions persist with attacks on US-linked regional assets
- Fed speakers reinforce “higher for longer” amid rising inflation pressures
- Japan signals FX intervention risk as yen weakness deepens
- China data strong but outlook clouded; LNG demand hit by price spike
- India cuts fuel duties to ease inflation, keeps export windfall tax
After U.S. regular trading hours, and notably just 11 minutes after the S&P 500 closed for its worst session since the conflict began, U.S. President Donald Trump announced a temporary pause on planned strikes targeting Iran’s energy infrastructure. The delay extends the deadline by 10 days to April 6 at 8 p.m. Eastern Time, while signalling that diplomatic efforts remain active.
Trump said talks with Iran are ongoing and “going very well,” pointing to a potential window for de-escalation following weeks of intensifying geopolitical tension. The move effectively postpones what markets had feared could be a significant escalation targeting Iran’s energy sector, an outcome that carried clear risks of a broader supply shock via the Strait of Hormuz.
Oil prices moved lower in response, with WTI slipping below USD 93/bbl and Brent struggling to hold above USD 100/bbl, as the immediate risk premium eased. Gold rose 1.1%, edging higher as it stabilised after recent losses, supported by softer oil and a modest pullback in near-term Fed tightening urgency.
That said, the broader conflict continues to simmer. Reports of missile attacks targeting American bases in the UAE, along with heavy explosions at U.S. facilities in Saudi Arabia and Kuwait, underscore that underlying tensions remain elevated despite the temporary diplomatic pause.
On the policy front, a wave of Federal Reserve speakers, including Cook, Barr and Jefferson, highlighted persistent inflation pressures and reinforced expectations that interest rates may remain higher for longer. Miran, as expected, pushed back with a more dovish stance.
In FX, Japan’s Finance Minister Katayama struck a forceful tone, warning authorities are closely monitoring currency markets and stand ready to act. She confirmed a G7 finance ministers’ call will be convened and reiterated that “decisive steps” could be taken if volatility intensifies, language typically associated with intervention risk.
From China, industrial profits surged early in 2026, reinforcing signs of cyclical recovery, though the outlook remains clouded by rising input costs and geopolitical risks. Meanwhile, China’s LNG imports are tracking at their lowest level since 2018, with elevated prices curbing demand.
In India, authorities moved to ease domestic fuel costs, cutting excise duties on petrol and diesel while maintaining a windfall tax on diesel exports, highlighting the policy response to rising energy-driven inflation pressures.
Looking ahead, markets will be watching several scheduled appearances from Trump over the weekend:
- Future Investment Initiative at 17:30EST on Friday
- MAGA Inc meeting at 18:30EST on Saturday
- to farmers at 12:30EST on Sunday
