Geopolitical Developments Drive Market Caution

Market sentiment was driven by conflicting developments surrounding a US-announced ceasefire extension with Iran, which was met with investor caution as Tehran had yet to formally respond. This uncertainty was compounded by stalled peace talks, a reported attack on a container ship by an IRGC gunboat near Oman, and warnings from the IRGC against US assets in the region.

Precious Metals Gain on Softer Dollar

Gold prices refreshed daily highs, recovering from a one-week low, as the US Dollar softened following the news of the ceasefire extension in the Middle East. Silver prices also advanced, rising over 2% during the European session amid corrections in oil prices and broader market uncertainty.

Oil Prices React to Fragile Ceasefire

Crude oil prices eased slightly on Wednesday in response to the unilaterally announced US-Iran ceasefire extension, though the market remained tense. Despite the slight drop, analysts noted that prices remain supported by significant geopolitical risks, including stalled negotiations and potential disruptions to shipping in the Strait of Hormuz.

Inflation Data and Central Bank Policy Influence Currencies

The British Pound faced pressure after UK inflation data for March showed a cooldown in core and services inflation, impacting currency pairs like GBP/JPY and EUR/GBP. Elsewhere, an official from the European Central Bank stated the bank was not in a rush to make a policy move, while hot inflation data out of New Zealand helped strengthen the NZD.