- The MSCI Asia Pacific ex-Japan Index (MXAPJ:IND) rose 7.3% in one week, driven by the ceasefire agreement between the US and Iran, which has returned the options volatility index to pre-war levels, opening a window for a more optimistic repricing of global risk assets.
- Brent crude oil (BRENT:COM) is currently priced at $97.67 per barrel, nearly a 10% retreat in a week, though the shipping volume through the Strait of Hormuz remains at extremely low levels, below 10% of normal capacity, indicating unresolved tail risk on the supply side.
- The US March Consumer Price Index (CPI) is about to be released, with market expectations of a 0.9% month-over-month increase; combined with the 10-year US Treasury yield (US10Y:IND) remaining steady at 4.295%, the macroeconomic trade narrative is shifting from geopolitical conflicts to fundamental data.
Risk Asset Recovery and Volatility Decline
Recent bilateral contact and the temporary ceasefire agreement between the US and Iran have provided an opportunity for sentiment recovery in global capital markets. The Asian market has notably outperformed, with the MSCI Asia Pacific ex-Japan Index (MXAPJ:IND) achieving its largest weekly increase since November 2022. The STOXX Europe 600 Index (SXXP:IND) also maintained an upward trend, bolstered by the technology and healthcare sectors. The significant retreat of the VIX index, which measures market panic, indicates that quantitative models and systematic funds are gradually shedding extreme geopolitical risk premiums from earlier. If the weekend talks yield further easing signals, risk assets overly sold off earlier may see a more solid valuation recovery.
Oil Premium Removal and Choke Point Blockage
While the commodity market also reflects optimism about peace negotiations, Brent crude oil (BRENT:COM) prices fell nearly 10% in one week, retreating below the $100 threshold, yet physical bottlenecks in spot logistics persist. The Strait of Hormuz, a vital artery for global energy, continues to operate at daily maritime volume levels below 10% of normal. This disparity between financial pricing expectations and the stagnation in spot logistics constitutes the current core contradiction in the energy market. If Iran's actual control over this strategic waterway continues, the futures curve for oil will struggle to completely erase geopolitical premiums, maintaining high sensitivity to any sudden events in the region.
Forward-looking Macro Data and Inflation Pricing
Amid the superficial warming of risk appetite, the underlying pricing logic of global macro liquidity is refocusing on inflation and monetary policy. The upcoming release of the US March CPI data is a critical indicator of the extent to which the prior surge in oil prices has permeated the real economy. Economists generally expect a 0.9% month-over-month increase. If inflation data rebounds beyond expectations, it may limit the Federal Reserve's policy maneuverability, subsequently hindering the current upward slope in US equity markets. Additionally, with initial US jobless claims remaining at a relatively low level of 219,000, the resilience of the labor market poses downward resistance to risk-free interest rates.
Foreign Exchange Market Structure and Dollar Liquidity
The cooling of risk aversion is directly reflected in the structural adjustments of the foreign exchange market. The Dollar Index (DXY:CUR) recorded about a 1.3% drop this week, marking its worst weekly performance of the year, indicating that global capital is flowing back into non-US currencies and emerging markets. The Euro stabilized near 1.167 against the Dollar after breaking through the 200-day moving average, signaling potential further upward movement from a technical perspective. However, if subsequent US inflation data reinforces expectations of prolonged high-interest rates, the dollar's interest rate differential advantage might reemerge, potentially challenging the one-sided downward trend of the forex market.
