Market Overview

Global financial markets entered the new week under intense volatility as geopolitical escalation in the Middle East, weakening U.S. labour data, and an unprecedented surge in oil prices reshaped investor sentiment across currencies and commodities.

The U.S. Dollar Index ended last Friday slightly lower at 98.89, falling 0.15% after disappointing U.S. employment data triggered a reassessment of the Federal Reserve’s monetary policy path. Meanwhile, U.S. Treasury yields remained relatively elevated, with the 10-year yield closing at 4.146% and the 2-year yield at 3.558%, reflecting ongoing uncertainty over the direction of interest rates.

Energy markets became the central focus of global investors after the escalating war between the United States, Israel, and Iran effectively disrupted oil shipments through the Strait of Hormuz, a critical global energy corridor responsible for nearly 20% of worldwide oil supply.

Oil prices surged dramatically. WTI crude closed the week at $91.41 per barrel, rising 15.8%, while Brent crude climbed to $90.72. At the start of Monday’s trading session, markets experienced an even sharper shock as WTI crude briefly surged above $110 per barrel, its highest level since mid-2022.

The spike in energy prices immediately triggered fears of renewed global inflation pressures and intensified volatility across commodities, foreign exchange markets, and global equities.

Gold Market Developments

Despite heightened geopolitical risks, gold recorded its first weekly decline in five weeks, largely due to the strength of the U.S. dollar.

Spot gold rose 1.4% on Friday to $5,149 per ounce, supported by weaker U.S. labour market data that revived expectations for Federal Reserve rate cuts. However, the metal still ended the week down approximately 2% overall.

Entering Monday’s Asian trading session, gold prices came under renewed pressure and briefly fell more than 2%, breaking below the $5,100 psychological level and touching an intraday low near $5,044 per ounce.

Analysts noted that the unexpectedly weak U.S. employment report — which showed a decline of 92,000 non-farm jobs in February — increased speculation that the Federal Reserve may resume rate cuts earlier than previously anticipated. Interest rate futures now show roughly a 76% probability that the Fed could begin easing policy by September, compared with earlier expectations for October.

At the same time, the sudden deterioration in the labour market combined with rising wage pressures has increased concerns about a stagflationary environment, which traditionally strengthens gold’s role as an inflation hedge.

However, the strong performance of the U.S. dollar limited the metal’s upside momentum, as a stronger greenback makes gold more expensive for international buyers.

Oil Market Shock

The most dramatic development across global markets has been the surge in crude oil prices following the escalation of the Iran conflict.

The Strait of Hormuz, one of the world’s most strategically important energy transport routes, has effectively remained closed for nearly seven consecutive days after military strikes by the United States and Israel on Iranian targets.

The closure has blocked roughly 140 million barrels of crude oil from entering global markets, triggering panic buying among energy traders.

Several major oil-producing countries in the Middle East, including Iraq and Kuwait, have already begun reducing production amid rising security risks.

Analysts at major financial institutions warn that if the disruption continues, oil prices could rise significantly further. Qatar’s energy minister recently warned that if the crisis expands, Gulf exporters may halt shipments entirely within weeks — potentially driving oil prices toward $150 per barrel.

The surge in energy costs is rapidly becoming a key concern for central banks, as higher oil prices could reignite inflation pressures worldwide and delay expected interest-rate cuts.

Foreign Exchange Market Reaction

Currency markets reacted sharply to the combination of geopolitical tensions and economic data surprises.

The Swiss franc strengthened significantly as investors shifted into traditional safe-haven assets. The USD/CHF pair fell 0.63% to 0.7757, reflecting strong demand for the Swiss currency.

Meanwhile, the euro recovered slightly against the U.S. dollar, rising 0.1% to 1.1616, although it still recorded its largest weekly decline since April 2024, falling roughly 1.7% over the week.

The British pound also strengthened modestly, gaining 0.42% against the dollar to reach 1.3411, as traders adjusted positions following the weak U.S. employment data.

Despite Friday’s decline, the U.S. dollar still recorded its largest weekly gain since November 2024, rising 1.3% overall, supported by safe-haven flows triggered by the Middle East crisis.

Equity Market Performance

Global equity markets reacted negatively to the geopolitical escalation and rising oil prices.

U.S. stock markets ended the week lower across all major indices. The Nasdaq fell 1.59%, the S&P 500 declined 1.33%, and the Dow Jones dropped 0.95%.

Technology stocks led the decline, with Intel losing more than 5%, Nvidia falling around 3%, and both Amazon and Tesla dropping more than 2%.

European markets also closed sharply lower, reflecting concerns about energy supply disruptions and economic stability. Germany’s DAX index fell 1.61%, while the FTSE 100 declined 1.45%, and the Euro Stoxx 50 dropped 1.5%.

Technical Analysis

U.S. Dollar Index Outlook

The U.S. Dollar Index encountered resistance below 99.45 last Friday while finding support above 98.80, suggesting that the recent rebound may still face downside pressure.

If the index fails to break above 99.70, the next downside targets are likely to emerge between 99.00 and 98.75.

Immediate resistance levels are located near 99.65–99.70, while stronger resistance stands near 99.95–100.00. On the downside, support is seen around 99.00–99.05, followed by stronger support near 98.75–98.80.

EUR/USD Technical Outlook

EUR/USD found support near 1.1545 while facing resistance around 1.1625, suggesting the pair could maintain a gradual upward bias after the recent correction.

If the pair holds above 1.1510, the next upside targets may emerge between 1.1600 and 1.1635.

Short-term resistance is located around 1.1595–1.1600, with stronger resistance near 1.1630–1.1635. Key support levels remain near 1.1510–1.1515, followed by 1.1470–1.1475.

Gold Technical Outlook

Gold found support near $5,062 while facing resistance around $5,177, indicating the broader bullish trend could remain intact despite the current pullback.

If prices stabilize above $5,018, gold could attempt another move toward the $5,160–$5,204 resistance region.

Short-term resistance levels are located near $5,155–$5,160, with stronger resistance at $5,199–$5,204. Immediate support lies around $5,018–$5,023, followed by a deeper support zone near $4,968–$4,973.

Market Outlook

Markets are entering a critical period as geopolitical tensions in the Middle East continue to escalate while economic data reshapes expectations for global monetary policy.

The closure of the Strait of Hormuz has introduced a major supply shock to global energy markets, and the resulting surge in oil prices is increasing the risk of renewed inflation pressures.

At the same time, weakening U.S. labour market data is strengthening expectations that the Federal Reserve may resume rate cuts later this year.

As a result, investors are likely to remain highly sensitive to geopolitical headlines, energy market developments, and central-bank policy signals in the days ahead.

Volatility across commodities, currencies, and global equity markets is therefore expected to remain elevated in the near term.