The week ending 10 April 2026 was driven by a U.S.-Iran two week ceasefire that triggered a sharp risk-on move. Oil saw its steepest single day drop since 2020 and equities rose 3 to 9 percent. The geopolitical risk premium began to unwind, but with ceasefire terms incomplete and Hormuz flows constrained, uncertainty remains deferred rather than resolved.
Key Themes
- Ceasefire relief rally: Oil fell ~13 percent WoW from ~$111.5 to ~$96.6 per barrel, easing energy-driven inflation pressure. Global equities gained 3 to 9 percent.
- Inflation constrains Fed: U.S. CPI rose to 3.3 percent YoY, with energy up 12.5 percent YoY and gasoline up 21 percent MoM. Core PCE remains above 3 percent. Markets now price limited easing, with policy staying restrictive.
- Energy importers rebound: Nikkei 225 rose 8.5 percent WoW and BSE Sensex gained 5.8 percent as oil pressures eased. Both remain negative YTD.
- USD softer, EM stabilises: The dollar weakened as risk appetite improved. INR strengthened modestly, while India 10 year yields stayed elevated near 6.9 percent due to residual oil risk.
- Oil risk premium persists: WTI at ~$96.6 per barrel remains ~68 percent above year start levels. Shipping constraints in Hormuz and elevated tanker rates indicate ongoing supply disruption.
- Crypto follows risk: Bitcoin rose 9.6 percent and the Bloomberg Crypto Index gained 8 percent, moving in line with equities and reinforcing its high beta profile.
