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Commerzbank’s Senior Economist Dr. Vincent Stamer notes that the Euro area composite PMI fell from 51.9 to 50.5 in March, with services weakening and manufacturing flattered by longer delivery times. He links this to the war in Iran, which is hurting expectations and lifting input prices. Despite the March drop, PMI levels still historically align with moderate Euro area growth.Services weaken as manufacturing distorted higher”The composite Purchasing Managers’ Index (PMI) for the manufacturing and services sectors in the euro area fell from 51.9 to 50.5 points in March. The war in Iran appears to make itself felt: while expectations in…
The Indian rupee paused a three-day run of hitting record lows to nudge higher on Tuesday as traders parsed dissonant signals emanating from Washington and Tehran about a potential resolution to the conflict in the Middle East. The rupee nudged up 0.1% to end the session at 93.8650, from its close at 93.9750 in the previous session. The currency has weakened about 4% in 2026 so far, with a large chunk of losses coming in March as oil prices surged and foreign investors yanked money from local stocks, unnerved by the war in the Middle East.Analysts at Goldman Sachs pared…
The gap between offshore swaps used to wager on India’s policy rates and those that reflect the cost of hedging against a weaker rupee is widening, hinting at worries over the currency’s outlook as the Iran war threatens the net energy importer.The one-year non-deliverable overnight index swap (NDOIS), a key gauge for India’s policy rate expectations, has climbed 50 basis points since the Middle East conflict started.The one-year dollar/rupee non-deliverable currency swap, which factors in the cost of hedging rupee exposure, has jumped more than 90 bps, reflecting pressure from hedging and speculative flows.The spread between the rates has widened…
The Indian Rupee (INR) strives to regain ground against the US Dollar (USD) during afternoon trading hours in India on Tuesday, following an underperformance in the opening trade. The USD/INR drops to near 94.15 from the morning high of 94.30 as the US Dollar gives back its early gains amid improvement in investors’ risk-appetite.As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is marginally up to near 99.20 after surrendering almost its entire early gains. S&P 500 futures have recovered its entire early losses and have turned positive around 6,600.00, indicating an…
The rupee fell 20 paise to 93.73 against the US dollar in early trade on Tuesday as the greenback strengthened and global crude oil prices kept rising even after US President Donald Trump signalled that negotiations were underway with Iran.Trump on Monday said the US was talking with a “respected” Iranian leader and claimed the Islamic Republic was eager for a deal to end the war. He also extended a deadline for Iran to reopen the crucial Strait of Hormuz or face attacks on its power plants, saying it has an additional five days.However, Iran’s denial of Trump’s claims created…
The GBP/USD pair faces selling pressure after registering modest gains in the previous day, trading near 1.3400 during the Asian session on Tuesday. The risk-sensitive pair weakens amid rising risk aversion as US-aligned Gulf states move closer to direct involvement in the Iran conflict, with Saudi Arabia signaling a potential military shift, according to a Wall Street Journal report.Israel launched its latest attack on Iran despite US President Donald Trump signaling a pause in strikes on energy infrastructure after what he described as productive talks with Tehran. However, Iran’s Foreign Minister Abbas Araghchi denied any engagement with Washington. Iranian Parliament…
San Francisco Federal Reserve Bank President Mary Daly said that unless the Iran conflict resolves quickly and the central bank can simply “look through” a temporary increase in oil prices, it is not clear what the next move on interest rates will need to be, Reuters reported on Monday.Key quotesThere are at least two possible paths for the economy.Protracted conflict may amplify monetary policy tradeoffs. Fed needs to stay flexible on monetary policy given risks.Too much forward guidance risks a false sense of certainty.Economy impact would be short-lived if the war resolves quickly.Recognising uncertainty is optimal communication.Policy is in a good…
BNP Paribas projects Eurozone growth at 1.6% in 2026, supported by German fiscal measures, higher military and AI-related investment, and a resilient labour market. Inflation is expected to stay below 2% in 2026 before gradually accelerating in 2027. This would prompt the ECB to raise the deposit facility rate to 2.5% in the second half of 2027.Growth support sets stage for ECB”After holding up well in 2025 (1.5%), growth is expected to strengthen in 2026 (+1.6%).””The roll-out of fiscal measures in Germany and the planned increase in military spending and AI-related investment in Europe, against a backdrop of labour market…
Citing sources with knowledge, Iran’s Fars News agency reported that there are no direct communications with the United Stats (US) nor through intermediaries, per Reuters.The news outlet said that US President Donald Trump retreated after hearing that Iran would target all power plants in west Asia.US President Trump announced earlier that they have decided to postpone any military strikes against Iranian power plants following “good and productive conversations” regarding a complete and total resolution of hostilities in the Middle East.Market reactionThe US Dollar (USD) Index recovers from the session low it hit near 99.10 with the immediate reaction to US…
The rupee breached the 94/dollar barrier for the first time, slumping 50 paise to a new record closing low of 94.03 (provisional) against the greenback on Monday, as spiralling global crude prices and unabated foreign fund outflows unnerved investors.A strengthening US dollar and a steep decline in the domestic equity markets further weakened the local unit, forex traders said.At the interbank foreign exchange, the local unit opened at 93.84 and kept losing ground throughout the day, before breaching the 94-mark against the US dollar for the first time to settle at 94.03 (provisional), down 50 paise from its previous close.The…