Most Asian equity indices fell on Monday after US–Iran peace talks ended without an agreement, and President Donald Trump said the US military will enforce a blockade in the Strait of Hormuz. Japan’s Nikkei 225 fell 0.8%, South Korea’s KOSPI dropped 0.85%, and Hong Kong’s Hang Seng slid 1.16%, while China’s Shanghai Composite was almost flat.

European stock futures were mixed, and US futures pointed to a lower open on Wall Street. Oil prices rose again after Trump said the US would block all vessels from Iran from 10:00 Eastern time (14:00 GMT) on Monday, with the move aimed at pressuring China, the main buyer of Iranian oil.

Markets Focus On Strait Of Hormuz Risk

Trump said he did not care if Iran returns to talks, while a two-week ceasefire that began last Wednesday remains in place. This reduced further falls in equities.

Iranian authorities said a Strait of Hormuz blockade would breach the ceasefire, and the Revolutionary Guard said military vessels approaching the area would be “dealt with severely”. With a light economic calendar on Monday, Middle East updates are expected to drive markets.

We remember the market reaction in 2025 when the US-Iran peace talks collapsed and the Strait of Hormuz blockade was enforced. That event sent a shockwave through equity markets and caused a significant spike in oil prices. The subsequent weeks were defined by extreme volatility as markets priced in the risk of a wider conflict.

The blockade last year pushed Brent crude prices past $110 a barrel by the summer of 2025, feeding a surge in global inflation that central banks are still battling today. We saw the CBOE Volatility Index (VIX) consistently trade above 30 during that period, a stark contrast to the relative calm of early 2025. Maritime insurance premiums for passage through the Gulf tripled, disrupting supply chains far beyond just the energy sector.

Trading Ideas For Fragile Stability

As of today, April 13, 2026, the situation has stabilized but remains a key source of underlying risk. Tensions have eased following diplomatic efforts late last year, with oil now trading closer to $85 per barrel. The VIX has settled back to around 18, suggesting traders are less fearful of an immediate shock.

Given this backdrop of reduced but persistent tension, traders should consider strategies that benefit from this fragile stability. Selling out-of-the-money put credit spreads on broad market indices like the S&P 500 could capture premium from the remaining volatility. This strategy profits from time decay and sideways market movement, but requires defined risk management in case of a sudden flare-up.

For direct energy exposure, the implied volatility in oil options remains elevated compared to historical averages. Purchasing long-dated, out-of-the-money call options on oil ETFs like USO offers a low-cost way to hedge against a potential new conflict. This provides significant upside exposure while strictly limiting the capital at risk.

We must also watch for signs of renewed risk-off sentiment, which would benefit safe-haven assets. During the peak tensions in 2025, the Japanese Yen and US dollar saw substantial inflows. Any breakdown in the current diplomatic quiet would likely see a repeat of this flight to safety, creating opportunities in currency derivatives.

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Talks between the United States and Iran ended without agreement, after a two-week ceasefire in the conflict. The United States has threatened a complete blockade of the Strait of Hormuz.

A blockade would aim to stop even the limited shipping traffic currently allowed through the strait. This could worsen the global shortage of oil and gas in the short term.

Market Reaction And Key Levels

Market moves have been limited so far. Brent crude is trading just above 100 USD per barrel, and EUR/USD has fallen below 1.17.

These levels are away from the extremes seen earlier during the conflict. Implied EUR/USD volatility remains comparatively low.

Currency impacts may grow if the war intensifies again in the coming months. The article was produced with the help of an AI tool and reviewed by an editor.

We are seeing a disconnect in the market following the failure of US-Iran negotiations. The threat of a blockade in the Strait of Hormuz, a conduit for nearly 20% of global oil consumption, is not being fully priced in. Brent crude is currently holding around $104 per barrel, far below the $130 levels we saw during the initial energy shock of 2022.

Options And Volatility Positioning

This market calmness suggests traders still expect a diplomatic solution, keeping risk premiums unusually low. For instance, one-month implied volatility for EUR/USD is hovering around 6.5%, a level we haven’t seen since before these tensions began in 2025. This environment makes buying protection relatively cheap for those who anticipate a potential shock.

Considering the significant volume of energy that could be disrupted, purchasing out-of-the-money call options on Brent crude for the coming months could be a prudent strategy. These options are currently inexpensive and provide exposure to a sharp upward move if the Hormuz situation deteriorates. Similarly, the low volatility in the currency market presents an opportunity to acquire EUR put options at a discount.

Looking back at the initial ceasefire in late 2025, the market quickly priced in a best-case scenario, a pattern that appears to be repeating now. However, recent satellite data showing an increased naval presence near the Gulf of Oman suggests the underlying risk is growing. This indicates that current option pricing may not accurately reflect the potential for a sudden flight to the safety of the US dollar.

The primary risk for the market is a sharp repricing of volatility from these suppressed levels. A sudden escalation could trigger a rapid unwinding of complacent positions, leading to outsized moves in both energy and currency markets. Therefore, traders holding long volatility positions stand to benefit should the market’s hope for de-escalation prove to be misplaced.

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Silver (XAG/USD) recovered about half of its earlier losses and traded near $74.35 in early European deals on Monday, but remained almost 2% lower. The move came as oil prices rebounded after planned US–Iran talks in Pakistan failed.

US President Donald Trump said on Truth Social that efforts towards a permanent Middle East ceasefire did not succeed, after Tehran denied dropping its nuclear aims. Trump then instructed the US Navy to blockade maritime traffic entering and leaving Iranian ports.

In an interview with Fox Business, Trump said US petrol prices could stay at current levels or rise through the November elections. Higher oil prices have lifted inflation expectations and may increase bets on near-term Federal Reserve rate rises, which can weigh on non-yielding metals such as silver.

In late March, traders priced in two Fed rate hikes for this year, but later removed those expectations after a two-week US–Iran ceasefire was announced. At the time of writing, XAG/USD stayed near the 20-day EMA at about $75.05, with the RSI struggling to move above 50.00.

Support is seen near $73.74. A daily close above $75.05 could allow a rebound towards the April 2 high of $81.13.

Given the events leading up to today, April 13, 2026, the immediate outlook for silver appears negative. The recent breakdown in US-Iran negotiations has caused a spike in oil prices, with WTI crude now trading above $92 per barrel, pushing inflation expectations sharply higher. This directly undermines the case for holding a non-yielding asset like silver.

We are seeing a major repricing of Federal Reserve interest rate expectations based on this new inflationary pressure. Fed funds futures now imply a greater than 70% probability of a rate hike by the June meeting, a dramatic shift from late March when such bets were almost nonexistent. This renewed hawkish sentiment from the Fed is a significant headwind for silver prices.

In the coming weeks, derivative traders should consider strategies that benefit from falling prices or rising volatility. Buying put options with strike prices below the key $73.74 support level could prove effective if the naval blockade continues to disrupt oil markets. This level is a critical line that, if breached, could signal a much deeper price correction.

The heightened geopolitical risk means volatility is likely to remain elevated, and we should be prepared for sharp price swings. The Cboe Silver ETF Volatility Index (VXSLV) has already jumped 15% in the past week, suggesting traders are bracing for significant moves. This environment makes defined-risk option strategies more appealing than outright shorting of futures contracts.

We will be watching the 20-day moving average around $75.05 as a crucial pivot point. Any failure by silver to reclaim this level on a daily closing basis will reinforce the bearish outlook. However, a decisive move back above this mark would suggest the immediate selling pressure has exhausted itself and would force us to reassess our short-term negative bias.

EUR/CAD traded near 1.6200 in Asian hours on Monday after trimming earlier losses, but remained lower. The Euro weakened as risk aversion rose after US–Iran talks ended without a deal.

US Vice President JD Vance said discussions in Islamabad finished after 21 hours with no agreement. President Donald Trump said a blockade on ships entering and leaving Iranian ports will start on April 13 at 10:00 AM ET (14:00 GMT).

Eurozone annual inflation rose to 2.5% in March, the highest since January 2025, and above the ECB’s 2% target. ECB President Christine Lagarde said policy will stay restrictive until inflation returns to target on a lasting basis.

Nordea projected four 25-basis-point rate rises starting in June. The note said wider price pressures remain even if the conflict ends.

The Canadian Dollar may gain support from higher oil prices, as Canada is the largest crude exporter to the US. WTI was over 7% higher, near $96.90 per barrel.

Oil rose amid renewed US–Iran tensions and concerns about a possible Strait of Hormuz blockade. The CAD is also linked to Bank of Canada rates, inflation, trade balance, market mood, and US economic conditions.

The breakdown of US-Iran talks is creating a classic risk-off mood in the markets, which is weighing on the Euro. With a US blockade of Iranian ports beginning today, we should anticipate continued uncertainty driving investors away from currencies like the EUR. This situation presents a clear signal for caution regarding any long Euro positions.

The Euro is also dealing with internal pressures, as March inflation hit 2.5%, remaining stubbornly above the European Central Bank’s target. We saw a similar dynamic in early 2022, when geopolitical stress in Europe caused the Euro to fall even as inflationary pressures were building towards future rate hikes. The current geopolitical fear is likely to overshadow the ECB’s hawkish stance for now.

On the other side of the trade, the Canadian Dollar is getting a major boost from the surge in oil prices, with WTI crude now trading near $97 a barrel. With Canada exporting over 4 million barrels of oil per day, mostly to the US, these higher prices will directly strengthen its trade balance and support the currency. This makes the CAD one of the more attractive currencies in the current environment.

This clear divergence between a struggling Euro and a commodity-backed Canadian Dollar suggests a bearish outlook for the EUR/CAD pair. We believe that buying put options on EUR/CAD is a prudent strategy for the coming weeks. This approach allows traders to profit from a potential decline in the pair while defining and limiting their maximum risk.

We must also prepare for a spike in market volatility, as threats to oil supply through the Strait of Hormuz historically create sustained uncertainty. We saw this back in 2019 when similar tensions led to sharp, unpredictable moves in energy and currency markets. This elevated volatility will make options pricing more expensive but also reflects the significant opportunities and risks ahead.

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GBP/USD opened the week with a bearish gap, ending a five-day rise after reaching about 1.3485 last week. It rebounded from the Asian low to near 1.3400, down almost 0.45% on the day.

Market mood weakened after US-Iran talks ended without a deal, following nearly 21 hours of discussions. President Donald Trump said the US Navy would begin blockading the Strait of Hormuz, increasing Middle East tension risks and threatening a two-week ceasefire.

The shift towards caution supported the US Dollar and pressured GBP/USD. Higher oil prices added to inflation concerns, reinforcing demand for the Dollar.

On Friday, data showed US inflation rose by the most in nearly four years in March. This reduced expectations for Federal Reserve rate cuts and increased focus on possible rate rises this year, lifting US Treasury yields.

Expectations for a more hawkish Bank of England stance helped limit sterling losses. The BoE has indicated a possible rate rise as early as April, while the UK economy remains exposed to energy price shocks linked to the Iran conflict.

Traders appeared cautious about adding bullish sterling positions without clearer follow-through. The pair’s recent rebound began from the mid-1.3100s, near the year-to-date high set on 31 March.

Looking back at the market situation in 2025, we saw how failed US-Iran talks and a hawkish Federal Reserve created a difficult environment for GBP/USD. Today, on April 13, 2026, the pair is trading much lower around 1.2550, but the drivers have fundamentally shifted. The key takeaway for us is how geopolitical risk consistently boosts the dollar, regardless of the source.

That recurring theme of geopolitical tension is present again, though the focus has moved from the Middle East to renewed naval disputes in the South China Sea. This has provided a floor for the US dollar, as evidenced by the VIX volatility index climbing to 19 last week from a low of 14. This safe-haven demand is capping any significant upside for the pound in the immediate term.

The most critical change for traders, however, is the divergence in central bank policy. Unlike 2025 when the Fed was looking to hike, recent US CPI data showing inflation cooling to 2.8% has markets pricing in a potential rate cut by the third quarter. In contrast, stubbornly high UK inflation, which printed at 3.5% last month, is forcing the Bank of England to maintain its restrictive stance.

This policy divergence is creating a potential long-term tailwind for the pound against the dollar. While the geopolitical situation from last year taught us that oil price shocks can complicate the BoE’s job, the current stability of WTI crude around $85 a barrel is less of an inflationary threat. It instead allows the interest rate differential between the UK and the US to become a more dominant factor for currency traders.

Given this backdrop, we should consider using options to position for potential GBP/USD upside while managing downside risk from global tensions. Buying June call options with a strike price around 1.2700 offers a defined-risk way to profit if the central bank narrative drives the pair higher. This strategy allows us to participate in a rally while limiting our potential loss to the premium paid if dollar strength unexpectedly returns.

Therefore, our focus should be on key upcoming data points that could confirm this policy split, specifically the next US PCE inflation report and the UK employment figures. Last year showed us how quickly sentiment can turn, so waiting for data to validate the interest rate differential theme is a prudent approach. Any signs of weakening US economic data will likely accelerate bets on Fed cuts and strengthen our bullish case for GBP/USD.

US President Donald Trump said on Truth.Social that a blockade on ships entering or leaving Iranian ports will start today, April 13, at 10:00 AM ET (14:00 GMT).

The post stated the United States would enforce the blockade from that time.

Market Response And Volatility Outlook

After the post, there was no immediate movement in the US Dollar (USD) or WTI oil prices.

The information had already been shared earlier in the day by the US Central Command (CENTCOM).

The market may seem calm now, but this is deceptive. We should anticipate a significant spike in implied volatility for oil contracts over the coming weeks as the blockade’s real-world impact begins. The Cboe Crude Oil Volatility Index (OVX), which has been trading near yearly lows, is likely to surge, making long volatility strategies attractive.

Strait Of Hormuz Risk And Pricing Impact

This blockade directly threatens the Strait of Hormuz, through which about 21 million barrels of oil, or 20% of global supply, pass daily. We are positioning for a potential price shock by buying out-of-the-money call options on Brent futures, which are more sensitive to Mideast tensions than WTI. Looking back at the market’s reaction in 2019, when attacks on Saudi facilities caused Brent to jump nearly 20% in a single day, shows how quickly the situation can escalate.

The immediate removal of Iran’s roughly 2.5 million barrels per day of exports from the market will tighten global balances considerably. We are closely watching statements from OPEC+, as their limited spare production capacity, estimated at under 4 million bpd, might not be enough to calm fears of a shortage. Any hesitation from them to increase output will add fuel to the bullish case for crude prices.

We are also looking at the Brent-WTI spread, which we expect to widen significantly as the risk is concentrated in the Eastern Hemisphere. Derivative plays on major tanker operators are now on the table, as their insurance and operational costs will soar due to the heightened risk. Similarly, call options on major defense contractors could prove profitable if the military standoff persists.

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Gold prices in Saudi Arabia fell on Monday, based on FXStreet data. Gold was priced at SAR 570.14 per gram, down from SAR 572.86 on Friday.

Gold dropped to SAR 6,650.00 per tola from SAR 6,681.67 on Friday. Other listed prices were SAR 5,701.44 for 10 grams and SAR 17,732.99 per troy ounce.

Saudi Gold Price Snapshot

FXStreet derives Saudi gold prices by converting international prices using the USD/SAR rate and local units. The figures are updated daily using market rates at the time of publication, and local prices may vary.

Central banks were reported as the largest gold holders. They added 1,136 tonnes of gold worth about $70 billion in 2022, according to the World Gold Council.

Gold is described as often moving in the opposite direction to the US Dollar and US Treasuries. It can also move against risk assets such as shares, and it may react to interest rates, recession fears, and geopolitical events.

The minor dip in gold prices to 570.14 SAR per gram reflects a momentary pause in the international markets. We see the price hovering around the $2,450 per ounce level, which presents a critical point for traders. This slight pullback could be a temporary consolidation rather than a change in trend.

Market Drivers And Outlook

As a non-yielding asset, gold’s future direction is heavily tied to interest rate expectations. With the CME FedWatch tool now showing a 65% chance of a rate cut by the end of 2026, the opportunity cost of holding gold is perceived to be decreasing. This fundamental shift is providing a strong tailwind for the metal.

We should also consider gold’s role as a safe-haven asset amid rising geopolitical tensions. Looking back at the central bank buying spree of 2025, we can see that trend has continued, with the latest World Gold Council data for Q1 2026 showing another 250 tonnes added to reserves. This consistent demand from official sources creates a solid price floor.

The inverse correlation with the US dollar remains a key factor in our analysis. The Dollar Index (DXY) has recently softened from its highs, trading around 103.5 as markets price in a more dovish Federal Reserve. A weaker dollar makes gold cheaper for foreign buyers, potentially boosting demand.

For derivative traders, the recent uptick in the CBOE Gold Volatility Index to 18 suggests now is a time to manage risk and position for potential upside. This environment could be favorable for strategies like buying call spreads to target a move towards the $2,500 level while limiting the upfront premium cost. Selling cash-secured puts below current support levels could also be a way to collect premium while expressing a bullish-to-neutral view.

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AUD/JPY reduced its daily losses but stayed negative, trading near 112.40 in Asian hours on Monday. The move came as the Australian Dollar weakened amid higher risk aversion after US Vice President JD Vance said Washington and Tehran did not reach a peace agreement in Islamabad after 21 hours of talks.

US President Donald Trump said the US would begin blockading all ships entering or leaving the Strait of Hormuz. US Central Command confirmed operations targeting maritime traffic to and from Iranian ports from 10 AM ET (14:00 GMT) Monday.

Australia Inflation And Rate Outlook

Higher energy costs added to inflation concerns, with Australia’s monthly inflation gauge at a record 1.3% in March. The Reserve Bank of Australia has raised rates by 50 basis points to 4.10%, and markets expect another hike in May.

The yen faced stagflation worries as oil prices rose, while higher energy costs increased expectations of a near-term Bank of Japan rate rise. The BoJ is due to decide policy on April 28, assessing whether elevated global energy and commodity prices support tightening.

Japan’s 10-year government bond yield rose to about 2.47% on Monday as oil prices climbed after the talks broke down. The Sakura Report said members weighed inflation risks against growth risks, while all nine regions described conditions as “recovering moderately”, “picking up”, or “picking up moderately”.

Given the spike in risk aversion from the US-Iran situation, we should expect volatility to jump across asset classes. Historically, geopolitical events in the Middle East cause the VIX index to surge, as we saw in late 2023. We should therefore consider buying options that profit from large price swings, as markets are likely to remain unsettled.

Oil Supply Shock And Trade Positioning

The US blockade of the Strait of Hormuz directly threatens a significant portion of the world’s oil supply, as historically around 20% of global consumption passes through it. This makes long positions in crude oil futures or call options a direct way to trade the escalating tensions. A supply shock of this magnitude could push prices far higher than we saw during the energy crisis that began in late 2025.

For the AUD/JPY pair, conflicting pressures make a simple directional bet risky. The AUD is suffering from risk-off sentiment, but the RBA’s aggressive rate hikes offer support, while the JPY is weakened by soaring energy import costs. This suggests that the classic carry trades, like those we saw unwind during the 2008 financial crisis, are under extreme pressure from both sides.

The upcoming Bank of Japan meeting on April 28 is now a critical event. The surge in Japan’s 10-year bond yield to 2.47% signals intense market pressure on the BoJ to hike rates to combat imported inflation. We can use derivatives to position for a significant market reaction to this decision, as any policy shift will cause a major repricing in the Yen.

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Gold prices in the Philippines fell on Monday, based on FXStreet-compiled data. Gold was priced at PHP 9,169.20 per gram, down from PHP 9,215.81 on Friday.

Gold also moved lower on a per-tola basis, easing to PHP 106,947.80 from PHP 107,491.40 on Friday. Other listed prices were PHP 91,692.88 for 10 grams and PHP 285,193.90 per troy ounce.

Philippine Gold Price Snapshot

FXStreet converts international gold prices into Philippine pesos using the USD/PHP exchange rate and local measurement units. Prices are updated daily using market rates at the time of publication, and local prices may vary slightly.

Central banks are the largest holders of gold. They added 1,136 tonnes worth around $70 billion in 2022, according to the World Gold Council, the highest annual total since records began.

Gold is described as having an inverse relationship with the US Dollar and US Treasuries, and it is also inversely linked to risk assets. Its price can be affected by geopolitical events, recession fears, interest rates, and movements in the US Dollar, because gold is priced in dollars (XAU/USD).

The recent dip in gold prices to 9,169.20 PHP per gram presents a notable data point for us. This slight pullback could be interpreted as a temporary consolidation or a potential entry point for new positions. Traders should watch if this level holds or if further weakness develops in the coming days.

Trading Considerations For Gold

The key driver against gold right now is the strong US dollar, with the Dollar Index (DXY) holding firm above 105. This strength follows recent US inflation data for March 2026 coming in slightly hotter than expected, dampening expectations for imminent rate cuts from the Federal Reserve. As a non-yielding asset, gold typically struggles when interest rates are expected to remain high.

However, we also see strong underlying support from central bank buying, a trend that continued from 2025. The World Gold Council recently reported that central banks collectively bought over 200 tonnes in the first quarter of 2026, with emerging markets leading the purchases. This consistent demand creates a solid price floor and suggests that major institutions see long-term value at these levels.

Geopolitical risk also remains a primary catalyst for gold’s safe-haven appeal. Ongoing tensions in the Middle East and Eastern Europe are keeping investors on edge. Any escalation in these conflicts would likely trigger a flight to safety, pushing gold prices higher regardless of the dollar’s performance.

We remember how gold reacted during the banking sector instability we witnessed in early 2025, surging as investors fled risk assets. That period demonstrated gold’s inverse correlation with market stability and serves as a reminder of how quickly sentiment can shift. A similar risk-off event in the stock market could easily ignite another rally.

For derivatives traders, this environment of conflicting signals suggests a period of potential volatility. Using options to construct a long straddle could be a prudent strategy, allowing one to profit from a large price swing in either direction without betting on the outcome. The current setup is a tug-of-war between a strong dollar and persistent safe-haven demand.

Those trading futures might consider the current weakness an opportunity to build a long position, but discipline is essential. Given the dollar’s strength, using tight stop-losses is crucial to manage downside risk. A decisive break below recent support levels could signal a deeper correction before the long-term bullish factors reassert themselves.

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