Silver (XAG/USD) traded around $75.00 on Wednesday as US Treasury yields reduced earlier losses. The metal did not break above the 20-day simple moving average (SMA) at $76.90, and it was last at $75.07, little changed. The price trend remains upward overall, but the failure at the 20-day SMA has kept XAG/USD near $75.00. This has raised questions about the March 31 breakout, while the Relative Strength Index (RSI) has levelled off in bearish territory. If XAG/USD moves back above the 20-day SMA, it could extend gains beyond $77.00 towards $80.00. Further resistance is at the 50-day SMA, set at $83.62. If the price drops below the 100-day SMA at $74.43, the next support is near $70.00. Below that, support sits at the March 26 swing low of $66.72. Looking back at this analysis from early 2025, we recall the hesitation in the silver market as it consolidated around the $75.00 mark. The failure to overcome the 20-day SMA was a key indicator that buyers were losing control at that time. That period of doubt, where the March 31, 2025 breakout was questioned, ultimately set the stage for the next major leg. That sideways movement proved temporary, as the market did briefly test lower support levels near $70.00 in the second quarter of 2025. The real catalyst for the subsequent rally emerged in late 2025, when persistent inflation figures and a more dovish outlook from the Federal Reserve weakened the US dollar. The Commodity Futures Trading Commission (CFTC) data from that period showed a significant increase in net-long positions by money managers, confirming a shift in sentiment. This fundamental shift was supported by robust industrial demand, especially after reports in late 2025 highlighted a nearly 20% year-over-year increase in silver consumption for photovoltaics. That technical resistance at the 50-day SMA of $83.62, which seemed so significant in April 2025, was decisively broken in the third quarter. From our current perspective today, that price action was a clear accumulation phase before the trend accelerated. Given that silver is now trading at much higher levels, we should anticipate increased volatility in the coming weeks. Traders could consider using options to define risk, perhaps by selling out-of-the-money puts on any significant price dips to collect premium, reflecting a belief in the continued strength of the underlying trend. We must now watch the new major psychological level of $100.00 as the next area of interest.

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Silver (XAG/USD) was steady near $75.00 on Wednesday after it failed to break above the 20-day simple moving average (SMA) at $76.90. It was last at $75.07 as US Treasury yields reduced earlier losses. The price remains above recent levels, but the failure at the 20-day SMA has kept it near $75.00 and raised questions about the March 31 breakout. The Relative Strength Index (RSI) has flattened in bearish territory, pointing to weaker buying momentum. A move higher would require a break above the 20-day SMA, with $77.00 as the next level, then $80.00. Further resistance is at the 50-day SMA at $83.62. On the downside, a fall below the 100-day SMA at $74.43 would bring $70.00 into view, followed by the March 26 swing low at $66.72. Looking back at early April of 2025, we saw silver struggling around the $75 mark, unable to break past its 20-day moving average. Today, the picture is quite different, with the metal holding strong above $85. This shows a significant shift in market sentiment from the consolidation we experienced last year. We believe this strength is supported by institutional positioning, as recent CFTC data shows managed money has increased its net-long silver positions to a six-month high. Unlike the weakening momentum we saw in 2025, large traders are now betting on further price increases. This makes buying call options or establishing long futures positions an attractive strategy on any minor dips. Furthermore, the fundamental picture has improved dramatically since last year. Projections for 2026 indicate a 12% increase in silver demand from the solar panel industry alone, creating a tight physical market. This underlying industrial demand provides a strong price floor that was less certain during the sideways trading of 2025. However, we must not ignore the risks, remembering how quickly the rally stalled in 2025 when momentum faded. The latest US inflation report came in hotter than expected at 3.1%, which could delay anticipated interest rate cuts and strengthen the dollar. Traders should consider using put options to hedge long positions, especially if the price fails to hold the $82 level, which could signal a temporary pullback.

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BNY data describe Latin America as resilient across asset classes. Regional currencies are described as overheld, and regional equities are reported to have attracted net inflows despite wider risk-off conditions. The data also state LatAm was the best-performing equity region. It is reported as the only regional aggregate to record net inflows while starting from an overheld position.

Brazil And Peru Split

Within the region, Brazil and Peru are presented as following different patterns. Brazil is described as more diversified, supported by food and energy exports and one of the highest nominal interest rate levels in emerging markets. Peru is described as more concentrated, with the currency and equity market closely tied to silver prices. Both markets are said to have been bought over the year, but their year-to-date flow trends are described as almost completely opposite. The report links Peru more to risk-on theme positioning and volatile real assets. It also notes Peruvian equities are now outperforming Brazil for the first time since the conflict began, alongside stronger risk preference than broader markets. Latin America continues to stand out, drawing in money when other markets are struggling. We see a clear split within the region, creating a strategy for traders in the coming weeks. Brazil acts as a stable hedge, while Peru offers a more aggressive, risk-on play.

Trading Implications Going Forward

Brazil’s appeal comes from its diversification and high interest rates, giving it a safe-haven feel in the region. The central bank’s decision to hold the Selic rate at 9.75% last week provides a strong buffer for the currency, attracting carry traders. This makes options on the Bovespa index or the EWZ ETF attractive for those seeking stable, yield-driven exposure amid global uncertainty. Peru, on the other hand, is almost a pure bet on silver and a willingness to take on risk. We’ve seen silver prices surge over 8% in the last month to break above $32 an ounce, driving the EPU ETF up by 12% since early March. Traders feeling bullish on industrial metals and global growth should consider call options on Peruvian equities to capitalize on this momentum. Looking back at the market recovery throughout 2025, we saw this divergence begin to take shape. Brazil’s steady performance provided a foundation, but Peru’s assets began to outperform as investors grew more confident. This shift suggests that for now, the market prefers concentrated, high-beta assets in regions insulated from global turmoil. Create your live VT Markets account and start trading now.

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BNY data describe Latin America as resilient across asset classes, with regional currencies described as overheld. The region is described as the best-performing equity area and the only regional aggregate to record net inflows despite wider risk-off conditions. The report says there are differences between markets within the region. Brazil is described as a diversified, high-yield market supported by food and energy exports and among the highest nominal rates in emerging markets.

Brazil And Peru Market Split

Peru is described as more concentrated, with currency and equities closely linked to silver prices. Both markets are described as bought over the year, but their year-to-date flow trends are described as almost completely opposite. The note links Peru more to risk-on positioning and concentrated trades, and Brazil to broader diversification across commodities and rates. It also states Peruvian equities are outperforming Brazil for the first time since the conflict began, and links this to stronger risk preference within a region described as insulated from current events. We see Latin America as a resilient region, even with ongoing global market uncertainty. Brazil’s central bank has held its Selic interest rate at 9.0%, providing a high-yield buffer that proved effective during the market corrections we witnessed in 2025. This elevated rate structure continues to make the country a compelling regional safe haven. The Brazilian market offers a diversified hedge because of its broad commodity exposure, with strong Q1 2026 export figures in soybeans, iron ore, and oil. This diversification insulates it from the price swings of a single resource, unlike its regional peers. For derivative traders, this makes options on the Brazilian real a solid strategy to capture yield while managing volatility.

Flows And Trade Positioning

Peru, on the other hand, operates as a high-beta play directly tied to industrial metals. With silver prices rallying over 12% since January due to increased demand for solar and EV components, Peruvian assets have followed suit. Call options on Peruvian equities are therefore a direct wager on continued positive risk sentiment and the strength of the green energy transition. This split is evident in market flows, as the iShares MSCI Peru ETF (EPU) has gained 15% this year, outpacing the more modest 6% rise in the iShares MSCI Brazil ETF (EWZ). This signals a growing preference for concentrated risk, a trend not seen since before the interest rate hikes of 2025. Traders can use this divergence to structure pairs trades, calibrating their exposure based on their outlook for global risk appetite. Create your live VT Markets account and start trading now.

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US Treasury yields rose across the curve on Wednesday, with the 10-year note recovering after earlier falls. Strong US data raised the chance that interest rates stay unchanged through the year. March ADP Employment Change was 62K, above forecasts of 40K, and 4K below February. February Retail Sales rose 0.6% month on month, beating 0.5% forecasts and reversing January’s -0.1%.

Manufacturing Prices Signal Persistence

ISM data showed US manufacturing activity grew in March. The survey also reported factory input prices at their highest level in almost four years. Federal Reserve officials said inflation still needs to move towards the 2% target. Michael Barr said more work is needed, Thomas Barkin said action would be warranted if inflation expectations rise, and Alberto Musalem said policy is “well positioned” near the low end of neutral, while warning supply shocks can raise inflation risks. The US Dollar Index fell 0.27% to 99.58. Five-year breakeven inflation was 2.54% versus 2.57% the day before, while the 10-year rate eased from 2.31% to 2.3%. Markets next watch Initial Jobless Claims and Fed speeches on Thursday. Focus then turns to March Nonfarm Payrolls on Friday, during a US holiday.

Positioning For Higher For Longer

The recent batch of strong economic data suggests we should position for interest rates remaining higher for longer. With both hiring and retail sales beating expectations, the odds of the Federal Reserve cutting rates in the near future have diminished significantly. We believe traders should look at options strategies on Treasury futures that profit from yields either holding steady or creeping higher in the coming weeks. This disconnect between stubborn inflation and the market’s hope for rate cuts will likely lead to increased volatility. The report showing factory input prices at a four-year high is a major warning sign that inflation is not fully defeated, yet the VIX index of volatility remains near its historic lows around 15. Buying call options on the VIX is a relatively cheap hedge against a market overreaction to Friday’s jobs report or other surprises. We see the current weakness in the US Dollar Index as a temporary mispricing and a clear opportunity. Strong US economic performance stands in contrast to sluggish growth in other major economies, a dynamic that historically strengthens the dollar; looking back, we saw this in early 2024 when a similar data pattern sent the DXY up 4% in a single quarter. This suggests traders should consider call options on the dollar, betting on a rebound as the market digests the Fed’s steady stance. The decline in medium-term inflation expectations, with the 10-year breakeven rate falling to 2.3%, shows the market believes the Fed will succeed eventually. However, this creates a conflict with the immediate, real-world data showing persistent price pressures. We can use derivatives to trade this gap, such as positioning in inflation swaps that bet on near-term inflation running hotter than these lowered expectations imply. Create your live VT Markets account and start trading now.

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US Treasury yields rose across the curve on Wednesday. The 10-year note reversed earlier falls after firm US data increased the chance of interest rates staying unchanged this year. March ADP Employment Change was 62K, above forecasts of 40K, but 4K below February. February Retail Sales rose 0.6% month on month, beating forecasts of 0.5% and reversing January’s -0.1%. US manufacturing expanded in March, based on the ISM survey. The prices-paid measure for factory inputs reached its highest level in almost four years. Federal Reserve officials restated the aim of moving inflation towards 2%. Michael Barr said more work is needed, Thomas Barkin said rising inflation expectations would warrant action, and Alberto Musalem said policy is “well positioned” near the low end of neutral, while noting supply shocks pose inflation risks. The US Dollar Index fell 0.27% to 99.58. Five-year breakeven inflation expectations were 2.54%, down from 2.57%, and the 10-year breakeven rate edged down from 2.31% to 2.3%. Initial Jobless Claims and further Fed speeches are due on Thursday. Focus then shifts to March Nonfarm Payrolls on Friday, during a US holiday. From the perspective of 2025, the economic data showed unexpected strength, justifying the Federal Reserve’s decision to maintain high interest rates throughout that year. We saw both employment and retail sales figures exceed forecasts, which meant that bets on early rate cuts were misplaced. This environment favored traders who were positioned for a prolonged period of policy restriction. Today, the picture is much different, and our strategy must adapt. The labor market is showing signs of cooling, with the latest March 2026 ADP employment report coming in at 150,000, just shy of the 165,000 consensus. This contrasts sharply with the surprising strength we observed a year ago. The high factory input prices that concerned officials in 2025 have since moderated significantly, with the latest Core PCE inflation data for February 2026 registering at 2.3%, much closer to the Fed’s target. Consequently, Fed commentary has pivoted from fighting inflation to discussing the timing of potential rate cuts later this year. This makes options that bet on lower interest rates, such as SOFR futures puts or Treasury call options, more compelling. This policy shift is reflected in Treasury yields, with the 10-year note currently trading around 3.85%, a stark contrast to the upward pressure we saw in 2025. Inflation expectations have also anchored, as the 10-year breakeven rate holds steady near 2.25%, below the 2.3% levels seen a year ago. This suggests the market believes the Fed has successfully controlled long-term price pressures. Given the uncertainty around the exact timing of the first rate cut, we should anticipate increased volatility in interest rate markets. Derivative strategies that profit from price swings, like straddles on Treasury bond ETFs, could be advantageous in the coming weeks. Upcoming data, particularly the next Nonfarm Payrolls and CPI reports, will be critical in shaping expectations and should be watched closely.

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ING’s Min Joo Kang expects the Bank of Korea (BoK) to keep its policy centred on inflation stabilisation and financial stability, alongside resilient growth and rising price pressures. She forecasts March CPI inflation at 2.5% year on year, above the market consensus of 2.3%. Petrol prices are expected to rise despite a government fuel price cap and a further fuel tax cut. A sharp rise in import prices is also expected to add pressure to a broader range of goods prices.

Inflation Risks Remain Tilted Upwards

Higher energy prices for longer, along with supplementary budget measures, are expected to lift inflation risks in the coming months. This keeps the balance of inflation risks tilted upwards. Based on this outlook, a shift towards policy easing is expected to be delayed. The forecast includes a 25bp rate rise in July, under the new governor, Shin Hyun Song. Looking back to early 2025, we recall the expectation that resilient growth and rising prices would force the Bank of Korea into another rate hike. The forecast at the time pointed towards a potential 25 basis point increase in July 2025 due to inflation risks from energy costs. This view was based on the idea that the central bank would have to prioritize inflation over supporting growth. However, the Bank of Korea ultimately held its policy rate steady at 3.50% throughout all of 2025 and into this year. While inflation did prove sticky, peaking at 3.7% in August 2025, slowing export growth and concerns over the property market led the central bank to pause. This divergence from the predicted hike shows how financial stability concerns can override a purely inflation-focused mandate.

Market Implications For Rates

As of today, April 2, 2026, inflation remains a key concern, with the latest March CPI data coming in at 3.1%, stubbornly above the BoK’s 2% target. This persistent inflation, combined with the central bank’s continued hawkish tone, means that expectations for rate cuts are being pushed further out. Markets are now pricing in a very shallow easing cycle, if any, for the second half of this year. For derivative traders, this suggests that positioning for a “higher-for-longer” interest rate environment in Korea remains a viable strategy in the coming weeks. We believe paying fixed on short-dated Korean Won interest rate swaps (IRS) is an attractive trade, as it profits if the market continues to price out imminent rate cuts. This is especially true for the 1-year and 2-year tenors, which are most sensitive to near-term policy shifts. This outlook also implies that yields on Korea Treasury Bonds (KTBs) are unlikely to fall significantly. Traders should therefore be cautious about long positions in KTB futures and could consider shorting them on any rallies. The persistent inflation and hawkish central bank stance create a ceiling for bond prices in the near term. On the currency front, the hawkish BoK should theoretically support the won, but weak export data has kept the USD/KRW pair elevated, recently trading near 1,350. This creates a tug-of-war, suggesting volatility may rise in the pair. Using options, such as buying a straddle on USD/KRW, could be a way to trade this uncertainty without picking a specific direction. Create your live VT Markets account and start trading now.

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ING forecasts South Korea’s CPI inflation at 2.5% year on year in March, above the 2.3% market consensus. The view is that the Bank of Korea will prioritise inflation control and financial stability as growth holds up and price pressures rise. Petrol prices are expected to increase despite a government fuel price cap and a further fuel tax cut. A sharp rise in import prices is also expected to push up a wide range of goods prices.

Inflation Risks And Policy Bias

Higher energy costs persisting for longer, along with supplementary budget measures, are cited as factors that may add to upward inflation risk in the coming months. Based on these conditions, a 25 basis point Bank of Korea rate rise is projected for July, under new governor Shin Hyun Song. The article notes it was created with help from an AI tool and reviewed by an editor. We believe the Bank of Korea will remain focused on inflation and financial stability in the near term. The combination of a resilient economy and building price pressures makes a policy shift towards easing unlikely for now. We now see a 25 basis point interest rate hike in July as a significant possibility. This view is strengthened by recent data, as the official March consumer price index was just released, showing a 2.6% year-over-year increase, beating market expectations. On top of that, preliminary Q1 GDP figures indicated surprising strength, fueled by robust exports and a pickup in domestic consumption. These figures give the central bank more room to prioritize fighting inflation. For derivatives traders, this means the short end of the interest rate swap curve should continue to price in a more hawkish outcome. We expect to see increased activity from those looking to pay the fixed rate on swaps to position for higher rates ahead. This trade will likely gain traction as we approach the July meeting.

Market Positioning Implications

In the bond market, this outlook suggests a bearish stance on Korea Treasury Bond (KTB) futures. As expectations for a rate hike solidify, bond prices will face downward pressure. Traders should consider establishing short positions in KTB futures to capitalize on this expected move. This policy direction should also provide a tailwind for the Korean Won. A rate hike would increase the yield advantage of holding the currency, likely leading to its appreciation against the US dollar. Positioning for a stronger Won through options or forward contracts could be a prudent strategy over the next several weeks. We saw a similar dynamic during the post-pandemic hiking cycle in 2022 when the Bank of Korea moved decisively ahead of many other central banks. Looking back, that proactive stance helped to anchor inflation expectations and support the currency. The current environment feels like a similar setup, rewarding those who position for tighter policy early. Using options can offer a more defined risk approach to these developing themes. Traders could look at buying put options on KTB futures to gain bearish bond exposure. Similarly, call options on the Korean Won would provide a capital-efficient way to bet on currency strength. Create your live VT Markets account and start trading now.

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Bank Negara Malaysia (BNM) raised its 2026 growth forecast to 4.0–5.0% from 4.0–4.5% in its 2025 Annual Report. The change was linked to resilient domestic demand. BNM expects consumption and investment to be supported by wages, a strong labour market and government measures. It also said inflation could face pressure from the Middle East conflict.

Growth And Inflation Outlook

Inflation is projected at 1.5–2.5% this year, compared with the government’s 1.3–2.0% forecast. The outlook assumes Brent crude prices of USD70–90. BNM is expected to keep the Overnight Policy Rate at 2.75% for the rest of the year and through 2026. Any rate cuts would depend on a material slowdown in growth. With Bank Negara Malaysia signalling a stable outlook, we should anticipate low volatility in local interest rate markets. The central bank’s commitment to holding the Overnight Policy Rate at 2.75% is backed by recent data showing March inflation holding steady at 1.8%, well within the target range. This suggests that selling options on interest rate futures, to profit from the lack of movement, could be a viable strategy in the coming weeks. The steady policy rate makes the Malaysian ringgit attractive, especially with continued strong domestic growth, as confirmed by the recent 4.2% GDP growth figure for the first quarter of 2026. We have seen the ringgit gain against the US dollar to below 4.68, and this trend may continue if other central banks consider easing their policies. Traders could look at call options on the ringgit to capitalize on this interest rate differential and positive economic momentum.

Equity Market Implications

This improved growth forecast of 4.0-5.0% should directly benefit domestically-focused companies, supporting the local equity market. The FTSE Bursa Malaysia KLCI index is already up over 3% this year, reflecting the strong labour market where unemployment recently fell to 3.3%. We see opportunities in buying call options or futures on the index, betting that resilient consumer spending will continue to drive corporate earnings higher. We remember how in mid-2025 there were concerns about a potential rate hike, but the bank remained patient, a stance that now appears justified. The main risk to this stable view remains oil prices, with Brent crude currently trading at $88 per barrel, near the top of the bank’s assumed $70-90 range. A sustained break above this level could force BNM to reconsider its stance on inflation and interest rates. Create your live VT Markets account and start trading now.

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Bank Negara Malaysia (BNM) raised its 2026 growth forecast to 4.0–5.0% from 4.0–4.5% previously, citing resilient domestic demand. Consumption and investment are supported by wage growth, a firm labour market and government measures. BNM expects inflation to remain moderate at 1.5–2.5% this year, compared with the government forecast of 1.3–2.0%. It also expects the Middle East conflict to add to inflation pressures.

Growth Inflation And Policy Outlook

The outlook assumes Brent crude prices of USD70–90. On monetary policy, BNM is expected to keep the Overnight Policy Rate unchanged at 2.75% for the rest of the year. BNM is expected to keep policy steady to preserve room for future action. Rate cuts are described as dependent on a material slowdown in growth. With Malaysia’s growth forecast for 2026 upgraded to a solid 4.0-5.0%, the economic picture is one of confident stability. This suggests that derivative strategies built on low volatility, such as selling options to collect premium, could be favorable in the coming weeks. The central bank’s optimism is anchored in strong domestic demand. The strength of the labor market is a key factor, as the latest data shows the national unemployment rate holding at a low 3.3%. We are seeing this translate directly into consumer spending, with February retail sales showing a year-on-year increase of 5.8%. This continues the trend of resilient household consumption that we observed through much of 2025.

Market Implications For Traders

Concerns about inflation appear contained for now, as Brent crude is trading around USD 85 per barrel, well within the central bank’s assumed range. This supports the projection that price growth will remain moderate, removing a significant variable for traders. This outlook implies that the risk of a sudden inflation-driven policy shift is low. We should not anticipate any change in the Overnight Policy Rate, which is expected to hold at 2.75% through the end of the year. Just as we saw last year, Bank Negara Malaysia is signaling a preference for stability, meaning interest rate swaps and related derivatives will likely trade within a predictable range. Any significant repricing would require a major, unexpected slowdown in the economy. This stable macroeconomic environment is constructive for the Malaysian Ringgit, which has been firming against the dollar recently. Similarly, the FTSE Bursa Malaysia KLCI index has been in a gentle uptrend, reflecting the positive domestic sentiment. Traders could position for continued, gradual appreciation in these assets rather than explosive moves. Create your live VT Markets account and start trading now.

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