US weekly crude oil stocks, as measured by the API, moved from a fall of 4.4 million barrels to a fall of 1.79 million barrels.

The latest reading is dated 24 April. This shows a smaller weekly draw than the previous report.

Api Draw Slows Sharply

The latest API data shows the weekly draw on crude oil inventories has slowed considerably, moving from -4.4M to -1.79M barrels. This suggests that the supply-demand balance is not as tight as it was in previous weeks. For derivative traders, this is a signal that the recent upward momentum in oil prices may be weakening.

We will be watching this week’s official EIA inventory report very closely for confirmation of this trend. Current U.S. crude production is holding strong near 13.1 million barrels per day, a factor that could easily tip inventories into a build if demand falters. A confirming number from the EIA could put significant downward pressure on WTI futures.

Looking at the demand side, finished gasoline inventories have seen surprise builds in recent weeks, indicating that consumer demand heading into the summer driving season might be softer than anticipated. This is a notable shift from the robust demand trends we observed throughout most of 2025. This lagging consumer activity supports a more bearish outlook on crude prices.

In response, we should consider strategies that benefit from flat or falling oil prices. Selling out-of-the-money call credit spreads on WTI futures for June or July expiration could be a prudent way to capitalize on this potential price ceiling. This strategy allows us to profit if the price of oil stays below a certain level.

Risk Premium Meets Softer Fundamentals

This fundamental data shift is important, especially since oil prices have been elevated due to ongoing geopolitical risk premiums, similar to the tensions we saw in the Middle East back in 2024. A weakening supply and demand picture makes those high prices harder to justify. Any easing of international tensions could now cause a more pronounced sell-off.

Furthermore, recent global manufacturing PMI data has been mixed, particularly out of Europe, raising concerns about a broader economic slowdown. A slowdown would directly impact future energy consumption forecasts, giving traders another reason to anticipate less demand pressure. We believe these macroeconomic headwinds are becoming more difficult for the oil market to ignore.

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USD/IDR moved lower after a broad US Dollar pullback and a rise in risk sentiment. Recent Indonesian Rupiah weakness was linked to external uncertainty around a possible prolonged United States–Iran conflict and exposure to energy price shocks.

Iran proposed talks to the US, which may have eased some geopolitical risk, but oil prices remained high. This raised doubts about whether Monday’s rebound in oil-sensitive Asian currencies, including the Rupiah, can continue.

Energy Shock Risk For Indonesia

S&P described Indonesia as the sovereign most vulnerable in South-east Asia to a prolonged energy shock. The pair was last seen at 17195, while the daily chart showed mild bullish momentum fading and RSI trending lower.

Recent moves were described as a short-term exhaustion pattern after a sharp break higher. Support levels were noted at 17100 (21 DMA) and 16960 (50 DMA), with resistance at 17250 and 17315.

Looking back to 2025, we saw the Rupiah face significant pressure from external uncertainties, especially the US-Iran situation. This vulnerability to energy shocks pushed the USD/IDR pair past the 17,200 level. Those conditions prompted a cautious, risk-off stance in the market.

As we anticipated, a de-escalation in geopolitical tensions through late 2025 and early 2026 has allowed the Rupiah to recover. Brent crude has since stabilized around $82 a barrel, down from its peak of over $95 during that period of conflict. This has provided a significant tailwind for the currency.

Domestic Fundamentals Take The Lead

With USD/IDR now trading near 16,550, the sharp recovery trend appears to have matured. Bank Indonesia’s actions, including rate hikes in 2025 that brought the policy rate to its current 6.75%, have also helped anchor the currency. Traders should now consider strategies that capitalize on lower implied volatility, such as selling strangles, as the pair enters a more stable range.

The market’s focus has shifted from global geopolitical risk to domestic fundamentals. Indonesia’s recent Q1 2026 GDP growth of 5.1% provides a solid base for the Rupiah’s current valuation. The previous resistance level around 17,250 now represents a distant psychological ceiling, with traders watching domestic inflation data for the next move.

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China’s real GDP rose to 5.0% year-on-year in 1Q 2026, up from 4.5% in Q4 2025. The rise was linked to strong external demand, while domestic momentum remained uneven.

A GDP Nowcast model projects growth of 4.5% in 2Q 2026. The forecast reflects weakening industrial activity, exports and retail sales.

Domestic Momentum Remains Uneven

Credit growth and fixed asset investment remained subdued. Domestic conditions were also affected by ongoing property sector stress and capacity reduction efforts.

GDP growth is expected to moderate to 4.5% in 2026. Downside risks cited include geopolitical tensions in the Middle East, higher energy prices and supply chain disruptions.

The article states it was produced with the help of an Artificial Intelligence tool and reviewed by an editor.

We see that China’s economy started the year strong with 5.0% real GDP growth in the first quarter, an increase from 4.5% in the fourth quarter of 2025. However, our Nowcast model is already flagging a slowdown to 4.5% for the second quarter. This suggests the positive headline number is masking underlying weakness that will likely become more apparent soon.

Implications For Markets And Positioning

The slowdown is being driven by problems at home, particularly in the property sector and with weak consumer spending. Recent data from the National Bureau of Statistics backs this up, showing new home prices in 70 cities fell 0.7% month-on-month in March, the steepest drop in over a year. This persistent domestic drag means the economy cannot rely on strong exports to carry growth forward.

The boost from external demand also appears to be losing steam. March’s trade data was concerning, with exports unexpectedly contracting by 7.5% year-on-year, reversing the strong performance from earlier in the quarter. Furthermore, the latest Caixin Manufacturing PMI for April just came in at 50.8, which is barely in expansionary territory and points to weakening industrial activity.

Given this outlook, derivative traders should consider positioning for a potential decline in China-related assets in the weeks ahead. This could include buying put options on broad China ETFs like the FXI or shorting Hang Seng Index futures. The growing risk of a slowdown suggests that implied volatility may rise, making long volatility strategies potentially profitable.

We should also anticipate that slowing industrial production will reduce demand for key commodities. This points toward potential weakness in materials like copper and iron ore, creating opportunities for short positions in their respective futures markets. In foreign exchange, the economic pressure on China will likely weigh on its currency, making bearish strategies on the offshore Yuan (CNH) worth evaluating.

We need to remain vigilant, as we saw during the 2015-2016 period when similar growth concerns in China led to a surprise Yuan devaluation and triggered a sharp sell-off in global markets. The risk of sudden policy interventions remains, so maintaining a defensive and flexible posture is crucial. Geopolitical tensions in the Middle East could also suddenly spike energy prices, further complicating the outlook for global manufacturing.

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Gold has come under pressure as oil-led inflation keeps real interest rates high, which raises the cost of holding a non-yielding asset. Demand from institutions, ETFs and central banks has weakened since the start of the war.

Gold often rises with inflation, but tends to struggle when policy tightens and real rates increase, as seen in 1979–82. A negative supply shock may keep policy restrictive and real carry elevated.

Key Market Concerns

Market worries include stagflation and higher rates across the yield curve, which have weighed on metals. Since the conflict began, gold is down about $700/oz (–13%), silver has fallen $21/oz (–22%), and copper is flat despite a deep market deficit.

Some central banks have slowed buying due to war-related liquidity constraints and may wait for lower prices. Technical support is near the 200-day moving average at about $4,258, and oil at $150/b could push gold towards that level.

If support around $4,258 holds and oil prices steady, gold is expected to recover towards $5,200 by year-end. The article was produced using an AI tool and reviewed by an editor.

The pressure on gold continues as stubbornly high oil prices, now trading around $115 a barrel, keep inflation elevated. The latest CPI data for March 2026 showed a hotter-than-expected print of 4.5%, reinforcing the idea that monetary policy will remain restrictive. This environment keeps real interest rates high, increasing the cost of holding non-yielding gold.

Trading And Technical Levels

We are seeing this play out in institutional demand, with gold-backed ETFs recording net outflows of over 50 tonnes in the first quarter of 2026. This situation mirrors what we observed in the 1979-82 period when aggressive policy to fight inflation weighed on the metal. Consequently, central bank buying has also remained subdued since the conflict began back in 2025.

For derivative traders, the key technical level to watch is the 200-day moving average, currently sitting near $4,310. A sustained break below this support could be triggered if oil prices spike toward the $150 mark discussed last year. This suggests that short-term positions or buying protective puts could be a prudent strategy against further downside in the coming weeks.

However, the longer-term uptrend could remain intact if this support level broadly holds. We anticipate a recovery back towards the $5,200 range by the end of the year, similar to the forecast made in 2025. Traders should watch for signs of oil prices stabilizing and inflation data pointing lower as a signal to consider long-term call options or futures positions for later in the year.

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USD/SGD fell as the US dollar weakened, and was last near 1.2745. Momentum and RSI did not show a clear direction, pointing to near-term two-way, range-bound trading.

Resistance was marked at 1.2780–1.2800, including the 100-day moving average and the 38.2% Fibonacci retracement of the 2026 low-to-high move. A higher resistance level was noted at 1.2850, near the 200-day moving average and the 23.6% Fibonacci level.

Key Support And Resistance Levels

Support was placed around 1.2720, linked to the 61.8% Fibonacci level. A lower support area was set near 1.2670, tied to the 76.4% Fibonacci level.

The Singapore dollar was described as a regional defensive currency that may hold up better than higher-beta exchange rates if geopolitical uncertainty continues. Stronger domestic data was cited as support.

Singapore industrial production rose 10.1% year on year in March, up from an upwardly revised 3.3% in February. Electronics output rose 30% year on year, while biomedical and chemicals output fell.

First-quarter 2026 GDP growth was projected for an upward revision from 4.6% to 5.2% year on year, with manufacturing growth seen at 7.9% versus an earlier 5.0% estimate.

Volatility Selling Strategy

With USD/SGD trading in a defined range, we see an opportunity to sell volatility. The pair is likely to remain contained between the strong support near 1.2670 and resistance up at 1.2850 in the coming weeks. Current implied volatility on USD/SGD options is trading near the lows we saw in the summer of 2025, suggesting that strategies like short strangles or iron condors could be well-suited for this environment.

The broad weakness in the US dollar is capping the upside for the pair. Fed funds futures are now pricing in a 75% probability of a US interest rate cut by the Federal Reserve’s June meeting, a significant increase from just a month ago. This lack of upward momentum makes it unlikely that the pair will break through the key 100-day and 200-day moving averages at 1.2780 and 1.2850, respectively.

At the same time, the Singapore dollar’s strength is providing a solid floor. The impressive 10.1% jump in March industrial production supports the view that first-quarter GDP will be revised higher towards 5.2%. With Singapore’s core inflation for March holding firm at 3.1%, the Monetary Authority of Singapore is expected to maintain its strong policy stance, reinforcing support for the currency.

Given the persistent geopolitical uncertainties in the region, the SGD can also be used as a defensive hedge. The currency has historically held its value better than higher-beta currencies like the Thai Baht or the Indonesian Rupiah during periods of risk aversion. Therefore, we can consider pairing a long SGD position against a short position in a more volatile regional currency.

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WTI traded near $98.00 on Tuesday, up 3.21% on the day and at its highest level since mid-April. The move followed rising tensions in the Middle East as talks between the United States and Iran remained stalled.

Reuters reported that US President Donald Trump viewed Tehran’s peace proposal as inadequate, citing missing commitments on Iran’s nuclear programme. The deadlock has extended the closure of the Strait of Hormuz, a route used for about 20% of global oil supply.

Middle East Tensions Lift Oil

The supply disruption supported crude prices and pushed WTI towards $100. Brent also rose, pointing to tighter conditions across energy markets.

UN Secretary-General Antonio Guterres warned that a prolonged closure could lead to a global food crisis. Citibank projected Brent could reach $150 per barrel if the Strait of Hormuz stayed closed through the end of June.

We look back on the events of 2025 as a critical lesson in how quickly geopolitical heat can roil energy markets. The deadlock in US-Iran negotiations and the subsequent closure of the Strait of Hormuz was a stark reminder of supply-side fragility. That situation mechanically drove WTI prices to their highest levels since mid-April of that year, just shy of the $100 psychological barrier.

While the most extreme forecasts of $150 per barrel did not materialize, we did see Brent crude peak at $138 in the fourth quarter of 2025 before a fragile diplomatic resolution reopened the strait. The memory of that volatility spike, where implied volatility on front-month crude options jumped over 60% in a matter of weeks, still influences market psychology today. We learned then how systemic the consequences could be, with the UN warning of a potential global food crisis due to the disruption.

Market Setup In 2026

Now, on April 29, 2026, the market is facing a different kind of pressure, this time from robust demand rather than a major supply disruption. Recent data shows China’s crude imports for the first quarter of 2026 surged by 9.5% year-over-year, far exceeding analyst expectations. This unexpected demand, coupled with OPEC+ holding firm on production discipline, is creating a familiar tightness in the market.

Given the memory of 2025’s rapid price escalation, traders should consider positioning for upside risk in the coming weeks. Buying out-of-the-money call options on WTI, such as the July 2026 $105 or $110 strike prices, offers a defined-risk way to capture a potential sharp move higher. The low volatility we’ve seen in early 2026 makes these options relatively inexpensive compared to the levels seen during the Hormuz crisis.

For those with a more cautious outlook, establishing bull call spreads would be a prudent strategy. By selling a higher-strike call against a purchased call, traders can reduce the initial cost and profit from a moderate rise in oil prices. This approach provides an attractive risk-reward profile if WTI grinds higher toward the $100 level but does not experience the explosive rally of 2025.

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Canada’s Spring Economic Update is due at 16:00 ET on Tuesday. TD Securities expects a CAD 60bn deficit in 2026–27, compared with a CAD 65.4bn shortfall in Budget 2025.

The forecast assumes higher revenues after upward revisions to nominal GDP. It also assumes only modest new spending in the update.

Borrowing projections for 2026–27 are expected to show limited change. T-bills are expected to cover new spending needs.

The Canada Strong Fund is expected to need about CAD 8bn per year in funding through 2028–29. Its CAD 25bn endowment is planned to be spread over three years.

With the Spring Economic Update scheduled for later today, we see this largely as a non-event for the markets. The expected deficit of around $60 billion is a slight improvement and has been well-telegraphed, suggesting it is already priced into current asset values. This points towards low implied volatility, meaning options strategies that bet on a large price swing in Canadian government bond futures or the currency are unlikely to be profitable.

For interest rate traders, the update reinforces the existing outlook for the Bank of Canada. With the latest data from Statistics Canada showing Q1 2026 inflation holding just under 3% and the Bank holding its policy rate steady earlier this month, a fiscally stable budget removes a key variable that could have forced a policy change. We expect this to keep the Canadian yield curve relatively stable in the near term, favouring positions that benefit from range-bound interest rate expectations.

The Canadian dollar may see some minor, temporary strength on the official confirmation of an improved fiscal picture. However, with implied volatility on USD/CAD options already near yearly lows, significant follow-through is not expected. Looking back at how the market digested the similarly structured Budget 2025, the reaction was muted, and we anticipate a similar outcome this time.

The government’s financing plan, relying on T-bills and the new Canada Strong Fund, is crucial for bond traders. By focusing on short-term debt, there is less pressure on the supply of longer-dated bonds, which should help keep long-term yields anchored. This strategy avoids unsettling the bond market and suggests a continued stable environment for government debt.

Silver (XAG/USD) fell by over 2.5% on Tuesday as expectations of higher interest rates for longer weighed on the price. It traded near $73.25, the lowest since 13 April.

Higher Oil prices linked to Middle East supply disruptions have raised inflation risks and pushed up US Treasury yields. Rising yields reduce demand for non-yielding assets such as Silver.

Silver Under Pressure From Rates And Geopolitics

US-Iran talks have made little progress, supporting the US Dollar and adding pressure to XAG/USD. Silver is down over 20% since the US-Iran war began, after rebounding from its March low.

Markets are focused on the Federal Reserve decision on Wednesday, with rates widely expected to stay unchanged. US inflation remains above the Fed’s 2% target, with higher Oil prices adding pressure.

On the daily chart, XAG/USD is below the 50-day and 100-day Simple Moving Averages, which are close together and nearing a bearish crossover. This keeps the near-term bias negative.

The RSI is near 42 and the MACD has moved just below zero. The ADX is around 12, pointing to a weak, range-like trend.

Options Positioning And Key Technical Levels

Resistance sits at $78.50–$79.50, with another level near $90. Support is around $70, then the 200-day SMA near $62.40.

We are seeing a familiar setup for silver, which strongly echoes the conditions we observed back in 2025. The outlook for higher-for-longer interest rates is once again creating significant headwinds, pushing up US Treasury yields and strengthening the dollar. This is reducing the appeal of holding non-yielding precious metals just as it did last year.

The market’s focus remains squarely on the Federal Reserve, especially after the latest March 2026 inflation data came in hotter than anticipated at 3.6%. With WTI crude prices now stubbornly holding above $85 per barrel amid new supply disruptions, expectations for imminent rate cuts have all but vanished. This situation mirrors the sticky inflation concerns we navigated in 2025, which ultimately weighed heavily on silver prices.

For derivative traders, this environment suggests considering downside protection or bearish positions. Buying put options on silver futures or XAG/USD provides a clear way to profit from a potential drop in price while strictly defining your maximum risk. This is particularly relevant as silver tests key technical support levels that, if broken, could lead to a swift move lower.

We also recall that the 2025 analysis pointed to a weak and potentially range-bound trend. If a similar pattern emerges now, selling out-of-the-money call spreads could be an effective strategy to generate income from time decay. This approach benefits if silver stays below a specific resistance level, drifts sideways, or moves modestly lower.

Key levels to watch for setting up these option strategies are the current resistance cluster near $28.50, which aligns with the 50-day moving average. On the downside, the 200-day moving average near $25.20 stands as the next major structural support, making it a logical target for any bearish plays.

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Standard Chartered strategists Christopher Graham and John Davies report that rising labour market slack and weak domestic demand in the UK may reduce the risk of second-round inflation effects. They link this to lower wage bargaining power among workers and weaker pricing power among firms than in the post-COVID period.

Vacancies are at their lowest level in more than 10 years, and payrolls have fallen by 120k over the past 18 months. These conditions point to less pressure for wage rises and fewer opportunities for firms to pass on higher costs.

Uk Labour Market Slack And Inflation Risks

They also say broad fiscal support to offset higher energy prices now looks less likely than it was in 2022–2023. In those years, support measures may have extended the inflation shock while reducing downside economic risks.

They add that the current macroeconomic environment differs from the one seen in 2022 and 2023. They note there is precedent for looking through energy price shocks.

With the UK labour market showing clear signs of slack, we should reconsider the stickiness of inflation. Current data from the Office for National Statistics shows job vacancies have fallen below 900,000 for the first time since 2021, and payrolls have been stagnant. This environment significantly reduces workers’ ability to demand higher wages and limits firms’ power to pass on costs, suggesting inflation will cool faster than expected.

Given this backdrop of fragile domestic demand, rate-sensitive positions should be adjusted. UK retail sales volumes showed a mere 0.2% growth in the last quarter, indicating consumers are cautious and unlikely to fuel a demand-led inflation spike. This weakness supports the view that the Bank of England has room to be more dovish, creating opportunities in short-term interest rate derivatives.

Positioning For Lower Uk Rates

We should not expect a repeat of the massive government support we saw back in 2022 and 2023. Back then, fiscal programs like the Energy Price Guarantee cushioned the economic blow but also prolonged the inflationary shock. With UK public sector net debt now hovering around 98% of GDP, there is little appetite or capacity for similar broad-based fiscal stimulus this time around.

This means we should look to position for lower UK interest rates over the medium term. The SONIA futures curve may be underpricing the potential for rate cuts later this year and into 2027. We see value in receiving fixed on 2-year interest rate swaps, betting that the Bank of England will need to act sooner or more decisively than the market is currently pricing.

This dovish outlook for the Bank of England should also weigh on the pound sterling. When compared to the Federal Reserve, which is grappling with a more resilient US economy, the policy divergence is likely to favour the dollar. We should therefore consider buying GBP/USD put options to hedge against or profit from a potential decline in sterling through the summer.

Lower interest rates would provide a tailwind for UK equities, which have underperformed other major indices. To capitalise on this, we can look at buying call options on the FTSE 100 index. A more accommodative central bank policy could easily spur a rally as borrowing costs for companies fall and investor sentiment improves.

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NZD/USD trades near 0.5890 on Tuesday, down 0.35%, after failing to stay above 0.5900. The pair slips as the US Dollar strengthens on higher demand for safe-haven assets.

The US Dollar is supported by geopolitical uncertainty tied to stalled talks between the United States and Iran. US President Donald Trump is unlikely to accept Iran’s proposal on the Strait of Hormuz, while no progress on the nuclear issue keeps risk appetite muted.

Usd Strength Drivers

The currency also gains from expectations that US interest rates will stay higher for longer. Markets expect the Federal Reserve to pause this week, keeping rates in the 3.50%–3.75% range.

Some US data have also remained firm, including the Conference Board Consumer Confidence Index, which rose to 92.8 in April. This supports US yields and adds support for the US Dollar.

Markets remain cautious ahead of the Federal Open Market Committee decision on Wednesday. Traders are watching for guidance, while still pricing in rate cuts later in the year.

In New Zealand, the NZD gets some support from expectations of tighter policy. The Reserve Bank of New Zealand aims to return inflation to its 2% midpoint and markets price a possible rate rise as early as May after stronger inflation data.

Policy Divergence Outlook

This policy gap helps limit further falls in NZD/USD.

Looking back at the situation in 2025, we saw the US Dollar strengthen from a mix of geopolitical tension and a firm Federal Reserve. Today, the NZD/USD is in a very different position, trading near 0.6150 as market dynamics have shifted significantly. The primary driver is no longer risk aversion but a clear divergence in central bank policy.

The Federal Reserve is now signaling a more dovish stance as the US economy shows signs of slowing. With the latest CPI inflation figure for March 2026 coming in at 2.3%, markets are now pricing in a 70% chance of a rate cut by the June FOMC meeting. This contrasts sharply with the “higher-for-longer” narrative we were analyzing last year.

Meanwhile, the Reserve Bank of New Zealand is facing a different battle, with domestic inflation remaining persistent at 3.8% in the first quarter of 2026. The RBNZ is maintaining its hawkish tone, holding its cash rate at 5.50% and leaving the door open for another hike if needed. This provides a strong fundamental support for the New Zealand Dollar.

This growing policy divergence, where the Fed looks to ease while the RBNZ holds tight, creates a supportive environment for NZD/USD. We saw a similar pattern in 2022 with other currency pairs when central bank policies moved in opposite directions, often leading to sustained trends. This suggests the path of least resistance for the pair is to the upside.

For derivative traders, this outlook makes buying NZD/USD call options an attractive strategy to capture potential gains while limiting downside risk. An alternative for those with a moderately bullish view is to consider selling out-of-the-money put options to collect premium, betting that the RBNZ’s firm stance will provide a floor for the pair.

However, we must remain watchful for any sudden flight to safety, as current tensions in the South China Sea could unexpectedly boost the US Dollar. A surprise rebound in US economic data could also force markets to rethink Fed rate cuts, causing a sharp pullback in the pair. Therefore, managing position size and setting clear risk parameters is essential.

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