US President Donald Trump told Fox News on Sunday that a war with Iran would end soon and that the US would win. The report said his comments came after he cancelled a delegation to Pakistan that could have discussed matters directly with Iran.

Trump said an incident would not stop him from pursuing victory and said Iran could contact the US to talk. He said any talks could be done by phone.

Trump Comments And Market Context

He said some Iranian contacts were reasonable and others were not, and said he hoped Iran would act wisely. He also said NATO did not support the US on Iran and that the US would seize Iran’s nuclear material as part of talks.

Trump said China “could do more” and “could have been far worse”. He also said he would hold talks with Vladimir Putin and Volodymyr Zelenskiy about Ukraine.

At the time of writing, West Texas Intermediate (WTI) crude oil was up 1.25% on the day at $94.30. WTI is a US-sourced crude benchmark traded via the Cushing hub and is often described as light and sweet due to lower gravity and sulphur.

WTI prices are driven mainly by supply and demand, along with geopolitics, sanctions, OPEC decisions, and the US dollar. Weekly inventory reports from API and EIA can move prices, and their results are within 1% of each other 75% of the time.

Oil Volatility And Trading Implications

The President’s comments about an imminent and victorious conflict with Iran are a major signal for increased geopolitical risk. This directly threatens crude oil supply flowing through the Middle East, a fear now reflected in the market. We are seeing WTI crude oil prices already climb towards $95 a barrel as traders price in this new uncertainty.

This situation dramatically increases the likelihood of sharp price swings in the energy market. We should anticipate a significant rise in implied volatility for oil options over the next few weeks. This makes long volatility strategies, such as buying calls on WTI futures or using option straddles, a logical approach to capitalize on potential price spikes.

We should remember the market reaction following the start of the conflict in Ukraine back in 2022. That geopolitical event caused Brent crude to soar above $130 a barrel in weeks, showing how sensitive energy prices are to military action involving a major producer. The current rhetoric suggests a similar, if not faster, price escalation could occur if diplomatic channels fail.

The fundamentals of the oil market are already tight, which will amplify any supply shock. Any conflict could threaten passage through the Strait of Hormuz, which is still the transit point for nearly a fifth of the world’s daily oil supply. With the latest Energy Information Administration (EIA) report showing that U.S. crude inventories unexpectedly fell by 2.5 million barrels last week, there is little buffer to absorb a disruption.

Keep a close watch on the reaction from OPEC+ members, as they hold the world’s only significant spare production capacity. Their decision-making in the coming days will be critical in signaling whether they can or will step in to calm markets. If they signal an inability to quickly ramp up production, it will add more fuel to this bullish trend.

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AUD/USD traded lower near 0.7145 in early Asian trading on Monday. The Australian dollar weakened against the US dollar as Middle East peace talks remained uncertain, while markets awaited the Federal Reserve interest rate decision on Wednesday.

Attempts to restart talks on the Iran war paused after US President Donald Trump cancelled a delegation trip to Pakistan that could have led to direct discussions with Iran, according to Bloomberg. Iranian President Masoud Pezeshkian said Iran would not enter negotiations described as imposed under threats or blockade.

Ceasefire Tensions And Dollar Demand

The ceasefire also faced pressure as Israel and Hezbollah increased attacks despite a US-brokered extension that aimed to stop fighting for three more weeks. Ongoing tension supported demand for the US dollar.

Attention is also on Australia’s March Consumer Price Index report due Wednesday. Headline CPI is forecast to rise 4.7% year on year in March, up from 3.7% in February.

A higher reading could increase expectations of a 25-basis-point rate rise at the Reserve Bank of Australia meeting on 5 May. This could affect the Australian dollar’s performance against the US dollar.

We are seeing a flight to safety as escalating Middle East tensions drive capital into the US Dollar. Recent data from the Commodity Futures Trading Commission (CFTC) shows speculative net shorts on the Aussie have increased by 15% in the last two weeks, suggesting a bearish sentiment is building. Derivative traders should consider buying AUD/USD put options to hedge against a potential sharp drop below the 0.7100 level.

Options Positioning Ahead Of Key Events

The upcoming Australian CPI report on Wednesday is creating significant uncertainty, as a hot number could force the Reserve Bank of Australia’s hand. Implied volatility for one-week AUD/USD options has already climbed to over 12%, a level we have not seen since the market shocks of 2025. This suggests that a long straddle could be a viable strategy to profit from a large price swing, regardless of the direction.

We must also account for the Fed’s decision, as a hawkish surprise could easily overpower any strength from Australian inflation data. Looking back at 2025, we saw the Fed’s aggressive tightening cycle cause the Aussie to fall even when the RBA was hiking. Therefore, a bear put spread could be a cost-effective way to position for downside, limiting risk while targeting a move towards the 0.7000 support level.

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AI growth has pushed up memory and storage shares, as both are needed to run AI systems and handle large data loads. The article names Micron Technology and Seagate Technology as two companies linked to this demand.

Micron shares are up more than 70% year-to-date and trade at 8.4x forward earnings. Its HBM3E can move 1.2TB of data per second, and Micron began mass production of its 24GB 8-High HBM3E in early 2024.

HBM3E uses 30% less power than peers, and all Micron HBM capacity for 2026 is sold out. HBM4 targets over 2.8TB/s and more than a 20% power-efficiency improvement over HBM3E, with mass production starting in April 2026 and prices rising by over 50%.

The article says 90% of data is stored on hard disk drives (HDDs), which are up to 6x cheaper per TB than SSDs. It states Seagate is the world’s largest HDD maker, and its Mozaic platform delivers over 4TB per platter.

It adds that Seagate nearline drives are sold out for 2026. It also notes that hyperscaler capital expenditure forecasts can affect demand and market pricing for both firms.

With Micron’s stock showing such strong momentum, we believe using options is the best way to approach it. The stock is already trading above $185, but its new HBM4 memory is just beginning mass production, suggesting more upside is possible. We are seeing a significant increase in call option volume, especially for contracts expiring in the late summer.

Given the sharp run-up from last year, implied volatility is high, which makes selling premium an attractive strategy. Selling cash-secured puts on any dip allows us to either acquire shares at a lower cost basis or simply keep the premium if the stock remains strong. Looking back at the patterns in 2025, this has been an effective way to enter high-flying semiconductor names.

Seagate is also in a powerful position, as its advanced hard disk drives are sold out for the rest of 2026. Recent industry data shows that data center storage demand has grown by over 40% in the last year alone, which directly benefits Seagate’s bottom line. For Seagate, we are looking at bull call spreads to limit our initial cost while capturing gains if the stock continues its climb.

The biggest risk to this entire trade is a slowdown in spending from the big cloud companies. We are watching the capital expenditure forecasts from the hyperscalers like a hawk, as any sign of weakness could hit these stocks hard. We all remember how the market sold off in late 2025 when one cloud provider merely hinted at moderating growth, so we are keeping some powder dry for protective puts ahead of their earnings calls.

US stock indices are near all-time highs despite conflict in the Middle East. The article describes worries about recession risk, inflation and possible interest-rate rises, and it lists measures used to judge whether US shares are overvalued.

It explains the Buffett indicator, which is total US stock market capitalisation divided by US GDP. It says readings around 100% or below have been typical, 70–80% is classed as favourable, and near or above 200% points to overvaluation and higher risk.

Buffett Indicator Update

The article states the Buffett indicator is now above 220%. It also notes the dot-com period reached about 150%, which is lower than today’s level.

It then covers the Shiller PE ratio, defined as the S&P 500’s average price compared with 10-year average inflation-adjusted earnings, with a 100-year history shown. The article says the ratio is now close to 40, similar to the early-2000s dot-com era, and above the level seen in the “roaring twenties”.

Next, it describes household exposure to equities as equities’ market value divided by US household net worth, saying it is at all-time highs or near them. It also refers to high valuations in areas such as AI, including firms that are not currently profitable.

We see the market’s high valuation reflected in the Buffett Indicator, which shows the total stock market capitalization relative to the country’s GDP. While it has cooled from the highs over 220% we saw in 2025, it currently sits at approximately 185% as of April 2026. This level is still significantly above the historical average and is higher than the peak reached during the dot-com bubble, suggesting the market remains on unstable ground.

The Shiller PE ratio, which compares stock prices to average inflation-adjusted earnings over ten years, supports this cautious view. It is currently hovering around 35, a level that has historically preceded major market downturns, including the crash of 1929 and the tech bust of 2000. This valuation implies that future returns are likely to be much lower than what investors have grown accustomed to.

Implications For Traders

Recent economic data has only added to the tension, making a policy mistake more likely. The latest Consumer Price Index report for March 2026 showed inflation unexpectedly holding firm at 3.1%, challenging the narrative that the Federal Reserve would begin cutting rates this summer. Markets are now pricing in a “higher for longer” interest rate environment, which typically pressures stock valuations.

For traders, this high-tension environment suggests that market volatility is underpriced. The VIX index, a measure of expected volatility, has been relatively low, creating an opportunity to buy VIX call options or futures at a reasonable price. These positions would profit directly from a sudden increase in market fear or a sharp sell-off.

Furthermore, Federal Reserve data from the first quarter of 2026 confirmed that household equity allocations remain near historic highs of over 40% of their net worth. This indicates that many retail investors are fully invested and would be forced to sell in a downturn, potentially causing a cascade. Astute traders should consider buying long-dated put options on broad market indices like the S&P 500 (SPX) or Nasdaq-100 (QQQ) as a form of portfolio insurance or a direct bearish bet.

The hype around certain AI stocks also presents a clear target for more specific strategies. While some AI leaders continue to post strong results, many smaller companies with no profits have seen their valuations soar on pure speculation, similar to what we observed in late 2025. Establishing bearish positions, such as buying puts or creating put spreads on the most overvalued names in this sector, could be a prudent way to capitalize on a correction.

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OCBC analysts see modest upside risk for USD/SGD as the Strait of Hormuz standoff and the US-Iran war reduce risk appetite and lift imported cost pressures. USD/SGD inched up overnight alongside a broader US dollar rebound, and was last around 1.2780.

They report that bearish momentum on the daily chart has faded and the RSI has risen. Near-term resistance is at 1.2790/1.28 (21 and 100 DMAs, plus the 38.2% Fibonacci retracement of the 2026 low-to-high move) and 1.2850 (200 DMA and the 23.6% Fibonacci level).

Support is seen at 1.2750/60 (50 DMA and the 50% Fibonacci level) and 1.2670 (76.4% Fibonacci). They describe the Singapore dollar as a regional defensive currency that may hold up better than higher-beta FX.

OCBC economists expect energy and petrochemical costs to rise for businesses due to the prolonged conflict and Hormuz closure. They also expect Singapore inflation to move towards 2% as these costs pass through supply chains into 2Q26 and possibly beyond.

We see slight upward risk for the USD/SGD pair, which is currently tracking a broader rebound in the US dollar. The persistent crisis in the Strait of Hormuz has pushed Brent crude prices above $115 a barrel, a significant jump from the $90 range we saw just last month. This risk-off environment is driving capital towards the perceived safety of the dollar.

On the daily chart, the bearish momentum for the pair has clearly faded while the Relative Strength Index is rising, suggesting that the recent downtrend may be reversing. We are closely watching resistance around the 1.2790 and 1.2850 levels. A sustained break above these points could indicate further upside for the USD against the Singapore dollar.

The situation in the Middle East is creating direct inflationary pressures for Singapore, which could complicate the outlook for the coming weeks. Economists are now forecasting that inflation for the second quarter could accelerate, with the latest March Consumer Price Index data coming in at 3.5%, surprising the market. This reflects the rising energy and shipping costs now feeding through the economy.

While the Singapore dollar typically acts as a regional defensive currency, it now faces this domestic inflation threat. Looking back at the market reaction to the energy shock in 2022, we saw a similar pattern where the US dollar strengthened globally even against other safe-haven currencies. Derivative traders might consider strategies that protect against a rise in the USD/SGD exchange rate, as the global flight to safety may temporarily outweigh the MAS’s strong policy stance.

Bangko Sentral ng Pilipinas (BSP) raised the target reverse repo rate by 25bp to 4.50%, its first increase since September 2023. A Bloomberg poll showed market expectations were split 50-50 on a rise.

The move aimed to anchor inflation expectations and limit second-round inflation effects. BSP previously tightened in 2018 and 2022 when headline CPI moved above its 2-4% target band.

Headline CPI rose to 4.1% year on year in March 2026. BSP Governor Remolona said a 50bp increase was also discussed and described the change as the start of a new hiking cycle.

BSP said the current stance should still support recovery over the medium term. It lowered its full-year growth forecast to 4.3% from 4.6%, below the government’s 5-6% target range.

BSP pointed to downside risks from Middle East conflict-related supply chain disruption, slower public spending disbursements, and weaker sentiment linked to graft allegations. It said fiscal policy can support growth.

BSP expects broader price pressure through transport costs and fertiliser prices, with spillovers into core CPI categories. It is monitoring inflation expectations to prevent wage-setting from reinforcing supply-driven inflation.

The peso has underperformed regional peers since the Iran war, with the Philippines exposed to Middle East energy prices.

The central bank has signaled that this is the beginning of a new rate hike cycle, with the governor even noting a 50 basis point hike was on the table. This strong forward guidance suggests we should position for higher short-term interest rates in the coming months. We believe paying fixed on 1-year Philippine Peso interest rate swaps is a clear way to express this view.

We’ve seen this playbook before from the central bank, particularly during the aggressive hiking cycle in 2022 when inflation last broke above the target range. Back then, inflation continued to climb for several months, peaking well above 8%, forcing the BSP to hike rates repeatedly. With March 2026 inflation already at 4.1%, this cycle could have a long way to run if price pressures keep building.

Normally, rate hikes would strengthen a currency, but we are not seeing that with the Peso. The currency’s weakness is being driven by external factors, especially the country’s high dependence on energy imports. With Brent crude oil now hovering around $110 a barrel due to the ongoing conflict in the Middle East, the import bill is swelling and weighing heavily on the currency.

Therefore, the path of least resistance for the Peso is likely weaker, despite the central bank’s actions. We should consider buying US Dollar call options against the Peso, targeting a move back towards the historical highs of 59.00 seen in late 2022. The government’s own lowered growth forecast of 4.3% and concerns over fiscal policy will only add to this negative sentiment.

OCBC strategists Sim Moh Siong and Christopher Wong report a technical rebound in USD/TWD, linking it to broader US Dollar strength and risk aversion tied to a US-Iran ceasefire stalemate.

They describe the move as a short-term squeeze, consistent with a falling wedge pattern that can point to a near-term bullish reversal. USD/TWD was last at 31.57.

Key Levels And Technical Setup

They set resistance at 31.60 (100-day moving average) and 31.75 (21- and 50-day moving averages). They set support at 31.40/45, 31.20 (2026 low), then 30.90 (200-day moving average).

They still prefer selling into rallies. They cite foreign inflows into Taiwanese equities, plus a renewed link to the tech cycle, with the TWD-TWSE 30-day rolling correlation above 0.90.

They add that if geopolitical tensions ease and the US Dollar weakens, the Taiwan Dollar may strengthen. They also point to strong AI-led export momentum.

The article was produced with the help of an AI tool and reviewed by an editor.

Positioning And Macro Drivers

The recent uptick in the USD/TWD is a short-term squeeze, pushed by a stronger US dollar and general market caution over the US-Iran situation. Markets are now only pricing a 40% chance of a Federal Reserve rate cut in June, which is keeping the dollar elevated for now. This technical rebound was expected and presents an opportunity.

Despite the current strength, we favor selling into this rally. Key resistance levels to watch for selling opportunities are around the 100-day moving average at 31.60 and further up near 31.75. The fundamental story for a stronger Taiwan Dollar remains intact, so derivative traders can look to sell call options or establish bearish positions at these levels.

The underlying support for the TWD is incredibly strong, as seen by the high correlation between the currency and the Taiwan Stock Exchange. Taiwan’s Financial Supervisory Commission just confirmed net foreign inflows surpassed $15 billion in the first quarter of 2026. This trend highlights how global capital is chasing Taiwan’s tech leadership.

This capital flow is justified by the booming AI-led export cycle. Fresh data from the Ministry of Finance showed Taiwan’s exports of electronic components surged 22% year-over-year in March 2026. This powerful momentum, driven by global AI demand, will eventually pull the TWD stronger.

We saw a similar dynamic throughout the second half of 2025, where the TWD strengthened each time geopolitical fears eased. Therefore, traders should consider using options to position for a stronger TWD over the next few months. This allows them to capitalize once the current risk aversion subsides and the dollar’s broad strength fades.

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Chinese Yuan (CNY) rates steepened over the past week, linked to a ceasefire between the United States and Iran and a stronger macro start to the year. China’s economy grew 5% year on year in Q1, supported by external demand and a rebound in industrial activity.

Purchasing Managers’ Index (PMI) is expected at 50.3 in April, alongside firmer high-frequency indicators. Cement clinker and electric furnace utilisation rose by 2.4ppt and 1.0ppt, and operating rates increased at major steel mills.

The oil shock effects are mainly within energy-related industries so far. Operating rates at petroleum asphalt plants fell, while PTA load rates dropped from 89.4% in March to 75.7% in April month to date.

Onshore bond demand stayed strong. Northbound Bond Connect turnover hit a record CNY1.22tn in March, with average daily volumes at a high of CNY55.6bn.

Offshore flows also continued. EPFR data showed China bond funds took in USD1.6bn in the first week of April.

Overall growth momentum is described as stable but uneven, supporting a measured policy approach. The People’s Bank of China is expected to keep an accommodative bias through liquidity operations, without large rate cuts.

Looking back, we saw the CNY curve steepen around this time in 2025 on the back of a solid 5% Q1 growth figure. This was driven by resilient industrial activity and what was then perceived as a de-escalation in geopolitical tensions. That period provided a clear signal of underlying economic strength.

Today, the picture is more nuanced as China’s Q1 2026 growth came in slightly softer at 4.8%, just below the official target. However, the newly released official manufacturing PMI for April is holding at an expansionary 50.4, suggesting the industrial core remains stable. This points to continued resilience, even if the overall economic pace has moderated from the highs of last year.

The People’s Bank of China is reinforcing expectations of a measured policy stance, just as we saw in 2025. They have held key lending rates steady this month while ensuring ample liquidity in the system through market operations. This action should keep the front end of the interest rate curve anchored and prevent any sharp funding squeezes.

While onshore bond demand remains solid, we are not seeing the record-breaking offshore inflows experienced in March 2025. Data from the first quarter of 2026 shows foreign inflows have been more moderate, with overseas investors holding CNY 3.9 trillion of onshore bonds at the end of March. This suggests global investors are becoming more selective, which could limit downward pressure on long-term yields.

Given the central bank’s clear preference for stability, implied volatility on the yuan is likely to remain compressed near its current low of 3.8% for 3-month options. Selling short-dated USD/CNY straddles or strangles to collect premium could be an attractive strategy in this environment. The tightly managed nature of the currency limits the risk of unexpected large moves.

The combination of a steady PBoC and moderating long-term growth supports a gentle curve steepening. Traders could consider entering payer positions in long-tenor CNY interest rate swaps while receiving in shorter tenors. This position benefits if long-term rates rise relative to short-term rates, reflecting the uneven economic picture.

USD/CHF fell on Friday but ended the week up by over 0.35%, trading at 0.7841. The move came as confidence rose that US-Iran talks could resume over the weekend.

The technical view points to consolidation in the 0.7800-0.7900 range. The Relative Strength Index (RSI) is bearish and trending lower, which signals possible further downside.

Key Technical Levels

The pair reached a nine-day high of 0.7877, but the uptrend then slowed. It closed near the 50-day SMA at 0.7840 and did not break the 100-day SMA resistance at 0.7863.

If the pair weakens, 0.7800 is the first support level. Below that, focus shifts to the April 17 low of 0.7775, then the March 10 daily log level of 0.7748, and February 27’s low of 0.7672.

If the 100-day SMA is reclaimed, resistance is seen at 0.7900. A break above 0.7900 would bring the 200-day SMA at 0.7936 into view, followed by 0.8000.

Looking back to this time last year, in April 2025, we saw the USD/CHF consolidating around the 0.7840 level, with traders watching for a resolution to US-Iran talks. Today, the pair is trading in a much higher range, currently near 0.9150. The fundamental landscape has shifted dramatically from the tight consolidation we were in twelve months ago.

Options Strategy Considerations

The main driver has been the starkly different paths taken by the US Federal Reserve and the Swiss National Bank. US inflation has proven surprisingly sticky, with the latest CPI figures from March 2026 showing a 3.1% year-over-year increase, pushing the Fed to signal a “higher for longer” stance on interest rates. This policy outlook continues to provide significant strength to the US dollar.

In contrast, the Swiss National Bank became one of the first major central banks to cut rates last month, responding to domestic inflation that has fallen to just 1.0%. This policy divergence has created a strong tailwind for the USD/CHF pair throughout early 2026. We believe this interest rate differential will continue to be the dominant theme for weeks to come.

For derivative traders, this suggests that long positions on the pair remain attractive. Buying call options with a strike price around 0.9200 could capture further upside if the trend continues. We see this as a key psychological and technical resistance level that will be tested.

However, we must also consider potential risks, as the pair has rallied significantly this year. Buying protective put options with a strike near 0.9050 could serve as a valuable hedge against any sudden reversal in central bank sentiment or an unexpected de-escalation of global geopolitical tensions. This strategy helps manage the downside while maintaining exposure to further gains.

Given the current environment, we anticipate that implied volatility may rise heading into the next central bank meetings. This could make options strategies that benefit from price movement, such as long straddles, an interesting play for those expecting a decisive break out of the recent range. The key is to watch the central bank commentary very closely.

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USD/IDR hit new all-time highs near 17,300, above an earlier expectation of stabilisation around 17,000. The move was linked mainly to a domestic confidence shock and higher fiscal uncertainty, rather than broad US dollar strength.

Near-term upside risks have widened as sentiment remains fragile. Markets were described as pricing in a higher risk premium, with oil prices still elevated and fiscal and energy conditions unfavourable.

At the same time, valuation measures suggest the rupiah is undervalued against the US dollar, and technical indicators place USD/IDR in overbought territory. Bank Indonesia’s policy reaction may limit further weakening, given its focus on rupiah stability.

Indonesia’s sovereign CDS spreads have not shown a blowout typically associated with a loss of a macro anchor. The article states it was produced with the help of an AI tool and reviewed by an editor.

The move in USD/IDR to all-time highs near 17,300 appears driven more by a domestic confidence shock than broad dollar strength. Markets are clearly nervous about Indonesia’s fiscal direction, creating significant volatility. This presents an environment where sharp, unpredictable moves are likely.

Bank Indonesia’s recent surprise 25 basis point rate hike to 6.75% confirms its commitment to stability, but this has come at a cost. Foreign exchange reserves have fallen by over USD 4 billion in the last reported month, a clear sign of direct market intervention. This tug-of-war between policy action and market fear suggests continued volatility.

This sharp price action has pushed one-month implied volatility on USD/IDR options well above its 12-month average, currently sitting near 9.5%. This indicates that the market is pricing in significant swings in the coming weeks. Traders should therefore consider strategies that can profit from this high volatility or its eventual decline.

We saw a similar, though less severe, episode in mid-2025 when fiscal jitters pushed the pair towards 16,800. Bank Indonesia’s decisive intervention at that time led to a sharp reversal, reminding us that fighting the central bank can be a risky trade. While the current situation feels more serious, that historical precedent suggests a snap-back is possible.

With the spot price looking technically overbought, traders anticipating a BI-induced pullback could consider buying bear put spreads to target a move back towards the 17,000 level. Conversely, those betting that fiscal fears will continue to dominate can use bull call spreads to gain upside exposure while defining their maximum risk. These defined-risk structures are prudent while sentiment remains so fragile.