Diminished guidance

Daily update

US President Trump posted on social media that the US will “guide” commercial shipping through the Strait of Hormuz. Media reports suggest this will not involve naval escorts. Iran’s parliamentary security committee head Aziz called the posts delusional. The oil market reaction gives weight to the Iranian view. US gasoline prices are approaching USD 4.5 per US gallon, which is an incentive for the administration to use calming rhetoric to guide markets. This has less impact as the point of physical shortages moves closer.
There is a pontification of central bank speakers on the agenda—no fewer than six from the European Central Bank (ECB). There is genuine uncertainty about ECB policy, so signals of what the central bankers are looking at would be helpful. Federal Reserve president Williams is also speaking. As a competent economist, William’s words carry weight.
The yen has remained volatile in the wake of last week’s defence of the currency by Japan’s Ministry of Finance. Golden Week holidays are reducing market liquidity, but the Japanese government seems keen to prevent any further currency-induced inflation impulse.
There are some European business sentiment polls, useful for generating headlines but little else. US March factory and durable goods data is due—AI enthusiasm, and inflation pressures will flatter the headlines.