Markets remain tense in Tuesday’s Asia-Pacific session as crude futures move higher, while equity and fixed income futures stay under pressure, after fresh reports confirm that U.S. President Donald Trump is dissatisfied with Iran’s latest proposal to end the war.
Reuters, quoting a U.S. official, said Trump is not in favor of the plan, in line with earlier reports from the Wall Street Journal and the New York Times. The core issue remains unchanged: Iran’s proposal focuses on reopening the Strait of Hormuz and restoring pre-war conditions, but does not address its nuclear programme. Secretary of State Marco Rubio stressed that stopping Iran from obtaining a nuclear weapon is the main priority, and any agreement that avoids uranium enrichment is unacceptable.
The divide between both sides remains significant. Iran’s plan would restore its pre-war income, including generating billions each year by charging tolls on traffic through Hormuz, while retaining full enrichment capability. For Washington, agreeing to such terms would effectively elevate Tehran into a fourth major global power center. As a result, Trump is resisting the proposal, and the White House is expected to offer a counterproposal soon. For now, there is no agreement, no renewed conflict, and the Strait of Hormuz remains shut.
The Dallas Fed (Federal Reserve Bank of Dallas) April Manufacturing Index dropped to -2.3 from -0.2 previously.
Amid these developments, the U.S. Dollar Index (DXY) ended a two-day losing streak but lacked strong upward momentum, which kept pressure on EURUSD, GBPUSD, AUDUSD, and NZDUSD. Meanwhile, USD JPY remains under pressure due to the BoJ’s hawkish pause, while USDCAD rebounds from a six-week low to post its first daily gain in three sessions. In commodities and digital assets, Bitcoin (BTC) and Ethereum (ETH) both declined for a second straight day. Crude oil extended its previous gains, while gold fell to a three-week low, marking its second consecutive daily drop. Asia-Pacific equities moved lower, while U.S. equities continued to show mixed performance.
The U.S. Dollar’s corrective rebound, along with weaker German GfK Consumer Confidence data and mixed signals from ECB (European Central Bank) officials ahead of Thursday’s policy meeting, puts pressure on EURUSD. At the same time, softer UK retail spending data and a cautious tone before the BoE (Bank of England) decision weigh on GBPUSD.
The BRC (British Retail Consortium) reported that UK shop prices increased 1.0% year-on-year in April, slowing from 1.2% in March due to Easter-related discounts on chocolate, home improvement products, and clothing, while also warning that rising costs from the Middle East are nearing.
USD JPY drops to a five-day low, ignoring the USD’s rebound, as the BoJ (Bank of Japan) maintains a hawkish pause. Before the policy announcement, Finance Minister Satsuki Katayama said authorities are closely monitoring markets and are ready to act against foreign exchange volatility in coordination with the United States, though this gave little support to the Yen.
The BoJ kept its interest rate unchanged at 0.75%, but the decision showed a 6-3 split vote. Three members—Takata, Tamura, and Nakagawa—supported a 25 bps (basis points) rate hike. After the decision, USD JPY fell from around 159.50 to near 159.00. The Yen strengthened as this signals a possible rate hike in June if conditions remain unchanged. The BoJ also raised its inflation forecast for Fiscal Year 2026 to 2.8%, up from 1.9% projected in January.
Japan’s March Unemployment Rate came in at 2.7%, higher than the 2.6% expected and the previous reading, while the Job-To-Applicant Ratio stood at 1.18 versus 1.19 expected and the prior.
Weak market confidence, along with a slightly firmer USD, puts pressure on AUDUSD and NZDUSD. This also outweighs the support from stronger crude oil prices, Canada’s key export, leading USDCAD to rebound from its lowest level since early March. Meanwhile, trade-related updates from China and Canada draw limited market reaction.
China’s Politburo (Political Bureau of the Communist Party of China), in its official statement, pledged to keep supporting domestic demand.
Canada is planning to set up a $25 billion Sovereign Wealth Fund to finance major projects, as reported by the Globe & Mail. The fund will be initially funded through borrowing, which could impact the bond market depending on how it is structured.
WTI (West Texas Intermediate) crude oil extends gains for a second straight day, reaching a two-week high as concerns over tight supply from the Middle East continue to support prices. In contrast, gold posts losses for a second consecutive session, slipping to a three-week low amid a firmer USD and month-end positioning pressure.
Bitcoin (BTC) and Ethereum (ETH) stay weak for a second straight day, pressured by fading trader confidence in digital assets and a firmer USD. In the same direction, Asia-Pacific equities drift lower despite a mixed finish across major Wall Street benchmarks.
The US stock market continues to show uneven performance across sectors, with sharp swings driven by volatility in technology and mixed trends in consumer and industrial stocks. Overall sentiment remains split between optimism and caution. In tech, Google performed strongly while Apple underperformed, reflecting differing investor views on growth potential and earnings stability. The semiconductor sector also remains volatile, highlighting both risk and opportunity.
Among individual stocks, Micron, Nvidia, Intel, Palo Alto Networks, and several healthcare names led gains, while Domino’s Pizza and Dollar Tree were the main laggards in the S&P 500 (Standard & Poor’s 500 Index).
U.S. ADP (Automatic Data Processing) Employment Change, Consumer Confidence, and Richmond Fed (Federal Reserve Bank of Richmond) Manufacturing Index data, along with a speech from ECB (European Central Bank) President Christine Lagarde, shape Tuesday’s economic calendar.
Stronger U.S. data could help the USD (U.S. Dollar) extend its recent rebound, but further gains in the Greenback depend on geopolitical developments, particularly whether U.S. President Donald Trump can help facilitate the reopening of the Strait of Hormuz. Overall, the Dollar may maintain its corrective bounce if supported by solid data and ongoing market uncertainty, which would likely pressure EURUSD, GBPUSD, AUDUSD, and NZDUSD. However, USDJPY is expected to stay under pressure due to the BoJ (Bank of Japan) maintaining a hawkish pause.
Elsewhere, Crude Oil may hold onto modest gains, while Gold and cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), along with broader equities, could face downside pressure. Still, upcoming U.S. corporate earnings may help support the stock market and limit losses.
Investor focus is shifting toward major U.S. technology earnings, which are expected to offer insight into global artificial intelligence investment trends and their impact on semiconductor demand. Key earnings releases on Tuesday include Visa, Coca-Cola, General Motors, T-Mobile, Airbus, and UPS.
May the trading luck be with you!
