Daily Market Outlook, March 31, 2026
Daily Market Outlook, March 31, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Equity-index futures rose, while oil prices declined, following a report from the Wall Street Journal indicating that President Trump signalled to his aides a willingness to pause the U.S. military campaign against Iran—even if the strategic Strait of Hormuz remains largely obstructed. Futures linked to the S&P 500 Index advanced 0.8%, while European market futures inched up 0.3%, buoyed by optimism over a potential resolution to the conflict. However, the positive sentiment failed to carry over to Asia, where the MSCI Asia Pacific Index dropped 1%, capping its worst monthly performance since October 2008. Semiconductor stocks bore the brunt of the impact. Amid growing hopes for reduced tensions in the Middle East, West Texas Intermediate crude reversed earlier gains, settling near $103 per barrel after briefly surging to $107. Meanwhile, U.S. Treasury bonds extended their rally, with the 10-year yield slipping two basis points to 4.33%. The U.S. dollar softened against most of its Group-of-10 counterparts. After a month of hostilities, Iran has made a notable strategic move by tightening control over the critical Strait of Hormuz. In March, an average of just six vessels per day have traversed this vital passageway connecting the Persian Gulf to global markets—a sharp decline from the usual traffic of approximately 135 ships daily. Treasuries continued their upward trajectory following the Wall Street Journal report, while Federal Reserve Chair Jerome Powell earlier helped soothe market concerns by downplaying the inflationary risks posed by rising energy costs.
In Europe, attention turns to flash eurozone inflation data, offering early insights into the conflict's impact on consumer prices. The region's reliance on energy imports has driven gas prices up over 70% in recent weeks. EU energy ministers will meet Tuesday to discuss strategies for addressing oil and gas market disruptions caused by the war, according to an internal briefing. Meanwhile, the dollar is set for its strongest monthly rise since July, benefiting as a safe haven amid the conflict. This has pressured the yen, hovering near 160 per dollar, prompting Japanese officials to intervene verbally. Tokyo's March core inflation data revealed a near two-year low, staying below the central bank's target for a second month, as fuel subsidies offset higher raw material costs from a weaker yen.
Unilever has rolled out a company-wide hiring freeze across all levels, set to last for at least three months, according to an internal memo accessed by Reuters. Meanwhile, the company is reportedly deep into negotiations to merge its food division with McCormick, a deal rumoured to include a cash component of approximately $16 billion, as highlighted by the Wall Street Journal. In other news, Saba Capital, led by Boaz Weinstein, has unveiled a liquidity proposal for the Edinburgh Worldwide Investment Trust. The hedge fund asserts that its plan is more advantageous than the trust's own tender offer, which is currently under consideration. The UK motor finance sector is facing a substantial £9.1 billion ($12 billion) bill to compensate motorists affected by unfair vehicle loans. This amount reflects the market regulator's final, albeit slightly reduced, calculation for one of Britain’s most costly financial mis-selling scandals. The marginal reduction in the figure is viewed positively by banks and related lenders, with their shares expected to trade higher in London this morning.
Overnight Headlines
Trump To Aides: Willing To End War Without Reopening Hormuz
Fed Chair Powell: Longer-Term Inflation Expectations Remain In Check
Fed’s Williams Says Policy Well Positioned Amid Supply Shock
Iran Strikes Fully Laden Kuwait Oil Tanker In Dubai Port Area
Asia Steps Up Bond Support As Energy Shock Sends Yields Surging
Foreign Central Banks Sell US Treasuries In Wake Of Iran War
Hedge Funds Chase Yen Strength Plays On Intervention Fears
RBA Says Not Possible To Predict Cash Rate Path With Confidence
China PMIs Return To Growth, Expanding At Sharpest Pace In A Year
Tokyo CPI Cools To Slowest In Two Years As Food Cost Gains Ease
New Zealand Business Sentiment Hits Lowest Since 2024 Recession
US May ‘Reexamine’ NATO’s Merit After Iran War Snub, Rubio Says
UK Food Exports To US Slumped After Trump Imposed Trade Tariffs
Unilever Imposes Hiring Freeze, Citing Middle East War Effects
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EURUSD 31/03: 1.1450 — €630m, 1.1495 — €879m, 1.1500 — €2.9bn, 1.1525 — €938m, 1.1550 — €806m, 1.1600 — €1.7bn, 1.1650 — €1.1bn.
USDJPY 31/03: 157.00 — $531m, 159.00 — $570m.
GBPUSD 31/03: 1.3250 — £614m, 1.3400 — £511m.
AUDUSD 31/03: 0.7950 — $1.4bn, 0.6800 — A$506m, 0.6825 — A$2.1bn, 0.6900 — A$1.0bn.
EURGBP 31/03: 0.8700 — €550m
CFTC Positions as of March 27, 2026:
Equity fund speculators have raised their net short position on the S&P 500 CME by 2,932 contracts, bringing the total to 329,428. Meanwhile, equity fund managers have decreased their net long position in the S&P 500 CME by 11,506 contracts, reducing it to 872,951.
Speculators have also reduced their net short position in CBOT US 5-year Treasury futures by 325,016 contracts, now at 1,448,436. In contrast, they have increased their net short position in CBOT US 10-year Treasury futures by 44,009 contracts, totaling 641,887. A rise in net short positions was also seen in CBOT US 2-year Treasury futures, up by 155,512 contracts to 1,638,179, and in CBOT US UltraBond Treasury futures, which rose by 8,050 contracts to 279,187. Additionally, speculators have cut their net long position in CBOT US Treasury bonds futures by 2,194 contracts, leaving it at 6,570.
The Bitcoin net long position stands at 2,106 contracts. The Swiss franc shows a net short position of -27,097 contracts, while the British pound's net short position is -58,422 contracts. The euro has a net long position of 9,279 contracts, and the Japanese yen reports a net short position of -62,806 contracts.
Technical & Trade Views
SP500
Daily VWAP Bearish
Weekly VWAP Bearish
Above 6800 Target 6920
Below 6500 Target 6150
EURUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 1.1675 Target 1.1730
Below 1.15 Target 1.1350
GBPUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 1.35 Target 1.3650
Below 1.3485 Target 1.3150
USDJPY
Daily VWAP Bearish
Weekly VWAP Bullish
Above 159 Target 161.50
Below 155 Target 152
XAUUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 4300 Target 4750
Below 4250 Target 4000
BTCUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 79.5k Target 81.5k
Below 78k Target 53k
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!