Global markets are closely watching developments in the Middle East, particularly following overnight strikes on Iranian energy infrastructure that have propelled crude oil prices higher. This comes amidst a backdrop of mixed economic data from Japan, where the preliminary Manufacturing PMI for March fell to 51.4, missing expectations for a rebound, while national CPI inflation unexpectedly decreased to 1.3%. Despite these figures, analysts believe the Bank of Japan is still poised for an April rate hike due to the ongoing energy shock’s impact on domestic prices.

The economic calendar today features key indicators, including Flash PMIs from the Eurozone, Germany, and the UK, which could significantly influence market sentiment. A notable miss in these figures, particularly in Germany’s manufacturing sector, could lead to a sell-off in the Euro as traders reassess the European Central Bank’s policy trajectory. Additionally, the U.S. Unit Labor Costs and Productivity data will be scrutinized for inflationary signals, which could strengthen the USD against other currencies.

Traders should be particularly attentive to the API Crude Oil Stockpile Report, as a decrease in inventories could further bolster the current rally in oil prices, reinforcing the geopolitical risk premium in the energy sector.

StoxFeed tracks this as a market signal: Oil prices are responding to OPEC decisions and geopolitical tensions

Source: xtb.com