The global economy has avoided a worst-case scenario of escalating hostilities in the Middle East, but the fragile ceasefire poses risks for market participants, particularly regarding maritime traffic through the Strait of Hormuz. As the first-quarter earnings season for 2026 unfolds, investors should focus on Brent/WTI crude, S&P 500 futures, and the AUD/USD currency pair. Crude prices saw a significant drop of $20 per barrel post-ceasefire announcement, yet any resurgence above $100 could reignite inflationary pressures.

Wall Street sentiment has improved, with S&P 500 futures trading just 2.5% below all-time highs as key earnings reports from financial giants like Goldman Sachs and JPMorgan Chase approach. Additionally, TSMC’s results will be crucial for the technology sector’s momentum.

For the Australian dollar, upcoming economic data from China will be pivotal, especially given the RBA’s recent interest rate hike. A continued de-escalation in Middle Eastern tensions could bolster the Chinese economy, providing further support for Australian markets.

Source: xtb.com