The greenback (+0.5% for the “$-Index” at 99.45) regains its status as a preferred safe haven asset in a geopolitically tense context, following Trump’s remarks about peace talks with Iran. This has been surrounded by denials, a story full of inconsistencies, and a deliberate ambiguity over who should sign what. This “message” increasingly appears to be a stock market maneuver benefiting a few insiders, aimed at delaying a Wall Street correction by pushing oil prices below $110. Benjamin Netanyahu dampened hopes of quick peace by stating that “Israel will decide when peace should return… and it won’t be until Israel has achieved all its objectives.”
Furthermore, rumors – echoed by several US and Middle Eastern press outlets – suggest the deployment of 3,000 US soldiers in the region, with the possibility of a ground operation on Iranian soil gaining momentum. Even more worrying, Saudi Arabia was reportedly considering joining the American-Israeli coalition, which seems hardly conceivable.
The US Dollar strengthened significantly against the Australian Dollar (+0.6%), Swiss Franc (+0.5% at 0.7910), Pound (+0.4%), and more modestly against the Yen (+0.35%)… while the Euro showed more resilience, falling by -0.25% to 1.1580 (after reaching 1.1618 at its peak). It is worth noting the Yuan’s decline by -0.2% to 6.8920.
In terms of figures, the preliminary manufacturing PMI calculated by S&P Global for the month of March came in at 52.4 points, up from 51.6 points in February, surpassing analysts’ expectations of a slight decline to 51.5 points. At 52.4 points, it is the highest level in two months. However, the services PMI deteriorated, dropping to 51.1 points, against an expected 52 and 51.7 previously. Finally, the composite index, which combines the two previous indices, fell by -0.5 to 51.4 points, dropping to an 11-month low.
According to Chris Williamson, chief business economist at S&P Global: “The preliminary PMI survey data for March indicates a worrying combination of growth slowdown and rising inflation following the outbreak of war in the Middle East. Businesses report a decrease in demand due to increased uncertainty and the conflict’s impact on the cost of living.
Difficulties in the travel, transport, and tourism sectors are exacerbated by financial market nervousness and accessibility constraints, particularly due to concerns about rising interest rates, soaring energy prices, and supply chain delays.”
