The US dollar was a touch firmer in early trade this morning. Despite this, the Dollar Index continues to hover near three-year lows. Fed Chair Jerome Powell's comments last night were downbeat. 

Overall, they were seen as hawkish, as tariff uncertainty has forced the US central bank to sit on its hands rather than rush to cut rates. The CME’s FedWatch Tool suggests that there’s no chance of a rate cut at next month’s meeting. But it puts the probability of a 25-basis point cut in June at close to 60%.

The EUR/USD has pulled back a touch from the three-year highs hit at the end of last week. Traders expect a 25-basis point rate cut from the ECB at today’s meeting. 

Sterling is also retreating from recent highs, while the Japanese yen and Swiss franc have both seen some profit-taking after an extended run-up, and on hopes that markets may start to stabilise thanks to signs that President Trump is tempering some of the worst of his tariff excesses.

Gold has pulled back from the fresh record high hit yesterday, just below $3,360 per ounce. The move likely reflects profit-taking and a temporary pause after the metal’s relentless march upward. 

Gold has rallied 13%, or $360, in the space of a week. So, investors shouldn’t be surprised that prices are pulling back. Gold is also looking very overbought, with its daily MACD hitting levels last seen in April 2011, just before the last peak in prices. That’s not to say it can’t rally further from here. But buyers should be cautious at current levels. 

Silver followed gold lower, maintaining its usual place in the background. Unlike gold, silver is not overbought. However, its dual role as both a precious and industrial metal has meant that investors are unwilling to take on long-side exposure due to questions over future global economic growth.

Oil prices edged higher in early trade. Yesterday, front-month WTI broke above its first level of resistance, which came in around $61.50 on a closing basis. The move came after yesterday’s inventory data came out in line with expectations, while traders continued to factor in OPEC supply concerns and US sanctions in their positioning.

Natural gas was slightly lower again, maintaining a choppy but generally weak tone.

Crypto markets moved higher. Ether briefly broke back above 1,600, mirroring the modest improvement in risk appetite across other asset classes. Bitcoin continues to consolidate in the mid-$80,000s.

Meanwhile, the VIX edged lower, now sitting in the mid-26 range on the May contract. The Volatility Index remains elevated. But its pullback from last week’s highs suggests some temporary easing in investor anxiety as markets head towards the Easter break.

Markets are gearing up for a busy day of releases. The ECB rate decision, US weekly Jobless Claims, the Philly Fed manufacturing index and housing data are on the radar. The numbers will be watched closely, particularly given Powell’s inflation warning and the market’s sensitivity to any signs of policy divergence.

In corporate news, Netflix reports earnings after the bell, with investors keen to see how the streaming giant is navigating subscriber growth, content costs, and competitive pressures.

Markets across Europe and the US will be closed tomorrow for the Good Friday holiday, with US markets reopening on Easter Monday. The shortened week may bring lighter volumes, but not necessarily less volatility — especially with key data and earnings on tap.

Stock index futures suggest a tentative recovery in the US and a steadier Europe after Wednesday’s selloff. However, the long holiday weekend could affect investor psychology, possibly limiting follow-through and prompting lighter positioning.

The ECB’s rate decision will be the focus point today, with the euro pulling back from recent highs and the market expecting a cut. Meanwhile, gold is cooling, the dollar is regaining its footing, and equities are trying to find their legs again after a bruising session for tech.

Volatility remains elevated, and with Powell’s tariff remarks still fresh, the risk of sudden shifts in tone persists. Stay nimble — even with the holiday approaching, the market isn’t offering much in the way of rest.