Global Market Analysis and Geopolitical Shifts: An In-Depth Look

Global Market Overview and the Influence of Geopolitical Tensions

Global markets experienced divergent performance this past week, driven by rapidly evolving geopolitical developments and shifts in monetary policy expectations. This report provides a detailed review of key asset movements, analyzes expert opinions, and highlights significant advancements in the technology sector.

Key Asset Movements: Events Shaping Market Dynamics

US Dollar: A Volatile Trajectory Towards the 100 Mark

The US Dollar Index exhibited a "strong initial surge followed by a pullback and stabilization" this week. Early in the week, heightened tensions in the Middle East propelled the index upward, marking a 10-month high. Subsequently, as expectations for conflict de-escalation grew, the index saw a decline. On Thursday, amid deteriorating risk sentiment, the dollar regained strength, oscillating around the 100-point level. Following the Non-Farm Payrolls data release on Friday, the dollar index breached the 100 mark once more.

Gold: Strength Moderated by Underlying Factors

Meanwhile, gold displayed strong performance early in the week, followed by a gradual weakening, yet maintained an overall bullish bias. Gold prices climbed to approach the $4,800 per ounce mark on Wednesday, supported by a weaker dollar and de-escalation hopes. However, on Thursday, with a hardening stance from Trump, surging oil prices, and market concerns about rising oil prices fueling inflation and suppressing interest rate cuts, gold prices partially retraced from their highs. Silver, in contrast, experienced more pronounced volatility, mirroring gold's trend but with greater elasticity.

Oil: Extreme Volatility and Sharp Movements

International oil prices were the most volatile asset this week. Prices saw a brief dip early in the week due to ceasefire hopes. However, on Thursday, following Trump's statement about continuing strikes against Iran in the coming weeks and his failure to specify when the Strait of Hormuz would reopen for transit, oil prices surged again. WTI crude surpassed the $110 per barrel mark, and Brent crude returned to near $105 per barrel.

Ex-USD Currencies: Broad Reversals Post-Initial Gains

Overall, non-US currencies demonstrated a pattern of "initial week gains being broadly reversed by the week's end." The intraday gains of most G10 currencies against the dollar were almost entirely wiped out. Even the Japanese Yen, known for its safe-haven appeal, failed to sustain its strength, with USD/JPY briefly exceeding the 160 mark, prompting the Japanese Ministry of Finance to issue a public warning against speculative fluctuations.

US Equities: A Week of Recovery Amidst Sharp Swings

US stocks experienced a "week of recovery amidst sharp volatility." The Dow Jones Industrial Average concluded the week with a cumulative gain of 2.96%, the Nasdaq Composite rose by 4.44%, and the S&P 500 index gained 3.36%, marking its largest weekly advance since November of the previous year. The markets were closed on Friday due to a holiday.

Financial Institution Views: Divergence on Future Trends

Gold: Unchanged Bullish Thesis

Goldman Sachs believes the bull market logic for gold remains intact and maintains its upward trend projection. Huatai Securities points to the continued robustness of the medium-to-long-term asset reallocation logic for gold. Oversea-Chinese Banking Corporation suggests that the easing of geopolitical risks provides support for gold prices, but the return of rate cut expectations is the key driver.

Dollar and Strait of Hormuz: Competing Factors

ING believes the reopening of the Strait of Hormuz will be a critical factor for dollar weakness. Conversely, both TD Securities and Commonwealth Bank of Australia indicate that the dollar will remain supported under the expectation of escalating geopolitical tensions.

Oil: Projections for Average Price Increases

Société Générale expects the average price of Brent crude in April to be around $125 per barrel. Crédit Agricole CIB shares a similar assessment for the average Brent crude price in April.

Aluminum: Upgraded Expectations Amidst Supply Disruptions

Goldman Sachs has raised its aluminum price forecast due to intensifying supply disruptions. CITIC Securities believes that continued supply disruptions present allocation opportunities in the aluminum sector. Guosen Futures points out that the trajectory of aluminum prices will depend on the assessment of damaged production capacity of related enterprises.

US Interest Rates: Delayed Rate Cuts

Nomura anticipates that inflation risks combined with policy shifts will push back the Federal Reserve's interest rate cut expectations to September. Goldman Sachs, meanwhile, is bearish on the prospect of Fed rate hikes within the year.

Key Events of the Week: Monetary Policy, Regional Tensions, and Tech Developments

1. Powell Signals "No Change": In a speech at Harvard University, Federal Reserve Chair Jerome Powell conveyed a core message on current policy: in the face of short-term inflationary pressures driven by energy shocks, the Fed leans towards maintaining interest rates unchanged and adopting a "look-through" approach to related price volatility. This "dovish" sentiment prompted markets to rapidly revise earlier aggressive rate hike expectations towards rate cut bets. However, stronger-than-expected Non-Farm Payrolls data on Friday caused a cooling of Fed rate cut expectations for 2026. The notion of "looking through" implies viewing energy price increases as a short-term supply shock, not a direct basis for monetary policy adjustments. Powell, however, clearly delineated policy boundaries, emphasizing that if inflation rises and impacts long-term public expectations, the Fed would be compelled to act. There are diverging views within the Fed, with some advocating for rate cuts and others cautioning against underestimating the persistent impact of surging energy prices on inflation.
2. US-Iran Conflict Escalates: The Middle East situation rapidly deteriorated this week amidst ongoing exchanges between the US, Israel, and Iran, with the conflict extending beyond military strikes to energy, shipping, and regional security frameworks. The Strait of Hormuz remains a focal point of contention. Iran has intensified its missile and drone strikes against US bases and Israeli industrial facilities, vowing to expand its targets and accelerate the expulsion of US military presence. Iranian infrastructure has also suffered damage, including iconic bridges and industrial plants. The US and Israel have maintained high-intensity military pressure, with the US reinforcing its military presence in the region. Politically, divisions have also intensified, with US President Trump making conflicting statements about the conflict's progression and future actions. Iran firmly denies any intention for a ceasefire and demands security guarantees.
3. Buffett's Market Outlook: Warren Buffett, in his first interview since stepping down as CEO of Berkshire Hathaway, stated that the company will maintain a wait-and-see approach in the current market environment. He described the current market pullback as "nothing to write home about" and confirmed that Berkshire has over $350 billion in cash, with no immediate investment opportunities identified. He indicated that investments would only be made during significant market downturns. Buffett acknowledged selling Apple shares too early but still realized substantial pre-tax gains. He also praised Apple CEO Tim Cook, considering his operational capabilities even superior to Steve Jobs.
4. Trump's Tariff Policy Tightens: The Trump administration made key adjustments to its tariff system this week, maintaining high tariffs on steel, aluminum, and copper products while implementing tiered taxation on imported pharmaceuticals. This indicates a shift from broad-based tariff increases to structural reshaping of trade policy. The aim is to incentivize production to return to the US, but the industry has voiced significant opposition.
5. OpenAI Secures Record Funding: OpenAI announced the completion of a new funding round totaling $122 billion, valuing the company at $852 billion, placing it among the world's most valuable private enterprises. This record-breaking funding is seen as paving the way for its IPO within the year. The company is focusing on developing a "unified AI super-app" and is strategically consolidating its business operations.
6. SpaceX Prepares for IPO: SpaceX has reportedly confidentially filed for an IPO with the US Securities and Exchange Commission, planning to raise $75 billion and targeting a valuation of $1.75 trillion. If successful, it would surpass Saudi Aramco's 2019 record and become the largest IPO in history. The offering is slated for June 2026.
7. Anthropic Source Code Leak: AI startup Anthropic confirmed a partial leak of its proprietary source code for its programming tool, Claude Code. The company attributed the incident to human error in the release packaging process rather than an external security breach, stating that customer data was not compromised.
8. Tesla's Q1 Deliveries Miss Expectations; EV Market Trends: Tesla reported Q1 vehicle deliveries of 358,023 units, falling short of analyst expectations and marking a year-on-year increase of 6% but a sequential decline of 13%. Full-year deliveries are projected to contract for the second consecutive year. Meanwhile, Chinese EV manufacturers announced robust March delivery figures, indicating a market recovery.