Fra Danske Bank:
Emilie Herbo, [email protected] , Assistant Analyst
For mobile users we recommend the web-version * including the FI and FX morning comment
*Restricted access – only for professional investors and investors domiciled in and a resident of an EEA member state.
There is no tier-1 data scheduled for release today. Attention shifts to developments in the Middle East and broader market dynamics.
In Sweden, Riksbank governor Erik Thedéen will be holding a speech with the title: “The old world order is cancelled: Investments for competitiveness and security”. Markets will be looking for comments on how the US-Iran war might impact the policy decision from the Riksbank going forward.
This week brings the first key data for April, with Thursday’s flash PMIs for the euro area, US, UK, and Japan in focus. European manufacturing is expected to weaken sharply due to higher energy prices, and price components may hint at whether energy costs are filtering through to other prices. On Tuesday, markets eye Germany’s ZEW survey and UK labour market data, followed by Swedish unemployment and UK inflation figures on Wednesday.
Economic calendar
The Middle East conflict escalated early this morning as the US intercepted an Iranian cargo ship trying to breach its maritime blockade, prompting Iran to vow retaliation. The prospects for a second round of negotiations remain uncertain ahead of the ceasefire’s expiration on Tuesday, with Iran refusing to participate unless the blockade is lifted. Meanwhile, the US Treasury has extended Russian oil sanctions exemptions by one month, casting doubt on Washington’s confidence in a swift resolution.
Oil prices rebounded, with Brent crude trading at USD 95/bbl this morning, as the market digested the turmoil around the Strait of Hormuz. The market is likely to stay volatile this week as US and Iran will try and negotiate a deal. If oil does not start flowing through the strait soon, oil prices are likely to rise further and above USD 100/bbl again.
In China, the central bank kept the 1-year and 5-year Loan Prime Rates unchanged, as widely expected. While we expect monetary easing in the coming months, the LPRs normally change only following changes in the 7-day reverse repo rate, which has not been adjusted since May last year.
The Middle East conflict seesawed over the weekend, starting on Friday with Iran declaring the Strait of Hormuz open for the remainder of the 10-day US-brokered truce between Israel and Lebanon – a key Iranian demand. Brent crude closed at 90USD/bbl on Friday, buoyed by optimism surrounding a lasting peace deal. However, Iran quickly reversed course, re-closing the strait after the US confirmed its shipping blockade would continue. Tensions escalated further as Iran was accused of firing on vessels near the strait.
In the US, Fed Governor Waller suggested the central bank may need to hold rates steady for an extended period, citing the challenge of balancing high inflation alongside a weak labour market. Waller noted that the labour market’s “break-even” point – where hiring sustains the unemployment rate – may now be close to zero, implying fewer new jobs are required to stabilise unemployment. This marks a shift from his earlier concerns about low hiring levels and thus reflects a more hawkish tone. Despite being among the most dovish FOMC participants, Waller’s March vote supported holding rates steady.
Equities: Friday’s price action was dominated by the news that the SoH was open for traffic for as long as the ceasefire lasts. Global equities rose 1.2%, S&P hit new all-time highs amid closing 1.2% higher, Nasdaq was 1.5% higher, Russell 2000 2.1% higher. The rally was naturally broad-based given the geopolitical relief of nature, thus the rally was led by consumer discretionary, industrials and IT, while only Energy and Utilities were lower.
FI and FX: Friday afternoon the news that Iran will open the Strait of Hormuz triggered broad-based risk-on sentiment with oil dropping below 90 USD/bbl, EUR/USD briefly touching 1.1840 and a broad-based decline in yields across tenor and regions. However, over the weekend, the war in the Middle East escalated yet again as Iran quickly reversed course, re-closing the strait after the US confirmed its shipping blockade would continue. As a result, oil prices rebounded overnight as the market digested the turmoil around the Strait of Hormuz. The market is likely to stay volatile this week as US and Iran will try to negotiate a deal. If oil does not start flowing through the strait soon, oil prices are likely to rise further and above USD100/bbl again, putting upward pressure on yields and downward pressure on EUR/USD. In other news, EUR/DKK rose to 7.4735 on Friday, which is above the level, where Danmarks Nationalbank sold EUR/DKK in FX intervention in March 2020. EUR/DKK has traded close to previous intervention level since Wednesday last week. The rise towards the end of last week further raises the odds of FX intervention this month.
See also our in-depth FI and FX morning comment *
FX Forecast Update – USD erases war-fuelled gains as downtrend resumes, 17 April
Reading the Markets Norway – Stagflation risks: look for Red-Green and 2s10s bullish steepeners, 17 April
Reading the Markets EUR – From spring hikes to summer hikes; receive 2Y1Y ESTR swap , 16 April
Reading the Markets Denmark: The energy crisis has not hit consumption , 16 April
China Headlines – Solid exports and end to deflation, rising Chinese role in Iran war diplomacy , 15 April
Report completed: 20 April 2026, 07:00 CEST
Report first disseminated: 20 April 2026, 07:30 CEST
Disclosures/disclaimer
*For a definition of ‘Professional Investors’ under MiFID II (Market in Financial Instruments Directive 2014/65), go to the FAQ. To change your disclaimer settings, go to ‘Research Disclaimer’ at the footer of research.danskebank.com.
Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
