Elite Research | 13.04.2025
Short-Term Macro Thesis for the Australian Dollar (1–4 weeks)
1. Tariff Relief Provides a Temporary Buffer
The 90-day pause on U.S. reciprocal tariffs for non-retaliating countries gives Australia breathing space. With Australian exports largely spared from immediate tariff hikes, external demand — particularly from key trading partners excluding China — remains intact in the near term. This delay in trade friction escalation supports Australia's current account dynamics and keeps trade-related downside risks at bay for now.
2. Inflation Pressures Are Rising
Domestic inflation expectations have increased, with consumer surveys pointing toward a renewed pickup. This rise limits the Reserve Bank of Australia's policy flexibility, making near-term rate cuts unlikely. Despite global disinflationary forces from falling oil and freight prices, imported inflation through a weaker exchange rate or supply chain frictions remains a concern. Policymakers are likely to stay sidelined, preferring to monitor tariff impacts and wage pass-through effects.
3. Resilient Fiscal and External Balance
Australia's fiscal position remains one of the strongest in the developed world, providing a backstop to economic activity through potential targeted stimulus if needed. The trade surplus remains supported by stable export volumes in iron ore and LNG, while Australia continues to attract portfolio inflows into sovereign and semi-government debt — underpinned by a credible central bank and low political risk.
4. China Spillovers Not Immediate, But Looming
Although China’s 125% retaliatory tariffs on the U.S. could weigh on Chinese growth in coming quarters, the short-term knock-on effects to Australia are minimal. Front-loaded shipments and still-robust Chinese infrastructure spending support Australian export volumes for now. The market will reassess these dynamics as Q2 Chinese data emerges, but for now, they remain a background risk, not an immediate drag.
Short-Term Summary (1–4 weeks)
AUD is underpinned in the near term by tariff-related relief, solid fiscal fundamentals, and commodity export stability. Rising inflation expectations may prevent the RBA from easing, adding a floor under rates. Near-term risks are tilted modestly to the upside, but with volatility elevated and China downside risk lingering, the upside is likely capped unless there’s a material improvement in global macro conditions.
Short-Term Macro Thesis for the Canadian Dollar (1–4 Weeks)
1. U.S. Tariff Pause Offers Limited Relief
The 90-day delay in higher U.S. tariffs offers only marginal support to Canada. While it de-escalates immediate risks to trade volumes, key Canadian exports such as autos, aluminum, and steel continue to face existing tariffs. The structural pivot in U.S. trade policy still points toward a more protectionist framework, which limits near-term upside for Canadian trade exposure.
2. Growth Momentum Is Fading
Recent economic data suggests that Canada’s domestic growth is losing steam. Housing market activity is softening, retail sales are slowing, and business investment remains tepid. Elevated interest rates are weighing on consumption and mortgage affordability, particularly as more households roll into higher-rate renewals. Without fiscal stimulus or a material lift in external demand, domestic drivers are likely to underperform.
3. Inflation Remains Sticky in Core Measures
Headline CPI has eased due to lower fuel prices, but core inflation—particularly in services and shelter—remains persistent. The Bank of Canada is likely to remain on hold in the short term as it assesses incoming data. While financial markets are pricing in rate cuts over the medium term, policymakers appear reluctant to move too early in the face of elevated core inflation and wage rigidity.
4. Terms of Trade Under Pressure
Global commodity prices have stabilized but remain well off previous highs. Softness in energy and metals, coupled with concerns over Chinese demand, is weighing on Canada’s terms of trade. While WTI oil has rebounded slightly, it remains below levels needed to significantly improve the external balance. This limits CAD support from the commodity channel in the near term.
5. Yield Differentials and Capital Flows
Canada’s yield advantage relative to the U.S. is limited, reducing the attractiveness of CAD for yield-seeking capital. Foreign demand for Canadian government and provincial bonds remains moderate, but is insufficient to offset the deterioration in the trade balance. This weakens CAD’s position in the broader G10 funding and allocation landscape.
Short-Term Summary (1–4 Weeks)
The Canadian dollar remains vulnerable over the short term. While the pause in U.S. tariff escalation reduces immediate tail risks, domestic growth is softening, core inflation remains elevated, and commodity support is fading. With limited room for policy manoeuvre and a neutral-to-soft capital flow backdrop, the CAD is more likely to drift lower than stage a meaningful recovery in the coming weeks.
Short-Term Macro Thesis for the Swiss Franc (1–4 weeks)
1. Surge in Safe-Haven Inflows
The Swiss franc remains a key beneficiary of global risk aversion. With equity markets volatile, Treasuries under pressure, and the U.S. dollar’s safe-haven status being questioned, CHF is attracting capital as a defensive asset. Switzerland’s low sovereign risk, stable political system, and consistent current account surplus enhance the currency’s appeal in risk-off environments.
2. Passive Posture from the SNB
Despite the recent appreciation in CHF, the Swiss National Bank has not intervened decisively in the FX market. With inflation contained and no signs of currency-induced disinflation, the SNB appears comfortable allowing moderate franc strength. The market sees the SNB’s current stance as a green light for continued CHF resilience unless EUR/CHF drops sharply below key thresholds.
3. Resilient External Balances
Switzerland maintains one of the largest current account surpluses in the G10, driven by consistent strength in high-value exports and financial services. This external position provides a steady flow of natural demand for CHF, limiting downside risk and supporting the currency during episodes of global uncertainty.
4. Low Inflation, No Policy Urgency
Swiss inflation remains low and stable, well below the levels seen across the Eurozone or North America. With price pressures subdued and domestic economic activity relatively balanced, there is no urgency for policy shifts. This gives the SNB room to remain on hold and allows CHF to trade more freely in line with global macro conditions.
5. Diversification from USD Risk
As concerns grow over U.S. fiscal sustainability and protectionist policies, global investors are increasingly looking for alternatives to the dollar as a safe asset. CHF is benefiting from this rotation, especially as it exhibits low correlation with equity markets and minimal vulnerability to global supply chains.
Short-Term Summary (1–4 weeks)
The Swiss franc is well-positioned to remain firm in the short term, supported by safe-haven demand, a solid external surplus, and a non-interventionist central bank. With volatility high and macro risk unresolved, CHF offers defensive utility without immediate inflation or policy risk. Unless the global growth or inflation outlook improves materially, CHF strength is likely to persist.
Short-Term Macro Thesis for the Euro (1–4 weeks)
1. Beneficiary of Dollar Rotation
The euro has been a key recipient of capital rotating out of U.S. assets. The shift away from the U.S. dollar, driven by concerns over trade policy, fiscal sustainability, and loss of safe-haven appeal, has elevated EUR/USD despite widening rate differentials. The euro's role as a deep, liquid reserve currency makes it a primary alternative when confidence in U.S. assets wanes.
2. Delayed Tariff Escalation Buys Time
The 90-day pause in U.S. tariff retaliation has temporarily shielded the Eurozone from immediate trade disruption. However, the threat of future tariffs—particularly on autos and services—remains on the table. In the short term, this pause reduces risk to German industry and provides breathing space for policymakers and corporates, keeping eurozone export conditions relatively stable.
3. Stronger-than-Expected Data
Recent upside surprises in Eurozone economic activity, particularly in industrial production and services output, have helped reinforce the narrative of resilience. While structural headwinds remain, front-loaded activity ahead of potential tariffs and mild weather effects have contributed to stronger short-term data prints, reducing immediate recession fears.
4. Support from Fiscal Policy Shift
The euro continues to benefit from the broader shift in EU fiscal stance. The move toward more expansionary fiscal policy—especially in Germany, where discretionary spending has increased—adds cyclical support to growth and reduces the eurozone’s reliance on monetary policy alone. This strengthens the medium-term case for EUR and offers support in the current window of risk repricing.
5. ECB in Wait-and-See Mode
The European Central Bank has adopted a neutral stance as inflation moderates and downside risks to growth remain. While markets are still pricing in cuts later this year, the ECB is unlikely to act imminently, particularly with external demand stabilizing and core inflation not yet aligned with the 2% target. This policy pause supports rate differentials stabilizing and gives EUR room to consolidate gains.
Short-Term Summary (1–4 weeks)
The euro is well-supported in the near term by safe-haven rotation out of the dollar, a pause in trade escalation, better-than-expected domestic data, and a fiscal tailwind. While longer-term structural issues persist, near-term drivers point toward continued EUR strength or consolidation at elevated levels, barring a surprise re-escalation in tariffs or a hawkish shift from the Fed.
Short-Term Macro Thesis for the British Pound (1–4 weeks)
1. Resilient Activity Data Surprises to the Upside
February GDP data delivered a significant upside surprise, with 0.5% monthly growth driven by strong manufacturing output and stable services activity. While some of this may reflect front-loaded demand ahead of tariff risk, the print challenges overly pessimistic assumptions about UK growth and provides near-term support to the pound through improved macro credibility.
2. Limited Exposure to Direct Tariff Impacts
The UK economy is relatively insulated from direct exposure to U.S. trade tensions, given its smaller manufacturing base and limited bilateral goods trade with the U.S. This buffers GBP from the immediate fallout of global trade friction. However, indirect exposure through global demand and financial market volatility remains a constraint on broader capital flows.
3. Wage Growth Still Supports Real Income Gains
Nominal wage growth remains above 6% year-on-year, outpacing inflation, which has cooled to the 3–4% range. This dynamic supports household real incomes and consumption in the near term, even as the labour market shows signs of cooling. A recent rise in jobseeker numbers may be an early warning, but no sharp deterioration has yet materialized.
4. Fiscal Constraints Limit Policy Flexibility
Despite better-than-expected data, the UK remains near its fiscal ceiling, limiting the government's ability to respond to further shocks with meaningful stimulus. Compared to the Eurozone, where fiscal space is expanding, the UK is relatively constrained, which reduces the ability to support GBP via policy-induced growth momentum if conditions deteriorate.
5. BoE Cautious but Not Easing
The Bank of England is expected to remain cautious in the near term. With inflation still above target and wage pressures lingering, the BoE is unlikely to deliver rate cuts imminently. The market is pricing in cuts later in the year, but the current policy stance supports GBP through near-term yield stability, particularly in an environment where the Fed and ECB are also on hold.
Short-Term Summary (1–4 weeks)
The pound is underpinned in the short term by strong domestic data, resilient wage growth, and a central bank unlikely to move quickly on rates. While fiscal constraints and global volatility remain headwinds, the limited exposure to direct tariff shocks and recent economic upside surprise provide a stable near-term foundation for GBP. Modest appreciation or consolidation is likely unless risk conditions worsen materially.
Short-Term Macro Thesis for the Japanese Yen (1–4 weeks)
1. Repricing of U.S. Assets Supports JPY
The sharp rotation out of U.S. equities and Treasuries has reignited demand for the yen as a traditional safe-haven currency. The yen is particularly sensitive to U.S. yield dynamics, and the combination of a soft CPI print, elevated equity volatility, and fiscal uncertainty in the U.S. has driven flows back into JPY. This positions the currency well during periods of global risk-off behavior.
2. BOJ Maintaining Policy Pause
The Bank of Japan has paused its rate-hike cycle for now, but is unlikely to ease despite rising external risks. Inflation in Japan is set to accelerate again in March data due to service costs and the pass-through of earlier food price gains. The BoJ is monitoring the effects of U.S. tariffs but sees no reason to change course imminently, particularly if the yen stabilizes or strengthens.
3. Front-Loading in Exports Offers Temporary Support
Export data for Q1 is expected to remain strong as Japanese firms front-loaded shipments to the U.S. ahead of tariff risks. This provides a temporary cushion for trade balances and may keep JPY supported through the end of April. However, this effect is expected to fade in Q2 as demand softens and trade conditions adjust to the new policy environment.
4. Political and Fiscal Sensitivities Reinforce Bid
Domestic political figures are calling for targeted consumption tax cuts in response to the rising cost of living, which has stirred debate over the future fiscal stance. While this has not translated into immediate policy action, it reinforces Japan’s defensive profile and may attract further flows into JPY assets, particularly if global conditions deteriorate.
5. Positioning and Valuation
The yen remains fundamentally undervalued on a real effective exchange rate basis, even after recent gains. Positioning among hedge funds and asset managers has been light, which leaves room for further JPY appreciation as volatility picks up and investors rebuild defensive FX allocations. If global yields fall or risk assets continue to sell off, the yen stands to benefit.
Short-Term Summary (1–4 weeks)
JPY is well-positioned to outperform in the short term due to safe-haven demand, a pause in U.S. dollar strength, and BoJ stability. Export front-loading and valuation support add to the bullish backdrop. Unless global risk conditions improve sharply or U.S. yields rebound, the path of least resistance for JPY remains upward.
Short-Term Macro Thesis for the New Zealand Dollar (1–4 weeks)
1. Relief Rally Driven by U.S. Tariff Pause
The 90-day delay in U.S. tariff escalation has helped stabilize high-beta currencies like NZD. Although New Zealand was not directly targeted by new tariffs, the global relief rally in risk assets has supported the currency in the near term. This pause reduces the probability of an abrupt global demand shock, which is critical for an export-reliant economy like New Zealand.
2. Soft Domestic Growth Limits Upside
Domestically, the New Zealand economy is showing signs of strain. Growth momentum remains weak, particularly in housing and construction. Business confidence is subdued, and credit demand is soft. While this has not triggered immediate RBNZ action, it does cap the upside for the currency as the domestic outlook remains fragile compared to other G10 peers.
3. Inflation Expectations Are Rebounding
Recent survey data shows a rebound in consumer inflation expectations. While headline CPI has cooled, underlying inflation pressures persist, particularly in services. The Reserve Bank of New Zealand remains cautious, and markets are pushing out expectations for rate cuts. This repricing in the short-term rates curve offers some support to NZD by limiting divergence with global peers.
4. Export Prices and Terms of Trade Under Pressure
Dairy prices—the largest component of New Zealand’s export basket—have been under downward pressure. Although the recent improvement in risk sentiment helps, softer demand from China and global food market adjustments remain a concern. The terms of trade have edged lower, and unless commodity prices rebound meaningfully, the NZD may struggle to extend gains.
5. Capital Flows Remain Modest
New Zealand continues to experience modest capital inflows, primarily into government bonds. However, its yield advantage has narrowed relative to other G10 currencies, particularly with the RBNZ in wait-and-see mode. The currency is therefore more exposed to shifts in global risk appetite and equity market performance than to domestic yield differentials.
Short-Term Summary (1–4 weeks)
The New Zealand dollar is supported in the near term by improved global risk sentiment and delayed tariff escalation, but remains constrained by weak domestic growth and softening export prices. Inflation pressures have delayed rate cut expectations, offering some support. Unless China data improves or commodity prices rebound, NZD is likely to remain range-bound or only moderately firmer in the short term.
Short-Term Macro Thesis for the U.S. Dollar (1–4 weeks)
1. Erosion of Safe-Haven Status
The dollar is losing its traditional safe-haven appeal amid elevated U.S. fiscal concerns and inconsistent policy signals. Despite softer-than-expected CPI data, risk assets and Treasuries sold off, indicating that markets are becoming more sensitive to structural risks in the U.S., including the rising deficit, political volatility, and unpredictable tariff policy. As a result, traditional safe-haven flows are rotating into alternatives like CHF, JPY, and EUR.
2. Cooling Inflation Provides Breathing Room
The March CPI report surprised to the downside, with core inflation rising just 0.1% month-on-month. This has eased immediate concerns of a re-acceleration in inflation and has allowed the Fed to maintain a cautious, data-dependent stance. While not an outright catalyst for rate cuts, the data reduces urgency for further tightening and contributes to the decline in U.S. real yields.
3. Fed Communication Watched Closely
With multiple Fed speakers scheduled in the coming days, markets are closely watching for any shifts in tone following the inflation data and equity market volatility. Rate expectations for 2025 have been scaled back, with the market now pricing in fewer cuts than two weeks ago. Unless the Fed signals readiness to step in to stabilize markets, the dollar may remain vulnerable to further repositioning.
4. Fiscal Uncertainty Adds Risk Premium
The recent passage of a House budget resolution including tax cut extensions has raised fresh concerns about the sustainability of U.S. fiscal policy. Wider swap spreads and soft Treasury auctions reflect increased risk premia, with investors demanding more compensation to hold U.S. assets. This dynamic is beginning to weigh on the dollar, particularly against low-beta currencies and safe havens.
5. Positioning Remains Crowded
The dollar’s rally over the past year left speculative positioning stretched long across several pairs. As risk sentiment deteriorates and U.S. assets lose some of their relative appeal, there is scope for further unwinding. With DXY testing key support and rate differentials narrowing, short-term positioning dynamics may accelerate the move lower unless sentiment stabilizes.
Short-Term Summary (1–4 weeks)
The U.S. dollar is under pressure in the near term as soft inflation data, fiscal concerns, and a loss of safe-haven appeal weigh on demand. While Fed caution limits the downside somewhat, relative yield support is weakening and positioning remains vulnerable. Unless there is a strong rebound in U.S. growth data or a shift in Fed communication, the dollar is likely to remain on the defensive across G10.
Short-Term Macro Thesis for Emerging and Exotic Markets (1–4 weeks)
1. Global Risk Stabilization Offers Temporary Relief
The 90-day pause on U.S. reciprocal tariffs has alleviated immediate pressure on high-beta and emerging market currencies. This has helped trigger a broad-based relief rally in EM FX, particularly among those with high carry and relatively sound fiscal positions. However, this reprieve is likely temporary, as underlying risks from trade fragmentation, commodity volatility, and global growth deceleration remain unresolved.
2. Divergence Driven by Exposure to U.S. and China
EM currencies with deep trade or financial linkages to the U.S. or China are diverging. LatAm FX, such as BRL and MXN, has found support due to high carry and more insulated domestic demand. In contrast, Asia EM currencies like KRW and TWD remain vulnerable due to their integration with China’s export sector and supply chains, especially with China still facing a 125% U.S. tariff rate and retaliatory pressures.
3. Central Bank Reactions Differ by Region
Rate dynamics remain mixed across EM. Some central banks, like the CBRT and BCB, remain focused on FX stability and inflation containment, while others, like the BoK and SARB, face growing pressure to ease as growth slows. Tactical shifts in monetary policy—particularly in countries facing capital outflows or inflation pass-through—are likely to create short-term volatility in their respective FX markets.
4. Terms of Trade Weakness in Commodity Exporters
Exporters of industrial commodities and energy (e.g., CLP, COP, RUB) remain under pressure due to recent softness in global demand, especially from China. Even though the U.S. tariff pause helped sentiment, underlying fundamentals for many EM commodity exporters are deteriorating. FX gains may be capped unless there is a renewed pickup in global infrastructure investment or fiscal support out of Beijing.
5. Local Political Risk Still Prominent
In addition to global macro drivers, domestic political uncertainty is weighing on several EM currencies. TRY remains exposed to policy credibility issues despite state bank support; ZAR continues to face fiscal fragility and election-related volatility; and ARS and EGP are under constant pressure from structural imbalances. FX rallies in these markets are likely to be short-lived and flow-driven.
Short-Term Summary (1–4 weeks)
Emerging and exotic market currencies have benefitted from a temporary reprieve in global risk aversion, but the bounce is fragile. High carry and strong fiscal anchors support some LatAm and CEE currencies tactically, while Asia FX remains vulnerable to China spillovers. Domestic politics, commodity terms of trade, and diverging central bank reactions will continue to drive dispersion across the EM FX complex. Expect selective opportunities, but elevated volatility and asymmetric downside risk remain dominant themes.
Short-Term Macro Thesis for Oil (1–4 weeks)
1. Demand Outlook Stabilizing but Still Fragile
The 90-day pause on U.S. reciprocal tariffs has eased fears of a near-term collapse in global trade, helping crude markets find a short-term floor. However, demand expectations remain fragile, particularly with China still under aggressive U.S. tariff pressure. Forward indicators from Asia and Europe are mixed, and any deterioration in industrial activity or global transportation volumes could quickly renew downside momentum.
2. Supply Discipline from OPEC+ Holding
OPEC+ continues to demonstrate discipline, with output cuts largely holding and members signaling a readiness to extend current production caps if needed. This has helped anchor prices in the $70–80 range for Brent despite macro volatility. Saudi Arabia and the UAE have reiterated their preference for price stability over market share, supporting near-term supply-side firmness.
3. U.S. Shale Activity Slowing
Higher funding costs and weaker forward hedging levels are beginning to weigh on U.S. shale production. Rig counts have plateaued, and breakeven costs remain elevated for many producers outside the Permian. This limits the likelihood of a rapid supply surge from North America, removing a key bearish pressure point that weighed on crude throughout 2023.
4. Geopolitical Risk Premiums Remain Modest
While tensions persist in the Middle East and the Black Sea, the market has not priced in significant geopolitical risk premia. Maritime flows remain mostly uninterrupted, and inventory levels in key importers remain adequate. However, any escalation—whether from conflict, sanctions, or cyber disruptions—could trigger an outsized price reaction due to currently thin liquidity and low spare capacity buffers.
5. Inventories and Time Spreads Supportive
Commercial crude inventories in OECD economies remain within historical norms but have tightened marginally in recent weeks. Time spreads in both WTI and Brent have shifted toward mild backwardation, reflecting a modest rebalancing of physical markets. This supports front-month pricing in the short term, though the structure is not yet strong enough to indicate a bullish breakout.
Short-Term Summary (1–4 weeks)
Crude oil is range-bound in the near term, supported by OPEC+ discipline, easing macro fears, and a pause in U.S. tariff escalation. However, fragile demand from China, soft refining margins, and uncertain global industrial momentum cap the upside. Barring a geopolitical shock or surprise inventory draw, oil is likely to trade sideways with a slight bullish bias, supported more by supply restraint than demand strength.
Short-Term Macro Thesis for Natural Gas (1–4 weeks)
1. Mild Weather Pressures Near-Term Demand
Seasonal temperatures in both North America and Europe have remained above average, sharply reducing heating-related demand. As a result, natural gas consumption has been subdued across residential and commercial sectors. This has weighed on front-month contracts, particularly in the U.S. Henry Hub and Dutch TTF benchmarks, both of which have seen downward pressure despite broader energy market stability.
2. Inventories Remain Comfortable
Storage levels in the U.S. and Europe are well above 5-year averages for this point in the year. Strong replenishment in 2023, combined with weak winter drawdowns, has left inventories in a healthy position heading into Q2. With no immediate threat to supply or demand surges, gas markets remain structurally loose, capping upside near term.
3. LNG Flows Stable, but Global Margins Tight
Global LNG flows remain stable, with the U.S., Qatar, and Australia continuing to meet baseline contractual obligations. However, demand from key importers—especially in Asia—has shown signs of softening due to high inventory and slower industrial output. Spot LNG prices in Asia are under pressure, although strong long-term demand from South Korea and India has helped prevent a deeper decline.
4. Industrial Demand Yet to Rebound
Gas-intensive industries in Europe and parts of Asia are operating below pre-crisis capacity, with limited signs of a near-term rebound. Elevated electricity costs and weak external demand continue to depress industrial gas use. This keeps a ceiling on spot prices despite geopolitical stability and reduced Russian pipeline flows into the EU.
5. Price Action Still Volatile on Supply Risk Sensitivity
Despite a broadly oversupplied market, natural gas remains prone to sharp short-term volatility. Any disruption to LNG terminals, shipping lanes (e.g., Panama or Suez Canal), or cold weather anomalies can trigger outsized price moves. Traders remain alert to tail risks, which helps maintain a volatility premium even in a fundamentally soft environment.
Short-Term Summary (1–4 weeks)
Natural gas remains under pressure in the near term due to mild weather, high inventories, and subdued industrial demand. While global LNG flows are stable, oversupply and weak spot market conditions cap upside potential. Volatility may persist due to sensitivity to weather and infrastructure events, but absent a disruptive catalyst, the path of least resistance remains sideways to lower.
Short-Term Macro Thesis for Gold (1–4 weeks)
1. Declining Real Yields Provide Tailwind
The recent downside surprise in U.S. CPI has lowered real yields across the Treasury curve, particularly at the front end. As inflation expectations remain steady and nominal yields decline, gold benefits from a more favorable opportunity cost profile. The drop in real yields is a key driver behind gold’s firm support near all-time highs.
2. Safe-Haven Demand Remains Strong
Persistent macro volatility—driven by trade tensions, U.S. fiscal concerns, and equity market instability—continues to drive defensive inflows into gold. The weakening safe-haven status of the U.S. dollar is amplifying gold’s role as an alternative store of value, particularly as confidence in sovereign debt begins to fray.
3. Central Bank Buying Still a Key Support
Emerging market central banks remain consistent net buyers of gold, supporting demand on dips. This trend has continued into 2025, reflecting ongoing efforts to diversify reserves away from dollar-denominated assets. Central bank demand is providing structural support and limiting downside even in sessions with rising nominal yields or stronger dollar bounces.
4. ETF Flows Stabilizing After Early-Year Outflows
Gold ETF flows have stabilized in April after a period of net redemptions in Q1. Renewed interest from institutional investors is being driven by volatility in equities and signs of a potential peak in U.S. rates. While not yet aggressive, inflows are back in positive territory and could accelerate if risk sentiment deteriorates further.
5. Technical and Psychological Anchoring Around $2,300
The $2,300/oz level has emerged as a near-term pivot, with strong buying interest on dips and limited momentum above. Macro catalysts—such as weaker U.S. data, renewed geopolitical flare-ups, or dovish Fed commentary—would be required to unlock a sustained breakout. In the absence of such triggers, price action is likely to remain range-bound but skewed to the upside.
Short-Term Summary (1–4 weeks)
Gold is well-supported in the near term by falling real yields, strong safe-haven demand, and consistent central bank accumulation. With macro uncertainty elevated and inflation pressures easing, the environment is constructive for further gains. Unless U.S. yields rebound sharply or risk appetite improves meaningfully, gold is likely to remain firm and may test new highs on any incremental catalyst.
Short-Term Macro Thesis for Silver (1–4 weeks)
1. Beneficiary of Precious Metal Rotation
Silver is gaining tailwinds from the broader rally in gold, benefiting from spillover flows as investors seek undervalued alternatives within the precious metals complex. As gold flirts with all-time highs, silver is attracting attention for its relative value and higher beta to precious metals trends, especially among retail and macro-focused investors.
2. Industrial Demand Outlook Still Mixed
While silver shares monetary characteristics with gold, a large portion of its demand is industrial—particularly in electronics, solar panels, and automotive applications. The 90-day U.S. tariff pause has helped stabilize the global demand outlook for now, but uncertainty over China’s growth trajectory and weak European industrial activity continue to weigh on the medium-term consumption outlook.
3. ETF Inflows and Retail Interest Picking Up
Silver ETFs have begun to show early signs of inflows after a subdued Q1. Retail investor participation is also rising, supported by silver’s affordability compared to gold and its appeal as a dual-purpose asset—both a store of value and a play on industrial normalization. This resurgent interest is helping to firm up near-term price action.
4. Correlation to Real Yields Remains Supportive
Like gold, silver is benefiting from the recent decline in U.S. real yields. Although silver tends to lag during early yield shifts, its performance often accelerates in a sustained low-yield or risk-off environment. With front-end U.S. yields declining and inflation expectations holding steady, the real rate backdrop remains constructive.
5. Volatility Higher than Gold, But Direction Aligned
Silver’s higher volatility profile means it experiences sharper swings than gold, but the directional correlation remains tight. As macro catalysts (CPI, Fed speak, equity volatility) support precious metals broadly, silver has the potential to outperform gold in percentage terms during bullish phases, though corrections may also be more abrupt.
Short-Term Summary (1–4 weeks)
Silver is likely to remain supported in the near term by falling real yields, positive ETF flows, and strength in the broader precious metals complex. While industrial demand remains a headwind to a full-scale breakout, macro conditions favor continued upside or range-bound consolidation with a bullish bias. Silver may outperform gold tactically if risk-off conditions deepen or if industrial sentiment improves.
Short-Term Macro Thesis for Platinum (1–4 weeks)
1. Caught Between Industrial Demand and Precious Metals Strength
Platinum remains in a balancing act between its industrial use cases and its partial correlation with precious metals. The recent gold rally has provided a supportive backdrop for the complex, but platinum's gains have been modest due to persistent concerns over demand from the auto sector and broader industrial weakness, particularly in Europe and China.
2. Automotive Sector Headwinds Persist
Platinum demand is heavily tied to auto catalytic converters, especially in diesel vehicles. With continued structural decline in diesel car production, demand remains under pressure. While hybrid vehicle adoption offers some offset, the transition to electric vehicles continues to dilute platinum's core industrial demand base, limiting the upside impulse.
3. Investment Flows Still Light
Unlike gold and silver, platinum has not seen material inflows from ETF investors or institutions in recent weeks. The lack of a compelling monetary or inflation hedge narrative limits its appeal in a macro-driven investment environment. Retail and speculative flows remain muted, contributing to a subdued price profile relative to peers.
4. Supply Risks from South Africa Are Contained
While South Africa remains a critical producer of platinum, recent power outages and mining disruptions have been less severe than feared. Inventories remain adequate and spot supply disruptions have not materialized. This removes a potential bullish catalyst and keeps the market well-supplied for now.
5. Valuation Still Attractive Relative to Historical Norms
Platinum remains significantly undervalued relative to both gold and palladium on a historical ratio basis. While structural demand shifts justify some of this divergence, any improvement in industrial sentiment or rotation within the metals complex could attract mean-reversion trades in the short term.
Short-Term Summary (1–4 weeks)
Platinum is likely to remain range-bound in the near term, supported by precious metals strength but constrained by weak industrial and automotive demand. With no immediate supply threats or ETF-driven buying pressure, upside potential is modest unless a surprise catalyst emerges. The metal offers value on a relative basis, but lacks a clear near-term trigger for outperformance.
Short-Term Macro Thesis for Agricultural Commodities (1–4 weeks)
1. Weather Conditions Key to Near-Term Price Action
Planting season is underway in the Northern Hemisphere, and short-term weather developments will play a critical role in shaping yield expectations. Early indications suggest neutral-to-favorable soil moisture in major U.S. and European crop regions, pressuring prices for corn, soybeans, and wheat. However, any late frost or unexpected dryness could rapidly reverse the trend, especially given thin inventories in certain regions.
2. Global Demand Soft but Stabilizing
Global food demand has slowed slightly amid weak economic activity in emerging markets and subdued industrial use in sectors like biofuels and animal feed. However, the 90-day pause in U.S. tariff escalation has reduced downside risks to agricultural trade flows, particularly for soy and corn exporters. China remains active in securing long-term food security, but short-term buying remains cautious and data-dependent.
3. Stockpiles and Export Availability Still Adequate
Ending stocks for key crops like wheat, soybeans, and rice remain above critical levels in the U.S., Brazil, and India. Export capacity remains solid with no major shipping bottlenecks, keeping global markets well-supplied in the short term. Barring a sudden change in weather or trade restrictions, the supply environment looks balanced to slightly loose.
4. Soft Commodities (Coffee, Sugar, Cocoa) in Consolidation
Coffee and sugar prices have retreated from recent highs amid improving harvest conditions in Brazil and moderating speculative interest. Cocoa remains elevated due to tight supply from West Africa, but the pace of gains has slowed. For softs, the near-term path depends largely on updated crop forecasts and export data out of Latin America and West Africa.
5. Currency Movements Influencing Export Competitiveness
Agricultural exporters like Brazil and Argentina have seen currency volatility that affects pricing competitiveness. A weaker real or peso makes their crops more attractive on global markets, pressuring dollar-denominated contracts on U.S. exchanges. Short-term FX developments should be monitored closely as a swing factor for benchmark futures.
Short-Term Summary (1–4 weeks)
Agricultural commodities are likely to trade within broad ranges in the short term, with modest downside bias in grains due to favorable planting conditions and ample global supply. Weather risks remain a key wildcard, while trade flows have stabilized on tariff relief. Soft commodities are more idiosyncratic, with cocoa remaining tight but coffee and sugar looking vulnerable to further pullbacks. Currency dynamics in key exporting nations may amplify volatility across the complex.
Short-Term Macro Thesis for the S&P 500 (1–4 weeks)
1. Relief Rally from Tariff Pause Faces Resistance
The 90-day U.S. tariff pause triggered a sharp relief rally in equities, but the follow-through has been limited. While the move helped stabilize sentiment after a volatile start to April, the broader macro environment remains uncertain. Investors are cautious about re-risking too aggressively given the potential for trade tensions to re-escalate and the lack of clarity on fiscal and monetary policy direction.
2. Earnings Season to Provide Key Inflection Point
Q1 earnings season is underway, and forward guidance will be closely scrutinized. Margins remain under pressure from sticky labor costs and weak external demand, particularly for globally exposed sectors like tech, industrials, and materials. Companies that can demonstrate pricing power and cost control are likely to outperform, while misses may be punished more severely in a volatile macro environment.
3. Real Yields and Rate Expectations Remain a Drag
Despite the softer CPI print, U.S. real yields remain elevated by historical standards, particularly on the short end. While markets have scaled back rate cut expectations slightly, the Fed has not delivered a dovish pivot. This environment continues to pressure valuations, especially in growth and long-duration sectors, which remain sensitive to discount rate fluctuations.
4. Positioning Still Elevated in Mega-Caps
Positioning remains crowded in large-cap tech and AI-related names, which have driven much of the index’s year-to-date gains. These stocks are vulnerable to any signs of slowing earnings momentum or higher discount rates. Broader participation remains weak, with equal-weighted indices and small-caps underperforming, highlighting a fragile market foundation.
5. Volatility and Risk Premiums Elevated
The VIX remains elevated relative to historical norms, and implied equity risk premiums have widened modestly. Investors continue to demand compensation for uncertainty around fiscal sustainability, geopolitical tensions, and erratic policymaking. This is capping index upside and creating a more tactical, range-bound trading environment.
Short-Term Summary (1–4 weeks)
The S&P 500 is likely to remain range-bound with a slight downside bias as macro uncertainty, high real yields, and earnings risks weigh on sentiment. While the tariff pause offered a temporary reprieve, the market remains cautious ahead of key earnings reports and Fed commentary. A breakout likely requires either a decisive dovish policy signal or a strong earnings beat from index heavyweights—both of which remain uncertain in the short term.
Short-Term Macro Thesis for the Nasdaq (1–4 weeks)
1. Tariff Pause Supports Sentiment, But Tech Remains Vulnerable
The 90-day pause in U.S. tariff escalation has temporarily eased macro pressure on high-multiple growth stocks. However, tech remains exposed to any reversal in this policy shift, particularly sectors reliant on global supply chains, semiconductors, and cloud infrastructure. With trade policy still fluid and tensions with China unresolved, upside from here is cautious and conditional.
2. Earnings Expectations High for Mega-Cap Tech
Q1 earnings season presents a critical risk for the Nasdaq, with mega-cap tech stocks priced for perfection. Companies in AI, cloud, and consumer tech must show sustained revenue growth and margin expansion to justify current valuations. Any signs of deceleration in cloud spending, advertising revenue, or chip demand could trigger outsized drawdowns given heavy index concentration.
3. Sensitivity to Real Yields Still a Headwind
Nasdaq components, particularly high-duration tech names, are highly sensitive to U.S. real yields. While the softer CPI data has eased some pressure, yields remain elevated relative to early 2024, keeping valuation multiples under strain. Without a dovish shift from the Fed or a sharp drop in yields, upside in tech-heavy indices may be capped near-term.
4. AI Theme Still a Pillar of Support
The artificial intelligence investment theme remains structurally supportive for select Nasdaq names, particularly in semiconductors, data centers, and large-cap software. This has helped insulate the index from broader macro volatility, but dispersion is increasing. Investors are becoming more selective, and overstretched names may face mean reversion if growth expectations are not met.
5. Market Internals Show Weak Breadth
Breadth within the Nasdaq remains narrow, with leadership concentrated in a few names. Small and mid-cap tech have lagged, and many speculative growth stocks remain well below 2021 highs. This lack of broad participation makes the index more fragile and increases the risk of sharp rotations if leadership falters.
Short-Term Summary (1–4 weeks)
The Nasdaq faces a mixed short-term outlook: supported by AI optimism and a temporary macro reprieve, but constrained by elevated valuations, rate sensitivity, and high earnings expectations. The index is likely to remain volatile and headline-driven. Unless bond yields fall meaningfully or earnings surprise to the upside, the Nasdaq is likely to consolidate with downside risk concentrated in over-owned mega-cap names.
Short-Term Macro Thesis for the Dow Jones Industrial Average (1–4 weeks)
1. Tariff Pause Offers Temporary Relief for Industrials
The 90-day delay in U.S. tariff escalation has provided a short-term boost to Dow constituents with global revenue exposure, particularly in manufacturing, heavy industry, and multinational consumer firms. However, many of these companies remain exposed to sectors vulnerable to future tariff reinstatement, and the broader trade environment remains unstable.
2. Rate Sensitivity Lower than Nasdaq, but Still Present
The Dow's value-tilted composition offers some insulation from rising yields compared to growth-heavy indices. However, sectors like financials, industrials, and consumer discretionary still face headwinds from higher borrowing costs and tight credit conditions. Unless Treasury yields decline further, upside for these cyclical sectors remains limited.
3. Earnings Expectations Centered on Margins and FX
For Q1, the focus is on margins, particularly for exporters dealing with a stronger dollar earlier in the year and input cost pressures. Companies with diversified global operations may face currency translation headwinds, although recent dollar weakness could offer relief in Q2 guidance. Margins remain a key risk for Dow components in healthcare, industrials, and materials.
4. Domestic Demand Signals Softening
Several Dow constituents rely heavily on U.S. consumer and business spending. Recent soft retail sales and signs of cooling in the labor market suggest domestic demand may be plateauing. This tempers the outlook for names in financials, consumer products, and transport within the index, even as inflation pressures ease.
5. Capital Rotation Into Value Still Inconsistent
Although the Dow has a stronger tilt toward value and dividends, investor rotation out of tech and into value has been inconsistent. Flows into defensives and high-dividend stocks have picked up during risk-off periods, but overall participation remains tepid. Without sustained selling in growth, Dow outperformance may struggle to gain traction.
Short-Term Summary (1–4 weeks)
The Dow Jones is likely to remain range-bound in the short term, supported by tariff relief and more stable rate sensitivity than tech-heavy indices, but constrained by margin pressure and a plateau in domestic demand. Unless global trade conditions improve or earnings surprise to the upside, the Dow is expected to trade sideways with a slight defensive bias.
Short-Term Macro Thesis for the DAX 40 (1–4 weeks)
1. 90-Day Tariff Pause Provides Near-Term Relief
Germany’s export-heavy DAX 40 index has responded positively to the 90-day pause in U.S. reciprocal tariffs. Autos, machinery, and industrials—core DAX sectors—have benefited from a reduced threat of immediate trade disruption. However, the risk of re-escalation remains, and uncertainty around the final scope of U.S.-EU trade relations continues to cap upside conviction.
2. Stabilizing Eurozone Activity Surprises to the Upside
Recent eurozone industrial production and services data have printed stronger than expected, helping to stabilize growth expectations. Germany, in particular, has shown signs of early-cycle recovery following a sluggish 2024. This supports cyclical components within the DAX, including chemicals, capital goods, and autos, though durability remains in question.
3. Euro Strength a Modest Headwind
The euro’s recent appreciation, fueled by broad USD weakness and safe-haven flows into EUR assets, is a moderate drag on the export competitiveness of DAX constituents. While not yet at disruptive levels, further EUR strength could weigh on earnings revisions and dampen foreign revenue translation in Q2 guidance.
4. Energy and Materials Input Costs Declining
Declining energy and raw material prices are providing relief to energy-intensive German manufacturers. This supports margin expansion across industrial and automotive firms, especially those that struggled with elevated cost bases in late 2023. Input cost disinflation is a near-term tailwind for DAX profitability.
5. Valuations Attractive but Sensitive to Global Risk
The DAX trades at a relative discount to U.S. peers, drawing attention from value-oriented and international investors. However, its high exposure to global trade and industrial cycles makes it sensitive to external shocks. Sentiment toward China, U.S. economic policy, and energy markets will continue to drive short-term performance.
Short-Term Summary (1–4 weeks)
The DAX 40 is tactically supported by tariff relief, stronger eurozone data, and easing input costs, particularly for export-heavy sectors. However, euro strength and trade policy uncertainty remain headwinds. Unless global growth sentiment improves or the tariff truce extends, the index is likely to remain range-bound with upward bias driven by industrial earnings momentum and margin recovery.
Short-Term Macro Thesis for the FTSE 100 (1–4 weeks)
1. Tariff Pause Provides Limited Direct Benefit
The 90-day U.S. tariff pause has had a muted impact on the FTSE 100, given the index’s low exposure to manufacturing and trade-sensitive sectors. However, the broader reduction in global risk aversion has supported sentiment for FTSE components in energy, financials, and consumer staples, which are heavily weighted in the index.
2. Weak Pound Offers a Buffer for Multinationals
Sterling strength has moderated, but the pound remains below levels that would significantly erode foreign earnings. A weaker GBP continues to enhance the earnings outlook for the FTSE 100’s globally diversified firms, particularly in sectors like oil & gas, pharmaceuticals, and consumer goods that derive the majority of revenues overseas.
3. Commodity Complex Offers Tailwinds
Energy and basic materials—together a sizable portion of the FTSE 100—are supported by stable to firm oil prices and recovering precious metals. While natural gas remains under pressure, large integrated energy companies remain profitable. This commodity exposure differentiates the FTSE 100 from more domestically focused or tech-heavy indices.
4. Domestic Data Improving at the Margin
UK GDP surprised to the upside in February, with real wage growth continuing to support consumption. While the FTSE 100 is less sensitive to domestic conditions than the FTSE 250, improving UK macro data reduces political pressure and adds to the market’s relative resilience in a volatile global environment.
5. Defensive Sector Bias Supporting Stability
The FTSE 100’s composition skews heavily toward defensive sectors—consumer staples, utilities, healthcare, and energy—which has helped the index outperform during recent episodes of global volatility. This defensive profile continues to attract inflows from risk-averse global investors seeking yield and cash flow stability.
Short-Term Summary (1–4 weeks)
The FTSE 100 is likely to remain resilient in the short term, supported by a stable commodity backdrop, favorable FX dynamics, and its defensive sector tilt. While it lacks the upside beta of growth-oriented indices, the FTSE offers relative stability amid global uncertainty. Barring a sharp reversal in energy markets or sterling strength, the index is likely to trend sideways with modest upside potential.
Short-Term Macro Thesis for the Nikkei 225 (1–4 weeks)
1. Tariff Pause Offers Temporary Macro Relief
The 90-day U.S. tariff suspension has eased pressure on Japan’s export sector, particularly for autos, tech hardware, and industrial machinery—key components of the Nikkei 225. However, Japan remains indirectly exposed to U.S.-China tensions, and any further escalation could reignite pressure on global trade volumes and supply chains.
2. Yen Strength Becoming a Drag
The Japanese yen has strengthened sharply in recent weeks due to global safe-haven flows and declining U.S. yields. While this supports domestic purchasing power, it is a clear headwind for Nikkei-listed exporters and multinationals. A persistently strong yen threatens to erode margins and reduce earnings momentum unless offset by rising external demand.
3. Domestic Economic Support Under Discussion
Japanese political leadership is weighing fiscal support options, including a potential cut in the consumption tax to counter the rising cost of living. While not yet confirmed, such measures would likely boost domestic demand and benefit retailers, transport, and cyclical consumer names in the short term, offering some offset to external softness.
4. BoJ on Hold, Monitoring FX
The Bank of Japan has paused further rate hikes and is closely watching currency developments. While the BoJ is unlikely to ease, its current stance—combined with global risk-off sentiment—makes further yen appreciation plausible. Equity markets may remain constrained if the central bank stays passive in the face of stronger JPY and falling inflation expectations.
5. Foreign Inflows Moderating
Foreign investor flows into Japanese equities have slowed after a strong Q1. With the yen rallying and earnings season approaching, some profit-taking has emerged. Without a clear catalyst—such as decisive fiscal stimulus or strong earnings guidance—the Nikkei may face consolidation in the short term.
Short-Term Summary (1–4 weeks)
The Nikkei 225 is tactically supported by the global tariff reprieve and potential domestic fiscal stimulus, but rising headwinds from yen strength and slowing foreign inflows could limit upside. Exporters remain vulnerable to further currency appreciation and global demand softness. The index is likely to trade sideways with a modest downward bias unless Japan surprises with significant domestic policy action.
Short-Term Macro Thesis for Global News and Events (1–4 weeks)
1. U.S. Tariff Pause Buys Time, Not Certainty
The 90-day pause on U.S. reciprocal tariffs has reduced immediate trade disruption risk, but uncertainty remains high. Key partners such as the EU, Japan, and Canada are using this window to negotiate exemptions or restructuring of trade terms. China, however, remains under aggressive tariff pressure, and no talks are scheduled. Markets are operating with a temporary reprieve, not a resolution.
2. U.S. Fiscal Concerns Driving Cross-Asset Volatility
U.S. fiscal policy remains a central global risk. The House’s recent push to extend Trump-era tax cuts has reignited concerns about long-term debt sustainability. Investors are becoming more cautious on U.S. sovereign assets, with rising Treasury term premiums and weaker auction demand beginning to ripple through global funding and asset pricing.
3. Global Central Banks in Policy Limbo
The Fed, ECB, BoE, and BoJ are all in a wait-and-see mode. Rate cuts are priced in for late 2025, but soft inflation and market volatility are complicating the timeline. Central banks are watching global data closely, especially from the U.S. and China. Any surprise dovish pivot or inflation rebound could reset expectations quickly across FX, rates, and equities.
4. China Confronting Tariffs and Growth Headwinds
China remains under a 125% U.S. tariff rate and has responded with countermeasures. Domestic policy efforts are focused on stimulus for real estate, consumer spending, and tech innovation. However, confidence is weak, and data momentum remains soft. China’s ability to stabilize growth under tariff pressure is a key swing factor for global commodities, EM assets, and supply chain-linked equities.
5. Geopolitical Tensions Still Elevated
The global geopolitical backdrop remains tense. U.S.–China relations are under strain, EU–China talks on EV tariffs are intensifying, and Middle East risks remain simmering. While none of these flashpoints have escalated sharply, the latent volatility risk remains high. Any new sanctions, cyber events, or military incidents could destabilize commodity markets and trigger risk-off flows.
6. Global Elections and Policy Shifts Ahead
Several major economies—including the U.K., India, and Mexico—face elections in the coming quarters. Shifting fiscal and regulatory regimes may alter capital flow dynamics and investor sentiment. In the near term, political risk premiums are building in selected EMs, while developed market policy uncertainty is rising as incumbents respond to inflation and social pressures.
Short-Term Summary (1–4 weeks)
Global macro conditions are defined by a fragile pause in trade conflict, deteriorating fiscal optics in the U.S., and policy inertia from central banks. China’s growth trajectory and U.S. policy decisions will set the tone across asset classes. While risk sentiment has stabilized temporarily, cross-asset volatility remains elevated, and markets are highly sensitive to any escalation in trade, fiscal, or geopolitical tensions.
Disclaimer: Trade ideas provided on this page are for informational and educational purposes only and should not be considered financial advice or trading signals. These trade ideas are based on our global macro analysis and are intended to provide insight into market trends and potential opportunities.EliteTraders does not guarantee any specific outcome or profit. Trading involves significant risk, and you should always conduct your own analysis and risk assessment before making any trading decisions. By using this research, you acknowledge that EliteTraders is not responsible for any financial losses incurred based on the information provided.
1. EUR/USD – Long
Reason:
The euro is benefiting from multiple macro tailwinds: rotation out of the U.S. dollar due to fiscal and political uncertainty, improving Eurozone data, and reduced trade risk following the 90-day tariff pause. In contrast, the U.S. is grappling with deteriorating real yields, fragile confidence in Treasuries, and softer inflation, weakening the dollar's fundamental support. ECB is on hold, but with less inflation risk than the U.S., EUR continues to be favored in reallocation flows.
2. USD/JPY – Short
Reason:
With safe-haven flows returning and real U.S. yields falling, the yen is well-supported. The BoJ is stable and not expected to ease despite yen strength. Meanwhile, USD is losing its risk premium as U.S. macro data softens and Treasury markets show signs of strain. USD/JPY is particularly vulnerable to further shifts in global sentiment, and the U.S.–Japan policy divergence is narrowing.
3. USD/CHF – Short
Reason:
The franc is experiencing strong inflows amid global volatility and declining confidence in U.S. fiscal management. The SNB has shown no urgency to intervene despite the currency’s appreciation, and with global rates falling, CHF’s safe-haven characteristics are being revalued. USD, by contrast, is under structural pressure from twin deficits and reduced yield appeal.
4. AUD/NZD – Long
Reason:
New Zealand's domestic growth is materially weaker than Australia’s, with softer business confidence and industrial activity. While both currencies benefit from global risk-on flows, Australia’s stronger fiscal position and exposure to resilient commodities (e.g., iron ore) give AUD a relative macro advantage. RBNZ is also closer to easing than the RBA, which supports downside in this cross.
5. GBP/CHF – Short
Reason:
The pound is supported by better-than-expected data but remains fundamentally vulnerable to fiscal constraints and a still-cautious BoE. The franc, on the other hand, continues to attract global inflows and is underpinned by a strong current account and passive central bank. The macro divergence in terms of external balances and risk appetite favors CHF.
6. EUR/SEK – Long
Reason:
Sweden is facing softening growth, rising unemployment risk, and currency weakness, while the Eurozone is stabilizing both fiscally and in terms of macro data. The Riksbank has limited room to act aggressively due to financial stability concerns, whereas the ECB is maintaining a wait-and-see stance with better underlying data. This supports EUR outperformance over SEK in the short term.