The collapse of US-Iran peace talks in Islamabad over the weekend and Trump's subsequent announcement of a naval blockade on Iranian ports has re-injected risk-off flows into FX markets, reversing last week's ceasefire-driven optimism — directly supportive of our short USD/CHF position and a headwind for our JPY shorts as Japan's energy vulnerability weighs on the yen. MAS delivered a hawkish surprise this morning, increasing the rate of appreciation of the S$NEER policy band, validating our short CAD/SGD and short USD/SGD positions and wrong-footing the consensus "watchful hold" call. BoJ Governor Ueda's speech yesterday signalled growing caution on an April rate hike, helping cool swap-market pricing further and keeping our three JPY-short positions under pressure. US March CPI printed at 3.3% YoY last Thursday with a record 21.2% monthly gasoline surge, reinforcing the stagflationary narrative that has been weighing on the dollar and pushing EUR/USD above 1.17.
How our views are tracking
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Short EUR/AUD — thesis strengthened Already +175 pips and inside the tactical target zone at 1.6577, as the ceasefire-driven AUD rally and eurozone stagflation narrative (Composite PMI slumping to a 10-month low of 50.5 in March) continue to confirm the ECB-RBA divergence thesis. |
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Short USD/CHF — thesis strengthened At +157 pips and firmly in the 0.7750–0.7850 target zone, the combination of Swiss CPI undershooting at 0.3% YoY (removing SNB intervention pressure) and renewed safe-haven CHF demand following the Islamabad collapse makes this the portfolio's standout performer. |
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Short CAD/SGD — thesis strengthened MAS surprised the market this morning by increasing the S$NEER appreciation slope — beating MUFG's "watchful hold" base case and providing the catalyst this stalling position needed to break lower. |
Invalidator watch
The most important shift since our March 31 analysis is the BoJ April hike probability declining from roughly 70% to around 44% in swap pricing. Governor Ueda's cautious speech yesterday — read by Deputy Himino in Tokyo while Ueda attends meetings in Washington — has further cooled expectations. This directly threatens our three JPY-short positions (USD/JPY, EUR/JPY, CHF/JPY), with CHF/JPY already deep offside at −489 pips. No invalidators have formally triggered — the BoJ tightening bias remains in the March Summary of Opinions, and oil prices at $96–103 Brent are well below the $120–130 thresholds. But conditions are developing, and the BoJ meeting on April 27–28 is now a genuine coin-flip. All non-JPY positions remain firmly within their valid ranges.
Next week
| Thu Apr 16 | Australia March Labour Force | Affects: EUR/AUD, GBP/AUD, AUD/NZD |
| Tue Apr 21 | NZ Q1 2026 CPI | Affects: AUD/NZD, NZD/CAD |
| Tue Apr 20 | Canada March CPI | Affects: CAD/SGD, GBP/CAD, NZD/CAD |
| Wed Apr 22 | UK March CPI | Affects: GBP/AUD, GBP/CAD, GBP/JPY |
| Apr 20–21 | US-Iran ceasefire expiry window | Affects: all pairs |
The NZ Q1 CPI on April 21 is the single most important data point for our long AUD/NZD position — the RBNZ forecasts 4.2% headline by Q2, and an upside surprise in Q1 would narrow the RBA-RBNZ divergence that underpins the trade, while a miss would reinforce it. The ceasefire expiry window around April 20–21 is the wildcard that could overwhelm everything else.
Full analysis with all pair rankings, carry landscape, risk dashboard, and catalyst calendar available for Edge and Dossier members.