The greenback (+0.5% for “$-Index” at 99.45) regains its status as a top safe haven asset in a geopolitical context that is tightening significantly following Trump’s remarks about peace talks with Iran (disputed negotiations, a story full of inconsistencies and carefully maintained ambiguity about who is supposed to sign what), a “message” that increasingly appears to be a “stock market maneuver” in favor of a few insiders, aimed at postponing a Wall Street correction by pushing oil prices below $110.
Benjamin Netanyahu dashed any hopes of quick peace by explaining that “it is Israel that will decide when peace should return… and it will not be until Israel has achieved all its goals.”
Moreover, rumors – reported by several US and Middle Eastern media outlets – indicate the deployment of 3,000 US soldiers in the region, and the possibility of a ground operation in Iran is gaining traction.
But even more worrying is Saudi Arabia’s consideration of joining the American-Israeli coalition, which seems hardly conceivable.
The US Dollar has shown particularly strong gains against the Australian Dollar (+0.6%), the Swiss Franc (+0.5% at 0.7910), +0.4% against the Pound, and more modestly against the Yen (+0.35%)… with the Euro proving more resilient with a decrease of 0.25% to 1.1580 (after reaching 1.1618 at its highest). Also notable is the weakening of the Yuan at -0.2% to 6.8920.
In terms of numbers, the preliminary manufacturing PMI calculated by S&P Global for the month of March came in at 52.4 points, up from 51.6 points in February, where analysts had expected a slight drop to 51.5 points. At 52.4 points, it is at its highest level in two months. However, the services PMI index deteriorated, with a decline to 51.1 points, against an expected 52 and 51.7 in the previous month. Lastly, the composite index, which synthesizes the first two, fell by -0.5 to 51.4 points, compared to 51.9 points a month earlier, hitting an 11-month low.
According to Chris Williamson, chief business economist at S&P Global: “The preliminary PMI survey data for March indicates a worrying combination of slowing growth and rising inflation following the outbreak of war in the Middle East. Companies are reporting a decline in demand due to increased uncertainty and the impact of the conflict on the cost of living.
Difficulties in the travel, transport, and tourism sectors are exacerbated by financial market nervousness and accessibility constraints, particularly due to concerns about rising interest rates, soaring energy prices, and delays in supply chains.”
