GEOPOLITICS STILL REMAINS A QUESTION MARK

GEOPOLITICS STILL REMAINS A QUESTION MARK

During the week, the debate on the Middle East oscillated between renewed war and truce, although neither side is willing to confirm that it is happy with the deal. For now, it looks like an early end to the stand-off in the Middle East may be imminent. With ships already being allowed through the Straits of Hormuz, the main bone of content has been diluted.

However, many of the problems created by the war may be structural. Oil prices may remain elevated for longer as supplies lag. The resumption of oil and gas facilities in the Middle East may take more time. Also, supply chains have been badly dented and the experience of 2022-23 was that it takes time to repair the supply chain.

US BOND YIELDS STAY ON THE LOWER SIDE

Data Source: Bloomberg

Key takeaways on US bond yields data:

The week saw US bond yields taper by 7 bps from 4.317% to 4.244%

The two-sided language of the Fed minutes has kept yields subdued

Powell’s speech at Harvard had ruled out rate cuts for the time being

While inflation is up, it is not expected to exceed 150 bps from the 2% target

For the week; US 10-year bond yields scaled a high of 4.363% and a low of 4.226%.

US DOLLAR INDEX (DXY) BACK IN DOUBLE DIGITS

Data Source: Bloomberg

Key takeaways on US Dollar Index data:

DXY not only fell decisively below 100, but also settled closer to 98 levels

Due to fiscal deficit and debt burden, markets remain sceptical about dollar strength

With rate hikes ruled out for now, dollar strength also looks unlikely

Dollar lost 14% in 2025, and short covering is largely done and dusted

For the week, US dollar index (DXY) touched a high of 99.18 and a low of 97.63.

INDIA BOND YIELDS FLAT: STAY UNDER 7%

Data Source: RBI

Key takeaways on India Bond Yields data:

For the week, India 10-year yields tapered from 6.914% to 6.905%

RBI policy language veered towards status quo on rates at best, for now

If the MPC minutes this week give the same message, yields could taper further

The FPI selling in bonds has also tapered in second half of April 2026

For the week, India Bond Yields touched a high of 6.978% and a low of 6.865%.

RUPEE (USDINR) RECOVERS FURTHER IN THE WEEK

Data Source: RBI

Key takeaways on USDINR data:

The Indian rupee gained from a high of ₹93.09/$ to ₹92.60/$ for the week

FPIs were net buyers in equity to the tune of $514 million, albeit small

RBI measures to curb speculation in rupee has helped it to stabilize

RBI instructions to OMCs to stop spot dollar buying, will help rupee harden further

RBI hard measures have helped prop up the rupee. For the week, the USDINR touched a high of ₹92.444/$ and low of ₹93.503/$.

CRUDE OIL – TAPERS ON MIDDLE EAST PEACE HOPES

Data Source: Bloomberg

Key takeaways on Brent Crude Prices:

Brent Crude had a volatile week, but closed sharply lower at $90.38/bbl

Markets are betting on Middle East peace, and opening of Straits of Hormuz

However, a higher price normal of around $90-95/bbl is now being assumed

A lot will depend on how quickly GCC oil & gas capacities are back on track

For the volatile week, Brent Crude touched a high of $103.87/bbl and a low of $86.09/bbl.

SPOT GOLD CLOSES HIGHER ON FLAT RATE HOPES

Data Source: Bloomberg

Key takeaways on spot gold (XAU) price data:

After a volatile week, spot gold closed higher at $4,830/oz

With Powell hinting at flat rates, opportunity cost is no longer an issue for gold

Gold is still down 13.7% from its late January peak of $5,595/oz

India spot gold is currently trading at ₹1,51,358 / 10 grams

For the week, spot gold touched a high of $4,871.78/oz and low of $4,633.57/oz.

SPOT SILVER BOUNCES IN TANDEM WITH GOLD

Data Source: Bloomberg

Key takeaways on spot silver (XAG) prices:

The week saw silver gaining from $75.9014/oz to $80.8103/oz

Like gold, the bounce was triggered by hopes of stable interest rates

Spot Silver is still down -33.6% from its late January peak of $121.67/oz

India spot silver is currently trading at ₹2,47,930 / Kilogram

The Gold-Silver Ratio of 59.77X has stabilized at a lower new normal.

For the week, spot silver touched a high of $83.07/oz and low of $72.60/oz.