THE WAR IS ON; AND SO IS THE TRUCE

THE WAR IS ON; AND SO IS THE TRUCE

The global markets were in a piquant situation. There was not much progress on the peace talks between the US and Iran. However, the truce continues for now, although the Straits of Hormuz remains effectively blocked. Trump needs Congressional approval to extend the war beyond 01-May, and that may be holding back the US from any aggressive steps.

However, the pressure on Indian markets was fairly apparent. As Brent Crude surged to $105/bbl, the rupee had one of the worst weeks in terms of returns. FPIs turned aggressive net sellers on the last 2 days of the week. But the real shock that markets are expecting is when the persistent oil blockades leads to a sharp fall in oil demand.

US BOND YIELDS INCH UP 7 BPS FOR THE WEEK

Key takeaways on US bond yields data:

The week saw US bond yields up by 7 bps from 4.244% to 4.310%

US bond yields almost undid the 7-bps rise of the previous week

Markets are focused on Fed Policy this week, and the Fed statement

It is expected that next Fed chief, Kevin Warsh, may continue to stay hawkish

For the week; US 10-year bond yields scaled a high of 4.355% and a low of 4.238%.

US DOLLAR INDEX (DXY) STRONG, BUT, IN A RANGE

Key takeaways on US Dollar Index data:

After breaking below 100 level, the DXY has struggled to get back

Fiscal deficit, war expenditure, and rising consumer debt are keeping dollar in check

A lot will depend on the language of the Fed in the policy this week

Dollar Index still remains well below its previous peak on macro headwinds

For the week, US dollar index (DXY) touched a high of 98.94 and a low of 98.01.

INDIA BOND YIELDS FLAT: INCHING UP ABOUT 3 BPS

Key takeaways on India Bond Yields data:

For the week, India 10-year yields inched up from 6.905% to 6.933%

MPC minutes have hinted at status quo on rates, so likely to be rangebound

Inflation pressure likely to keep bond yields closer to 7.0%

FPI have been heavy sellers in debt paper in the month of March and April 2026

For the week, India Bond Yields touched a high of 6.982% and a low of 6.868%.

RUPEE (USDINR) FALLS SHARPLY ON OIL WOES

Key takeaways on USDINR data:

The Indian rupee weakened sharply from ₹92.60/$ to ₹94.25/$ for the week

FPIs turned net sellers in equities towards the end of the week

The real trigger came from crude oil prices jumping up 16.5% for the week

Rupee weakness also came from RBI relaxing some of its speculative restrictions

RBI hard measures had helped prop up the rupee; but oil played spoilsport this week. For the week, the USDINR touched a high of ₹92.631/$ and low of ₹94.313/$.

CRUDE OIL – SURGES SHARPLY IN SUPPLY CHAIN CONSTRAINTS

Key takeaways on Brent Crude Prices:

Brent Crude surged this week from $90.38/bbl to $105.33/bbl

With the US-Iran talks inconclusive, markets are starting to lose patience

Markets are also preparing for a sharp supply gap as countries draw down reserves

Delay resumption of capacities will keep oil at a higher new normal.

For the week, Brent Crude touched a high of $107.48/bbl and a low of $92.75/bbl.

SPOT GOLD CLOSES LOWER AS DOLLAR HARDENS

Key takeaways on spot gold (XAU) price data:

After a volatile week, spot gold closed lower at $4,709.25/oz

With rate cuts unlikely, the opportunity cost kicker of gold is missing

Gold is still down 15.8% from its late January peak of $5,595/oz

India spot gold is currently trading at ₹1,56,043 / 10 grams

For the week, spot gold touched a high of $4,833.34/oz and low of $4,657.64/oz.

SPOT SILVER ALSO GIVES UP GAINS

Key takeaways on spot silver (XAG) prices:

The week saw silver tapering from $80.8103/oz to $75.6988/oz

Like gold, the weakness was triggered by a slightly stronger dollar

Spot Silver is still down -37.8% from its late January peak of $121.67/oz

India spot silver is currently trading at ₹2,51,165 / Kilogram

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

For the week, spot silver touched a high of $80.815/oz and low of $73.924/oz.