Daily Market Outlook, April 16, 2026
Daily Market Outlook, April 16, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Global equities are trading with a continued risk tone this morning, with the MSCI All Country World Index hitting a fresh all-time high as investors continue to add risk to signs that the US and Iran may extend their ceasefire. The prospect of a two-week extension has helped markets unwind part of the geopolitical risk premium that built up during the recent conflict. The MSCI ACWI rose as much as 0.3%, putting it on track for a tenth consecutive session of gains, which would mark its longest winning streak since September. In Asia, equities rallied 1.3%, recovering most of their conflict-driven losses as improving sentiment around the Middle East combined with support from strong US earnings and record closes on Wall Street. The current risk-on tone is being driven primarily by hopes that tensions in the Middle East may continue to ease. According to reports, the US and Iran are considering extending the current truce by another two weeks, giving both sides more time to negotiate a broader agreement. Mediators are reportedly trying to establish technical talks focused on the most difficult outstanding issues, including the reopening of the Strait of Hormuz and Iran’s nuclear enrichment programme. For markets, the key implication is straightforward: any further de-escalation would likely help contain oil prices, reduce uncertainty, and improve the near-term backdrop for global growth assets. The market is increasingly treating the ceasefire story as a reason to fade war-premium positioning. That has supported equities globally and improved sentiment in Asia, while also reinforcing the idea that energy upside may be more contained if negotiations continue to progress. After the record closes on Wall Street, European equity futures are pointing higher, suggesting the constructive tone should carry into the cash open. For now, the market appears willing to look through geopolitical noise as long as diplomacy remains the dominant narrative.
One emerging theme of note from recent BoE and ECB communication is a clearer shift in messaging toward unchanged policy rates at the April meetings. In the euro area, the signal is becoming more explicit. Reports suggest the ECB is leaning toward holding rates in April, while Schnabel has argued that policymakers can afford to take more time to assess the impact of the Iran-related energy shock before responding. In the UK, the tone has also softened. In a BBC interview, Governor Bailey said it was too early to draw firm conclusions about the economic effects of the latest energy shock. That marks a further step back from the more hawkish “stand ready to act” language used previously and points to a greater willingness to wait for more evidence before adjusting policy. Taken together, the message from both central banks is that the current shock is being treated as something to evaluate carefully rather than react to immediately, reinforcing the case for April rate holds.
Domestically, UK February’s 0.5% m/m GDP growth was a meaningful upside surprise versus the 0.1% consensus and the strongest monthly gain in more than two years. As expected, the bulk of the strength came from services, with employment-related activities rebounding sharply and making the largest positive contribution—a move that fits with survey evidence suggesting labour demand is starting to bottom out. Retail and wholesale also showed strength, but wholesale activity, not consumer retail, primarily drove the better-than-expected result. With January revised up to 0.1% m/m, the carry for Q1 is now much firmer: even with a flat March, quarterly GDP could still print around 0.6–0.7% q/q, well above the BoE’s 0.1–0.2% q/q underlying growth estimate. Even so, one strong pre-conflict GDP print is unlikely to shift the BoE dramatically. Monthly sector detail can be noisy, and policymakers still have to weigh the implications of the Middle East shock. The BoE believes that the economy may still be running well below potential in 2026, which should continue to temper concerns about the inflationary effects of higher energy prices.
Overnight Headlines
Macro
- China Q1 GDP beat expectations at 5.0% y/y and 1.3% q/q SA, with industrial production also stronger than expected.
- The details were more mixed: retail sales missed, fixed asset investment softened, and the jobless rate ticked up to 5.4%.
- In property, the backdrop remains weak but the pace of deterioration is easing: property investment -11.2% YTD, while declines in new and used home prices moderated.
Asia / Rates / Flows
- Japan flow data showed solid foreign buying of Japanese equities and renewed Japanese buying of foreign bonds.
- Australia jobs were broadly in line: employment rose 17.9k, unemployment held at 4.3%, with strength in full-time jobs offset by weakness in part-time work.
- US TIC data were strong, with total net flows at $184.5bn and net long-term flows at $58.6bn.
Central Banks / Governments
- ECB officials are reportedly leaning toward an April hold.
- BoJ messaging remains in focus as officials balance inflation and policy guidance against war-related uncertainty.
- Geopolitically, markets continue to watch signs of US-Iran de-escalation, while the US Senate rejected another effort to end the war in Iran.
FX
- The USD remains near six-week lows, as markets continue to price in a possible US-Iran peace path.
- USDJPY is softer, while AUD retains a constructive tone near YTD highs after China’s GDP beat.
- Broader Asian FX is consolidating but remains supported by improving risk sentiment.
Fixed Income
- China’s domestic savings base continues to support its bond market.
- JGBs were mixed, with US Treasury weakness acting as a modest drag.
- Foreign holdings of US Treasuries rose to record highs in February.
Commodities
- Oil is steady, with hopes for diplomacy offset by ongoing Hormuz shipping constraints.
- Gold is stable, as traders weigh peace prospects against still-elevated geopolitical uncertainty.
Equities
- Asian equities advanced on ceasefire/peace-deal hopes and support from strong US earnings.
- The China data pulse was good enough to help sentiment, even if the consumer side remained soft.
- Corporate headlines remain active across US tech, autos, and banks, but macro and geopolitics are still the main drivers.
Crypto
- Crypto headlines remain more idiosyncratic, with focus on regulatory/political scrutiny around major industry players.
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EUR/USD: 1.1895 (EU1.28b), 1.1700 (EU1.25b), 1.1545 (EU1.17b)
AUD/USD: 0.6710 (AUD707.9m), 0.6785 (AUD590m), 0.7010 (AUD525.8m)
USD/JPY: 158.40 ($1.25b), 161.00 ($1.1b), 156.90 ($863m)
USD/BRL: 5.1000 ($857m), 5.2000 ($572m), 5.3000 ($530.8m)
USD/CAD: 1.3625 ($410m), 1.3925 ($365.2m)
GBP/USD: 1.3000 (GBP607.7m), 1.3275 (GBP477.6m), 1.3520 (GBP307.4m)
USD/KRW: 1440.00 ($360m), 1465.00 ($320m)
USD/CNY: 6.8660 ($1.14b), 6.8000 ($378m), 7.0855 ($310.5m)
USD/MXN: 17.71 ($641.6m), 17.26 ($327.1m)
EUR/GBP: 0.8875 (EU527.3m)
CFTC Positions as of April 10, 2026:
Equity fund speculators increase S&P 500 CME net short position by 12,328 contracts to 228,259
Equity fund managers raise S&P 500 CME net long position by 27,168 contracts to 939,849
Speculators trim CBOT US 5-year Treasury futures net short position by 33,911 contracts to 1,552,929
Speculators increase CBOT US 10-year Treasury futures net short position by 39,561 contracts to 823,624
Speculators increase CBOT US 2-year Treasury futures net short position by 74,691 contracts to 1,712,015
Speculators trim CBOT US UltraBond Treasury futures net short position by 7,746 contracts to 260,383
Speculators increase CBOT US Treasury bonds futures net short position by 27,363 contracts to 58,996
Bitcoin net long position is 2,540 contracts
Swiss franc posts net short position of -30,694 contracts
British pound net short position is -56,354 contracts
Euro net short position is -7,541 contracts
The net short position in Japanese yen is -93,742 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish
Weekly VWAP Bullish
Above 6900 Target 7200
Below 6850 Target 6785
DXY
Daily VWAP Bearish
Weekly VWAP Bearish
Above 100 Target 100.50
Below 99.50 Target 97.50
EURUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.1740 Target 1.19
Below 1.17 Target 1.1650
GBPUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 1.3480 Target 1.37
Below 1.34 Target 1.3290
USDJPY
Daily VWAP Bearish
Weekly VWAP Bearish
Above 158.50 Target 161
Below 158 Target 157.50
XAUUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 4600 Target 5000
Below 4500 Target 4350
BTCUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 72k Target 78.5k
Below 70k Target 67k
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!