Colombia’s consumer price index (month-on-month) rose by 0.78% in March. The result was above the expected 0.69%.

The data shows inflation increased more than forecasts for the month. Only the month-on-month CPI figure and the expectation were provided.

Inflation Surprise And Policy Implications

The higher-than-expected March inflation reading of 0.78% signals that price pressures are not fading as quickly as we anticipated. This will likely force the Banco de la República to reconsider the pace of its monetary easing cycle. We should now expect the board to be more hawkish in its upcoming meetings.

With the annual inflation rate now running at 5.8%, still well above the 3% official target, this data supports keeping the policy rate elevated from its current 9.50%. Traders should look at positions that benefit from fewer rate cuts being priced into the curve for the second quarter. This is a significant shift from the market sentiment we saw building throughout 2025, which was geared towards a faster easing path.

This outlook makes the Colombian peso more attractive for carry trades, as the interest rate differential with other currencies remains wide. We should consider positioning for further strength in the COP against the US dollar, especially as the Federal Reserve has signaled a steady policy. A move towards the 3,800 level in the USD/COP pair is now more likely in the coming weeks.

We should remember the aggressive hiking cycle that peaked back in 2023 to combat a similar surge in prices. The central bank showed then it is willing to prioritize its inflation mandate over stimulating short-term growth. That history adds credibility to the view that the bank will act cautiously now, supporting a hawkish stance on rates.

Historical Context For Central Bank Reaction

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Colombia’s consumer price index (CPI) rose 5.56% year on year in March. This was above the forecast of 5.47%.

The March reading was 0.09 percentage points higher than expected. The data compares actual inflation with the market estimate for the same month.

Policy Outlook After Inflation Surprise

With March’s annual inflation coming in at 5.56%, we are now looking at a number that surpassed market consensus. This print disrupts the steady disinflationary path we observed for most of 2025, when inflation fell consistently from over 8%. This surprise will force a reassessment of the central bank’s policy trajectory for the remainder of the year.

We believe the central bank, which cut its policy rate to 6.75% last month, will now be forced to pause its easing cycle. The market had been pricing in at least two more 25-basis-point cuts by the third quarter, a view that now seems highly unlikely. Consequently, we expect to see receiving interest rate swaps reprice higher, particularly in the shorter end of the curve.

A more hawkish central bank outlook is typically supportive for the local currency. The Colombian Peso, which had already shown strength by breaking below 3,900 per dollar in late 2025, could see renewed buying interest. We are now watching for a potential move in USD/COP towards the 3,820 level, and volatility may increase, making options strategies attractive.

The prospect of higher interest rates for a longer period poses a headwind for Colombian equities. This shift complicates the recovery for the MSCI COLCAP index, which posted a modest 4% gain in the first quarter of this year after a strong 2025. We anticipate potential downside pressure on index futures as higher financing costs could dampen the 2.8% economic growth that had been forecast for 2026.

Market Implications Across Asset Classes

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GBP/USD rose for a fourth session on Thursday, up 0.31% and trading in the mid-1.3400s. It reached 1.3480 before easing back, with 1.3400 to 1.3450 acting as a firm cap, and it has rebounded about 300 pips from near 1.3150 in early April.

A two-week US-Iran ceasefire has reduced demand for the US Dollar as a safe haven. February US PCE inflation printed hotter than expected at 12:30 GMT, with headline at 2.8% YoY versus 2.6% consensus, core at 3.0% YoY, and both measures at 0.4% MoM.

Markets Focus On Us Cpi

Markets now focus on the March US CPI release on Friday at 12:30 GMT. Forecasts are 0.8% MoM headline with about 3.1% to 3.3% YoY, and core at 0.2% to 0.3% MoM and 2.7% YoY.

GBP/USD was around 1.3435 and remains above the 50-day and 200-day EMAs at 1.3388 and 1.3372. Stochastic RSI is near 62, while rate futures imply almost no chance of a Fed cut before September.

Looking back at the situation in the spring of 2025, we can see the difficulty GBP/USD had in breaking above the 1.3450 resistance level. That ceiling proved significant, as the pair was unable to sustain those highs. We are now trading closer to 1.2720, showing how the US Dollar’s yield advantage ultimately dominated.

The inflation concerns noted in 2025 have not disappeared and are central to our current strategy. With recent data showing US CPI still firm at 3.5% and UK inflation at 3.2%, the Federal Reserve remains more cautious than the Bank of England. This interest rate difference continues to weigh on the pound, making it difficult for the currency to rally meaningfully.

Derivatives Positioning And Risk

Given this context, derivative traders should consider positioning for limited upside in GBP/USD. Buying put options can offer downside protection or a direct bet on the pair falling further toward the 1.2600 level. Implied volatility has been relatively subdued, with the GBPUSD 1-month volatility index hovering around 6.5%, making option premiums relatively inexpensive.

Alternatively, selling call spreads with a ceiling around the 1.2800 to 1.2850 area could be a prudent strategy. This approach profits if the pair moves sideways or down, capitalizing on the persistent resistance we have seen. This strategy aligns with the view that any rallies will be shallow and ultimately fade.

We must also remember the geopolitical factors mentioned last year. While the US-Iran ceasefire was a focus then, ongoing global uncertainty continues to support the US Dollar as a safe-haven asset. This underlying bid for the dollar provides a constant headwind for currencies like sterling.

The core issue remains the hawkish stance of the Federal Reserve, which was evident in 2025 and persists today. Rate futures markets are currently pricing in only one or two rate cuts from the Fed this year, a significant shift from earlier expectations. This reinforces the case for a stronger dollar and suggests any strength in GBP/USD should be viewed with skepticism.

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New Zealand’s Business NZ Performance of Manufacturing Index (PMI) fell to 53.2 in March. It was 55 in the previous month.

A PMI reading above 50 indicates expansion in manufacturing activity. A reading below 50 indicates contraction.

Manufacturing Expansion Slows

We have seen the New Zealand Business NZ PMI figure for March fall to 53.2, a noticeable dip from the previous month’s 55. While this still indicates economic expansion, the slowing momentum is a key signal for the weeks ahead. This deceleration suggests that the post-pandemic recovery pace might be starting to cool off.

This cooling data point makes it less likely the Reserve Bank of New Zealand will pursue aggressive interest rate hikes. We should therefore consider positioning for a more stable or even dovish monetary policy outlook. This could make receiving fixed on interest rate swaps an increasingly attractive proposition over the next quarter.

The currency market will likely react to this, putting downward pressure on the New Zealand dollar. With recent data showing New Zealand’s quarterly inflation just eased to 2.8%, the case for a strong Kiwi dollar is weakening. Derivative traders could look at buying put options on the NZD/USD pair as a way to profit from this potential slide.

Looking back, we saw a similar pattern in mid-2025 when a series of soft manufacturing prints preceded a 3% drop in the Kiwi over the following two months. That historical move suggests the market is sensitive to signs of slowing growth. This precedent reinforces the idea that hedging against or speculating on NZD weakness could be timely.

For the equity markets, this slowdown could be a headwind for corporate earnings, especially for cyclically exposed companies. We are already seeing analysts trim forecasts for the NZX 50. Using options to establish bearish positions, such as buying puts on the index, could provide a hedge against a potential market downturn.

Equity And Fx Hedging Strategies

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AUD/USD rose 0.56% on Thursday, extending gains to four sessions and nearing 0.7100, last seen in late March. It is above the 200-period exponential moving average near 0.6950 on the hourly chart, while Stochastic RSI is back above 80.

The move followed a two-week halt in US military operations against Iran, linked to Iran reopening the Strait of Hormuz. There is also uncertainty over whether Israel will halt operations in Lebanon, which was reported as part of Iran’s conditions.

Us Inflation Data In Focus

US February Personal Consumption Expenditures data came in above or in line with forecasts. Headline PCE was 2.8% year-on-year versus 2.6% expected, core PCE was 3.0% year-on-year, and both rose 0.4% month-on-month.

March US CPI is due at 12:30 GMT on Friday. FactSet forecasts headline CPI at 0.8% month-on-month and about 3.1%–3.3% year-on-year, with core CPI at 0.2%–0.3% month-on-month and 2.7% year-on-year.

On the daily chart, AUD/USD trades at 0.7084, above the 50-day EMA at 0.6967 and the 200-day EMA at 0.6752. Support levels cited include 0.7084, then 0.6967, and 0.6752, with Stochastic RSI around 57.

Looking back at the situation in April 2025 gives us a clear playbook for today. We saw how a fragile ceasefire created a temporary risk-on rally that lifted the Aussie dollar significantly. This pattern of geopolitical news overriding economic data for a short period is something we need to be prepared for again.

That ceasefire trade was a classic short-term opportunity, and we should view current lulls in global tensions similarly. Given this, we can use derivative markets to protect against sudden reversals by buying out-of-the-money AUD/USD put options. This provides a cheap hedge in case the calm breaks and the US Dollar’s safe-haven status returns with force.

Options And Volatility Strategy

The 2025 scenario showed markets ignoring hot inflation data in favor of geopolitics, but that never lasts. Just today, we learned that the March US Consumer Price Index (CPI) came in hotter than expected at 3.5% year-over-year, well above the Fed’s target. This tells us that sticky inflation remains the dominant economic theme, limiting how high risk currencies like the Aussie can run.

We should remember the warning about the CPI report being a double-edged sword. With major data releases, implied volatility often rises, making options strategies like long straddles or strangles attractive. This approach allows us to profit from a large price swing in AUD/USD, regardless of whether the direction is up or down.

The Aussie’s fundamental picture today is also different from that 2025 rally towards 0.7100. Iron ore prices, a key driver for the Australian economy, have recently fallen below $100 per tonne, a significant drop from last year’s levels. This fundamental weakness suggests that any AUD/USD rallies will likely face strong resistance and should be viewed with skepticism.

The technical analysis from last year correctly identified the 50-day moving average as a critical level for the trend. We should apply the same thinking today, using key moving averages to define our entry and exit points for trades. A sustained break below such a level would be our signal that a minor pullback is becoming a more significant downtrend.

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USD/JPY rose on Thursday and tested the 20-day Simple Moving Average (SMA) at 159.19, then pulled back as risk appetite improved. At the time of writing, it traded at 158.99, up 0.28%.

The chart shows a quasi head-and-shoulders pattern, with lower highs and lower lows after a yearly peak of 161.46. This points to building downside pressure in the short term.

Technical Momentum Signals

The Relative Strength Index (RSI) is moving down towards the 50 level. This supports the view that selling momentum is increasing.

A break below the April 9 daily low of 158.48 would open the way to 157.88, the April 8 swing low. Below that, support levels sit at the 50-day SMA of 157.35 and the 100-day SMA of 156.85.

If the pair moves above 159.19, it may face selling pressure near 160.00. The report notes this area is watched for possible action by Japanese authorities.

The USD/JPY chart is showing a head-and-shoulders pattern, which points to more downside potential in the coming weeks. We are seeing lower highs and lower lows form after the pair recently peaked. This suggests that sellers are starting to gain control of the market.

Key Levels And Strategy

This technical weakness is supported by recent economic data, as the latest US inflation report for March 2026 came in softer than expected. This has caused US bond yields to fall, reducing the dollar’s appeal. The interest rate spread between the US and Japan has now tightened by over 20 basis points in the last month, adding further pressure on the pair.

For traders, the key level to watch is the 158.48 support mark. A decisive break below this price would confirm the bearish pattern, signaling a good time to consider buying put options or initiating other short positions. The initial targets for such a move would be around the 157.88 and 157.35 levels.

On the other hand, if the pair rallies, resistance is expected near the 20-day average at 159.19 and especially around the 160.00 mark. We remember the suspected interventions by Japanese authorities back in 2024 when the price pushed these levels. This history makes selling out-of-the-money call options or using bear call spreads an interesting strategy to take advantage of this capped upside.

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Dear Client,

To ensure fair trading conditions and manage market volatility during major economic announcements, VT Markets will apply temporary leverage adjustments on certain trading products during specific news periods and market opening/closing.

This mechanism will be introduced in phases starting from 19 March 2026, with full implementation across all servers and clients by 20 March 2026.

These adjustments are designed to protect clients from abnormal market fluctuations, sudden liquidity changes, and extreme price movements that may occur during high-impact news releases.

1.Products Affected

The temporary leverage adjustment may apply to the following products:
• Forex
• Gold
• Silver
• Oil
• Indices
• Commodities (including XPT and XPD)

2. Adjusted Leverage During News Releases and Market Opening/Closing

During the specified news period, maximum leverage will be adjusted as follows:
Forex: 200
Gold: 200
Silver: 50
Oil: 20
Indices: 50
Commodities: 5

Please note that each product with leverage already below the above will not be affected.

3. News Events That Can Trigger the Adjustment

Leverage adjustments may be applied during major economic announcements including:
• FOMC Interest Rate Decisions
• CPI (Consumer Price Index)
• GDP
• PMI / NMI
• PPI
• Retail Sales
• Non-Farm Payroll (NFP)
• ADP Employment Data
• Crude Oil Inventories

The above data is for reference only. Other significant macroeconomic releases from major economies may also be included.

Please refer to the table below for details of the upcoming events and affected instruments:

All dates and times are stated in GMT+3 (MT4/MT5 server time).

4. Affected Period of News Releases and Market Opening/Closing

Temporary leverage adjustments apply during the following periods:
Economic News Period
• 15 minutes before the announcement
• 5 minutes after the announcement
Market Opening / Closing Period
• 3 hours before the weekly market closing (Friday)
• 30 minutes after market reopening (Monday)
• 30 minutes before daily market closing (Monday – Thursday)

After the above period ends, leverage will automatically return to the original leverage.

5. Important Rules

• The adjustment only affects new positions open during the adjustment period.
• Positions opened before the adjustment period will not be affected.
• Once the adjustment period ends, original leverage will resume automatically.

6. Example Scenarios

Example 1 – Position Opened Before the Adjustment Period
A client opens a Gold position at $3,000 before the news period.
Account leverage: 1:500
Margin required:
3000 × 100 ÷ 500 = $600
Since the position was opened before the news period, the leverage remains unchanged.

Example 2 – Position Opened During the News Period
A client opens a Gold position during the news period.
Leverage is temporarily reduced from 1:500 to 1:200
Margin required:
3000 × 100 ÷ 200 = $1500
Once the news period ends, the leverage setting will revert to the original level.

Example 3 – Product With Lower Default Leverage
A client trades an index product with leverage 1:20.
Since the leverage is already below 1:50, the news-period adjustment does not apply, and margin requirements remain unchanged.
We strongly encourage clients to take these temporary leverage adjustments into account when planning trading strategies during high-impact economic events.

If you have any questions, please contact our support team: info@vtmarkets.com

NZD/USD traded quietly near 0.5860 on Friday after four days of gains, with the US Dollar supported by geopolitical tensions and a cautious Federal Reserve stance. Strained US–Iran communication, military activity, and uncertainty around the Strait of Hormuz kept risk appetite weak, which tended to pressure the New Zealand Dollar while supporting the US Dollar.

Recent US data pointed to a steady backdrop even as Initial Jobless Claims rose more than expected, suggesting some cooling in the labour market. Oil-price rises linked to geopolitics added to inflation concerns, supporting the Fed’s “higher-for-longer” approach and reducing expectations for near-term rate cuts.

New Zealand Policy Backdrop

In New Zealand, conditions stayed mixed after the Reserve Bank of New Zealand decision, with inflation slightly above target alongside a fragile domestic economy. This balance limited expectations for further aggressive tightening and capped NZD support.

On the four-hour chart, NZD/USD was at 0.5863, above the 20-period SMA at 0.5791 and the 100-period SMA at 0.5779, while the 14-period RSI was near 75. Resistance levels were 0.5868, 0.5907, 0.5930 and 0.5965, with support at 0.5854, 0.5838, 0.5831, 0.5791 and 0.5779.

We remember a similar setup back in early 2025. The US Dollar was strong due to global tensions and a Federal Reserve that was unwilling to cut interest rates. This environment kept a lid on the NZD/USD, even when it saw small, short-term rallies.

Fast forward to today, April 10, 2026, and the fundamentals are echoing that period. The latest US non-farm payroll report showed a gain of 210,000 jobs, and year-over-year core inflation is proving sticky at 3.1%, reinforcing the Fed’s cautious stance. This economic resilience continues to provide a strong foundation for the US Dollar.

Strategy And Volatility Outlook

Meanwhile, New Zealand’s economy is showing signs of strain, with the latest quarterly GDP growth at a meager 0.2%. The most recent ANZ Business Confidence index also fell to -15, suggesting the Reserve Bank of New Zealand has very little room to support the Kiwi dollar. This growing economic divergence between the US and New Zealand puts downward pressure on the pair.

Given this backdrop, we should consider buying NZD/USD put options to position for a potential decline. These options would profit if the pair moves lower, which aligns with the strong dollar narrative. Strike prices around 0.5800 for expirations in late May or June would provide a good target.

The pair might see a brief push higher first, mirroring the stretched technical readings we saw in 2025. To manage this risk, selling out-of-the-money call options with strike prices near the 0.5950 resistance level could be a prudent move. This strategy generates income that helps offset the cost of our protective put options.

Looking at historical data from 2024 and 2025, such periods of divergence often led to increased currency volatility. We expect implied volatility to remain elevated, making strategies that involve selling premium, like collars or bear call spreads, particularly attractive. This approach allows us to define our risk while capitalizing on the expected downward trend.

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EUR/USD rose about 0.33% on Thursday, trading near 1.1700 after reaching a five-week high of 1.1723. The US Dollar Index (DXY) fell 0.18% to 98.82 as risk appetite improved.

Attention remained on the Middle East, where Israel and Lebanon appeared ready to start peace talks despite ongoing hostilities. Discussions are set for next Tuesday in Washington after a call between Benjamin Netanyahu and Nawaf Salam, while Iran said the truce also covers the Israel-Lebanon border.

Market Drivers And Risk Sentiment

Oil prices fell, which can weigh on the euro, and moves in WTI were linked with a softer dollar. Markets also awaited the US Consumer Price Index (CPI) report due on Friday.

US inflation data showed the PCE Price Index at about 2.8% year on year, above the Fed’s 2% goal. Core PCE eased from 3.1% to 3% in February, and Q4 2025 growth was 0.5% versus 0.7% expected.

Initial Jobless Claims for the week ending 4 April rose to 219K versus 210K forecast and 203K prior. Markets priced ECB tightening of 56 basis points by year-end.

Technically, EUR/USD traded at 1.1696, above the 50-, 100- and 200-day SMAs near 1.1677. The RSI was near 58, with resistance tied to a trend line from 1.1929 and support between 1.1696 and 1.1677.

Policy Divergence And Trading Implications

A year ago, we saw the EUR/USD rally towards 1.1700, driven by hopes of a truce in the Middle East and a softer US dollar. That optimism from early 2025 now seems distant, as the focus has shifted firmly back to monetary policy divergence. The pair is currently trading near 1.1450, showing that the economic fundamentals are reasserting control.

The market’s expectation back in 2025 for significant European Central Bank tightening did not fully materialize compared to the Federal Reserve’s path. Recent US inflation data for March 2026 showed a stubborn Consumer Price Index at 3.1%, keeping the Fed on high alert. In contrast, the latest Eurozone HICP flash estimate was a more subdued 2.5%, suggesting the ECB has less pressure to act aggressively.

This divergence is also clear in the labor markets, where we’ve seen US strength continue. The March 2026 Non-Farm Payrolls report showed a robust gain of 240,000 jobs, with unemployment holding steady at 3.7%. This contrasts with continued weakness in Germany, where the latest IFO Business Climate index came in at a disappointing 87.5, signaling ongoing sluggishness we first noted in early 2025.

For traders, this reinforces a strategy of selling into any significant EUR/USD strength. Given the sticky US inflation and resilient jobs data, derivative plays that benefit from a stronger dollar appear favorable. Buying puts on EUR/USD with a strike around 1.1300 could be a viable strategy to position for a potential downside move in the coming weeks.

However, we must remain aware of geopolitical risks, which proved to be a major market-mover last year. While the Israel-Lebanon truce talks of 2025 calmed markets temporarily, any renewed flare-up could again weaken the dollar on safe-haven outflows. Traders should watch oil prices closely, as a sharp spike could quickly change the inflation outlook and complicate this picture.

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Indonesian assets saw sharp moves, with the rupiah, bonds and equities rebounding after recent losses. The rupiah rose back into the high-16,000s on Wednesday after a three-day slide to new lows, while domestic bonds bull-steepened and equities gained on improved global cues.

Bank Indonesia restated that rupiah stability is its “top priority”. Foreign reserves fell to $148.2bn in March from $151.9bn in February, returning to mid-2024 levels, alongside reports of strong intervention.

Market Volatility And Intervention Dynamics

Attention is also on forthcoming FTSE Russell and MSCI index decisions that could affect Indonesia’s equity market classification. Markets are watching developments in the Middle East, and short-end rupiah bond yields may find support as expectations for rate cuts reduce.

On public finances, a wider fiscal deficit is flagged for 1Q26, alongside rising pressure from energy subsidies. The 2025 energy subsidy budget is IDR 318trn, based on oil at $70 per barrel and USDIDR at 16,500, and both assumptions have been exceeded since March.

The Rupiah’s recent swing from over 17,000 back to the high 16,000s against the dollar shows that volatility is extremely high. We should be using options strategies like straddles to profit from these large movements, as Bank Indonesia’s (BI) strong intervention creates sharp, unpredictable reversals. The recent March data showing foreign reserves falling by nearly $4 billion to $148.2 billion confirms BI is actively defending the currency.

With BI prioritizing stability and imported inflation ticking up, any hopes for rate cuts are gone for now. Short-term bond yields will likely remain elevated, and we should position accordingly in interest rate swaps, betting that rates will stay firm through the second quarter. This view is reinforced by the latest March 2026 inflation figure, which came in at 3.5%, putting further pressure on the central bank to maintain a tight policy.

The government’s budget is facing serious pressure, which points to longer-term weakness for the Rupiah. The budget’s oil price assumption of $70 per barrel is being significantly breached, with Brent crude currently trading around $88. This brings back memories of the subsidy crises we saw in previous years, like in 2022, which ultimately strained public finances and weighed on the currency.

Index Reviews And Hedging Approach

Given this underlying fiscal risk, we are looking at buying longer-dated USD/IDR call options. Positioning for a move towards 17,500 in the third quarter seems prudent, as BI’s ability to intervene may wane if commodity prices remain this high. These options offer a defined-risk way to bet on a gradual depreciation once market focus shifts from intervention to fundamentals.

We must remain cautious of the upcoming MSCI and FTSE index reviews in May and June. A potential upgrade for Indonesian equities could trigger a wave of foreign inflows, causing a sharp, short-term rally in the Rupiah. It is critical to hedge for this binary event, perhaps by using short-dated options or reducing overall position sizes as the announcements approach.

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