[MARKET ANALYSIS] USD slightly firmer but off best after reports Iran has received the 15-point ceasefire plan; AUD lags

DXY is slightly firmer this morning, with the trough of the day coinciding with its 21 DMA at 99.07 (vs peak of 99.42). Geopols once again the main driver of action for the index this morning; to recap, a US-led 15-point ceasefire plan has been formed, whilst Iran has denied negotiations entirely. Earlier today, the index dipped off best levels on reports that Iran had received the 15-point plan, pointing to some initial progress to diplomacy. DXY fell from 99.36 to 99.25 within a few minutes, before then reversing much of that move thereafter.
G10s are entirely lower vs USD this morning. The net-importers of energy regions (EUR, GBP, JPY) appear to be faring better vs peers, given the pressure in crude prices in recent trade. Antipodeans are underperforming, with underperformance in the Aussie in the aftermath of the slightly softer-than-expected Australian monthly inflation data.
EUR has had some ECB speak to digest this morning, and a few regional data points. ECB President Lagarde highlighted that “small, one-off and short-lived supply shocks can be looked through”, but noted that it “will not be paralysed by hesitation”. No move on her comments. Chief Economist Lane also provided some commentary, where he stated that market-based inflation expectations have risen since the start of the Iran conflict. Also, in the rearview, German Ifo metrics were fairly resilient, with Business Climate holding steady at 88.6 (topping expectations), whilst Expectations dipped to 86.0 (prev. 90.2). ING believes the recent Middle East conflict should only “delay, not derail” the rebound in Germany. EUR is currently a touch lower vs USD, and trades within a 1.1587-1.1630 range.
GBP is also incrementally lower vs the USD, holding within a 1.3370-1.3436 range and trading in close proximity to its 100 DMA (1.3407), 21 DMA (1.3390) and 200 DMA (1.3433). Cable saw some fleeting upside on this morning’s inflation report, where headline printed a touch below expectations though core and services Y/Y figures topped expectations. Ultimately, the data lacks significance given it surveys the February period, before the Iran conflict began. Nonetheless, the series marginally adds to the stagflationary diagnosis the UK economy is currently subject to.
Barclays FX month-end rebalancing: strong USD buying against most majors, and moderate buying against the EUR, JPY and GBP.