The first week of April has begun. Let’s take a look at the financial and political news that is affecting the markets.
First, the Events in the Middle East
The situation remains complex. U.S. marines are arriving in the region, suggesting that a ground operation may be underway, although it might be limited in scale. It seems that even with boots on the ground, the situation may not be easily resolved, but I am not an expert—let’s see what happens.
As a result, Brent crude oil prices are trading above $110 per barrel. This is the first time since 2022 during the Special Military Operation. Interestingly, markets have started to factor in the possibility that the Federal Reserve will tighten monetary policy rather than ease it—there is now a higher probability of interest rate increases in the U.S.
On this backdrop, the dollar remains quite strong. Looking at the DXY index, it rose by 2.7% in March. The last time there was a stronger increase was in July 2025.
As a result, precious metal prices continue to face pressure:
- Gold: -13.6% from the start of the month. The price remains above $4,500, but it has not recovered yet.
- Silver: -24% from the start of the month. It is traditionally more volatile compared to gold.
- Platinum: -20% in March
- Palladium: -21%
With metal prices, the situation can still be considered a correction. Despite double-digit declines, it’s worth remembering that there was a significant rise before, so a deep correction was inevitable in some form.
Where Did We End Up in March?
- The Energy sector increased by 11.3%. It was the clear leader of the month for obvious reasons.
- The Chemicals and Petrochemicals sector came in second. I remind you that the blockade of the Strait of Hormuz also affects the fertilizers sector.
- The Transportation sector came in third, rising by 0.7%.
The Metals and Mining sector performed the worst for the month (we discussed metal prices earlier). The sector fell by 11.5% over the month.
- The Construction sector dropped by 9.2%. It is heavily dependent on interest rates, and the central bank is not rushing to lower the key rate amid the crisis, as we have already discussed.
- IT fell by 7.4%.
- Finance and Consumer sectors each lost about 5.5%.
USDRUB is at 81.3. CNYRUB is at 11.75. The Russian Ministry of Finance is likely waiting for the end of the conflict before announcing new parameters for the budget rule. During the week, Deputy Minister Kolychov refused to comment on the return of the Ministry of Finance to foreign currency buying/selling operations. In other words, things remain as they are for now.
This is a positive factor for the currency rate, as pressure (selling currency on the open market) has been reduced. On the other hand, I remind you that at some point, export revenue will come into the market, and the currency rate could be affected—high oil prices will play a role.
FAQ
What factors are influencing the current financial markets?
Political tensions in the Middle East and rising oil prices are significantly impacting the financial markets.
How has the dollar performed recently?
The dollar has remained strong, with the DXY index increasing by 2.7% in March, the strongest gain since July 2025.
Why are precious metals under pressure?
Pressure on precious metals is due to the strength of the dollar and the expectation of tighter monetary policy from the Federal Reserve.
