Markets moved into the Good Friday break with volatility still high and sentiment still heavily tied to the Middle East. Reuters reported that hopes for de escalation earlier in the week faded after fresh US threats against Iran, sending investors back into a more defensive mood. As a result, stocks came under pressure again, the US dollar strengthened, and oil surged back above $100 as traders refocused on supply disruption risk and the continued closure of the Strait of Hormuz.
Oil was once again the clearest market driver this week. Reuters said Brent rose about 6.8% on April 2 to around $108 a barrel, while WTI climbed about 6.4% to roughly $106.5, reversing part of the previous session’s drop. That sharp rebound matters far beyond the energy market itself, because it keeps inflation fears alive and complicates the outlook for central banks, growth, and risk appetite across the board. Reuters also noted that Brent posted a historic monthly jump in March, and OPEC+ is expected to discuss the price surge at its April 5 monitoring meeting.
In currencies, the dollar finished the week on firmer ground as traders again reached for safety. Reuters reported that the dollar index climbed back above 100 on April 2, while the euro slipped toward $1.153 and sterling fell as renewed war fears pushed investors away from risk sensitive positions. That move reinforced the broader FX theme of the week: safe haven demand returned quickly whenever hopes for de escalation weakened, while rate expectations stayed sensitive to the inflation impact of higher oil prices.
Gold had another difficult stretch. After rallying earlier in the week when the dollar softened and markets briefly hoped for calmer headlines, bullion reversed lower again on April 2. Reuters reported that spot gold fell about 2% to $4,664.39, pressured by a stronger dollar, higher yields, and fears that elevated oil prices could keep the Federal Reserve cautious for longer. That leaves gold caught between two opposing forces: safe haven demand on one side and a less friendly rates backdrop on the other.
The broader macro picture was not entirely weak. Reuters reported that manufacturing activity in the United States, Europe and China showed resilience in March, while US private payrolls rose by 62,000, above expectations. But that relative strength may not bring much comfort if the energy shock lasts, because stronger activity combined with higher oil keeps the stagflation conversation alive rather than removing it. This is one reason markets have remained so headline driven all week.
Crypto now becomes the market to watch over the weekend simply because it keeps trading while many traditional markets pause for the holiday break. Bitcoin has slipped back below $70,000 and was trading near $66,809, while Ether was near $2,051. With Reuters noting that investors were already cutting risk ahead of the long weekend, the most reasonable base case is for crypto to remain highly headline sensitive, with sentiment likely to stay cautious unless there is a credible sign of de escalation. That is an inference, but it is well supported by the week’s pattern across oil, the dollar and broader risk assets.
Looking ahead to next week, the market focus is likely to stay fixed on three things. First, whether oil can remain elevated after the OPEC+ monitoring meeting on April 5. Second, whether the stronger dollar can hold its safe haven bid if geopolitical pressure persists. Third, whether inflation fears continue spilling into FX, gold and broader rate expectations. Reuters also noted that global central banks largely stayed on hold through March because the war has made the outlook harder to read, which means next week’s price action may be driven less by policy decisions and more by how markets interpret the evolving inflation shock.
For now, the message is clear. Traditional markets head into the break with energy risk still in charge, the dollar regaining support, and gold still struggling to find a clean direction. That leaves crypto as the weekend sentiment gauge, and if volatility remains elevated there, traders in FX, oil and gold are unlikely to get a calmer start to next week.
