Headlines:
Markets:
- Brent crude up 4.7% to $95.10, WTI crude (June) up 5.9% to $87.50
- US dollar little changed and keeping more mixed on the day
- Major indices in Europe nursing 1% losses, S&P 500 futures down 0.5%
- US 10-year yields up 2.2 bps to 4.265%
- Gold down 0.8% to $4,790, Silver down 1.9% to $79.25
- Bitcoin up 2.0% to $75,300
It’s a risk-off mood in markets but not really as bad as you would think if going by the headlines.
The reopening of the Strait of Hormuz on Friday last week was brief and did not last a day. That as Iran reverted back to close the waterway amid their dissatisfaction with the continued US naval blockade. In turn, they’re pushing an uncompromising position and maintaining that there are gaps on key issues. In that lieu, Tehran is saying that they don’t see a need for talks so long as Washington continues with its threats.
That as we move another day closer to the ceasefire in hostilities, which will expire on Wednesday.
Still, it would seem that markets are keeping the faith that something good is still around the corner. Sure, we are seeing a dent to risk sentiment today. However, it really isn’t as bad of a knock all things considered.
After hitting record highs last week and posting near 12% gains in the past three weeks, S&P 500 futures are only down 0.5% on the day.
Meanwhile, oil prices may have opened with a gap higher but are still not quite producing the surging volatility that we saw amid the height of the panic during the war so far. Brent crude is up 4.7% to $95.10 while the June contract for WTI crude is up 5.9% to $87.50. On the latter, do be reminded that the May contract will expire later today.
In other markets, major currencies did not get up to much with the dollar also not really moving on the session. EUR/USD is up 0.1% to 1.1772 while USD/JPY is also just marginally up by 0.1% to 158.85 on the day. Besides that, USD/CAD is down 0.1% to 1.3685 and AUD/USD is down 0.1% to 0.7158 currently. All in all, no major significant movements in the FX space.
As for precious metals, we are seeing gold marked down by 0.8% to $4,790 and silver down 1.9% to $79.25 in response to the risk retreat. But similar to the mood in equities, the drop here isn’t really that bad. Even with the near 2% fall today, it still isn’t enough to undo the Friday jump in silver prices.
Are markets hoping for Trump to deliver another TACO moment in the coming day(s)?
