Today’s month-end session was gladly welcomed by ever-ecstatic investors.
Yesterday’s session really materialized into a powerful move to the upside across global assets as the narrative took a significant turn.
President Trump gradually pointed towards a lower resolve to maintain the defense of the Strait of Hormuz, indicating that European and Gulf countries would be the ones in place to take car of the quintessential strategic route for Oil tankers – Currently the most important 10km region on the entire planet.
As Iran’s President Pezeshkian confirmed, the talks are indeed ongoing and guarantees are demanded in order to move forward towards a more sustainable peace process.
As indicated in our fresh WTI in-depth analysis, odds for a ceasefire by April 15 are still stuck around 25%, but this doesn’t bar the way for de-escalation. This comes as a wonderful surprise to Participants which were gradually pricing for a long-lasting conflict.
The situation is still far of being entirely resolved, with conditions for a deal still fragile, “trust levels at zero”, as said by Iran’s FM Abbas Araghchi, but just the simple idea of less uncertainty for the time being is a welcomed gift for Markets.
Global assets exploded in today’s action, with Silver up 7%, Gold up by 3%, Stock Indexes across the world following suit and Brent down 3% on the other hand.
Today’s strong moves could also have been magnified by the Month-End position closures, hence tomorrow will be an important test:
- Continuation of today’s optimism hints at further continuation and a deal properly taking place
- Rejecting today’s highs would mark the contrary, with doubts re-gaining the scene and more pain ahead
- A heavy fleet of US Marines are near and could still conduct a large operation if the narrative soured. Keep your eyes on this in case you see a swift turn in Markets.
Even when the conflict is done, traders will still have to be extremely careful with what happens in the Strait of Hormuz and Oil prices.
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