It’s an all-out rally after the Central Bank holds – North American Session Market Wrap for April 30

Month-end trading sessions love to bring in a few elements of change and surprise, particularly after such bizarre trading in April.

This week brought pivotal fundamental events across all types of Markets, from five major Central Banks reporting to the largest-cap US Stocks revealing their Q1 numbers, with broad beats all around.

Overall, it seems that the former was the fuel and the latter the nitro, because global assets went on a drag race today.

When the US-Iran war began at the end of February, Crude Oil exploded and with it, brought its waves of panic across all classes. The panic stemmed from fears of inflationary booms and supply droughts, which brought with them repricing of rate hikes by Global Central Banks, hikes that were priced to be delivered during this pivotal week.

But the reality came as a boon for sentiment, with zero rate hikes and communications that were much closer to hesitation than to decision. While this doesn’t necessarily mean that rate hikes are a thing of the past, the pauses at least allowed for a temporary Market celebration.

The US Dollar took a hit today, allowing Metals, Stock Markets (particularly the Dow Jones), and other currencies to take a breather.

The FX intervention from Japan’s Ministry of Finance probably played a role in the Dollar selloff, but it certainly wasn’t the only catalyst.

Overnight, Crude prices bounced to new highs (for Brent, levels not seen since 2022) and very close to $120 for WTI. Luckily, this bounce did not last, as Energy commodities continue to trade in confusion.

Physical Markets are still under heavy pressure, but Futures and other Market pricing tools continue to fade with every extreme move – A catastrophe incoming or the sign of exhausted traders?

This is a question that will find its answer promptly – One that will either make or break Markets.

What is certain, at least, is that the Strait of Hormuz is still not open, and that Iran wants the US to lift the damaging blockade before heading to the next round of talks. The Deadlock persists in the meantime.