Conflicting peace narratives ahead of April labor data – North American Mid-Week Market Update

However, the diplomatic road remains somewhat unclear; there is still significant back-and-forth.

Iranian officials dismissed some proposed US terms as an “American wish,” and President Trump sought to temper immediate expectations for peace – A confusion that caused stocks to give up a portion of their early Wednesday pre-trading gains, keeping traders on their toes ahead of the gigantic labor market report (US NFP) coming up on Friday.

Stepping back, the overarching picture is surprisingly confirming to be bullish.

Stock markets have already surged between 10% and 20% from their war lows, more than erasing the entirety of their conflict-driven losses.

A massive wave of record corporate earnings acted as a major upside surprise. Combined with aggressive short-covering and a highly resilient US economy that has sustained the geopolitical shock exceptionally well, market bulls found everything they needed to keep pushing equities higher.

Traders are also getting prepared for next week’s much anticipated Trump-Xi meeting; a boon for Market sentiment as the war situation shouldn’t get much worse before the event.

Meanwhile, the US Dollar’s trajectory tells the story of fading fear.

After attempting a technical bounce from a recent double-bottom formation, the rapidly easing geopolitical narrative forced the reserve currency to capitulate, ultimately sinking to fresh two-month lows as the global risk-on trade dominates.

The data released throughout the past week continues to show a healthy economy, between still growing PMIs and Job openings slightly beating expectations – Consumer confidence is slowly recovering despite the rising Petrol prices, as the demand side seems to slowly accept the waves of inflation; not a good sign for Monetary policymakers.