It would have been unrealistic to assume that a bottom has been reached without a significant advancement in the war.
Today, sentiment took a downturn as President Trump shifted his rhetoric, becoming more aggressive in response to Iran, which has, until now, refused to make concessions for a longer peace deal.
In an address at the White House during the midday session, the Commander in Chief of the U.S. Army revealed that their enemy counterpart had offered substantial gifts, including a fleet of ten tankers, to facilitate the ongoing indirect negotiations in Pakistan.
The issue is that the Islamic Revolutionary Guard Corps (IRGC) is unwilling to compromise on its control of the Strait of Hormuz and its highly valued, albeit dangerous, ballistic missile program.
Although Israel has begun to realize that the U.S. is prepared to conclude the conflict sooner rather than later, it is still too early to say whether a deal will be reached before the 5-day deadline (which ends on Saturday).
Therefore, the possibility of a ground invasion remains a consideration, as a heavy Marine fleet is expected to arrive in the Arabian Sea within the next 24 hours.
A recent report from the Wall Street Journal suggesting that the war may end sooner than anticipated has not been enough to invigorate market sentiment. Investors are increasingly concerned about potential escalation before any resolution.
Virtually all asset classes are experiencing the impact of the uncertain market conditions, with metals down an average of 4% across the asset class, along with declines in cryptocurrencies, stocks, and bonds. Hope alone cannot do much to alleviate such an uncertain market environment.
Tomorrow’s weekly close will be crucial in this regard.
Any positive developments ahead of the weekend could lead to a significant rebound in global assets – This would first be observed in Crypto Markets (which remain open 24/7).
Additionally, inflation expectations, which will be released tomorrow at 10:00 A.M. ET, will need to be monitored closely.
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