Markets are pricing in a probable strike on Iran by the USA within the next few days, giving crude oil a headwind.
- The major news item is speculation over an impending US strike on Iran. The Iranian internet blackout continues for another day and the uprising continues. The Iranian authorities have admitted 3,000 dead while foreign intelligence agencies tend to put the death toll at 10,000 or higher. President Trump repeated a commitment yesterday that he would do something to help the uprising, and markets are now pricing in a probable US strike will happen within the next week. The weekend tends to be a favourite time for the USA to launch any military action as markets are closed - I think we will see something happen early Saturday morning in Iran, though exactly what form an attack might take is unclear. Polymarket currently shows a 55% chance of a strike within the week and a 73% chance of a strike by the end of March.
- WTI Crude Oilrose strongly yesterday, on increasing expectations of a US strike, reaching a new 2-month high at $61.50. If a US attack on Iran happens, it will likely go even higher, if the situation doesn't de-escalate by the next market open.
- The release yesterday of US CPI (inflation) data showed no change, with an annualized rate of 2.7%. There was no surprise and no major affect on markets here.
- Markets continue to be dominated by precious metals, although its only the two major precious metals that are really doing anything interesting.
- Gold - peaked at $4,639 (a record high) and is now trading right at its high, showing bullish momentum. I am long of Gold and most trend traders will be also.
- Silver - peaked at $91.57 (a record high) and is now trading 3.75% higher on the day. I am long of Silver and most trend traders will be also. This is really the standout precious metal.
- Stock markets are mostly bullish, with the S&P 500 Index just touching a new record high yesterday just below the huge round number at 7,000. The Index has sold off a bit since then, but still looks bullish, and trend traders will be long here. There was also a new record high today in the MSCI Asian Index, with several Asian equity indices also making new all-time high prices.
- In the Forex market, since today's Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest has been the Japanese Yen, which has fallen to an 18-month low on rumours that a snap general election will be called. The USD/JPY currency pair rose to break well above the ¥159 handle, trading at its highest price since July 2024. I have been long of this currency pair for a while, and trend traders will be too.
- Base Metals Copper and Tin continue to make new record highs, while Aluminum trades close to its recent high with a strong bullish case. A relatively accessible way to trade these industrial metals is to access ETFs such as CPER, TINM, and ALUM (the latter two are non-US and traded on the LSE).. Note that the CME offers a micro Copper future sized at only about $15,000.
- Bitcoin has made a bullish breakout beyond $94,000 to make a new 2-month high. I'm not strongly bullish here but I note its a more bullish sign for Bitcoin.