Markets take a minor pessimistic turn on the Iran war as Trump's deadline approaches with massive gaps between the parties positions.
- There continues to be a lot of talk about an end to the war in the Middle East. President Trump claims Iran is negotiating eagerly while Iran denies anything but reviewing a written ceasefire proposal. Leaks say that neither side is in the mood to compromise, with Iran unwilling to commit to any real changes in its force projection policies. This weekend will bring Trump's deadline, issued a few days ago, for the Iranian leadership to open the Strait of Hormuz, at the price of having its power plants destroyed by US bombing. There is much speculation that Trump will be eager to bring the war to a close with any kind of plausible deal, but it is hard to see how that happens. Prediction markets such as Polymarket see no ceasefire before May, no cessation of American military operations until the second half of April, and US troops entering Iran on the ground by the end of April.
- The change to a somewhat more pessimistic outlook is having the following effects on certain assets:
- Crude Oil is rising, with WTI approaching a likely pivotal point at $92.50. It might be worthwhile only trading long above that level.
- Gold and Silver are falling, with both assets looking like they have just formed and rejected new key resistance levels not far overhead: $4,596 for Gold, $73.30 for Silver. They can probably fall a little further today.
- The S&P 500 Index is trading lower off-hours this morning, having failed to close above its 200-day simple moving average. Most stock markets are trading at least a little lower today.
- The Forex market had a very quiet Asian session. The USD/JPY currency pair is a little higher, again trading above ¥159.25. Trend traders will still want to be long of this currency pair.
- There will be a release today of US Unemployment Claims data today.