President Trump has said he expects to reach a peace deal with Iran within the next week, sending energies lower and stocks higher.
- The major news item moving the market today is President Trump's announcement that the USA and Iran are "very close" to a deal to end the war in which Iran would give up its enriched uranium. Trump has threatened to resume the war if Iran does not agree to the deal within a one-week deadline, which presumably is Wednesday 13th May. Trump is stating that any deal will have to provide for an Iranian handover of all its enriched uranium and heavy restrictions at least on any kind of future uranium enrichment, at least for a number of years. Iran says it is evaluating the US proposal and also has proposals of its own.
- The prediction site Polymarket expects a peace deal to be agreed in July but does not expect Iran will hand over enriched uranium by the end of 2026, which is an interesting dichotomy. It seems the market is now expecting Trump will agree to a "bad deal". This is one reason why I think the market has misread events and we could see a major turnaround later if Trump finally loses patience and reverts back to a forcible approach. My take is that Iran will continue refusing to hand over its enriched uranium, and I don't see Trump accepting any other deal, so I expect renewed conflict, unless Trump is so hamstrung politically that he cannot make that happen.
- News about the deal sent Crude Oil and Gasoline futures sharply lower, while stock markets rose, especially in the USA where the S&P 500 Index and the NASDAQ 100 Index rose strongly, and in Korea the KOSPI Composite also powered to a new high. Trading in Japan today has seen the Nikkei 225 Index rise by almost 5% to reach a new all-time high. Trend traders will be interested in being long of all three indices right now. If the futures are too big for you and you want exposure, consider ETFs, even the ones that don't specifically track the indices but track the country's large cap market, which should be able to do the job.
- Bitcoin is behaving in a muted way considering stocks have been rising powerfully. Some traders will be long here. I prefer to wait for 6-month highs, which in the case of Bitcoin right now is a lever just below $100,000 which is still quite far away.
- In the Forex market, the strongest major currency since the Tokyo open was the Australian Dollar, while the Swiss Franc has been the weakest. There will be focus today on the AUD/USD currency pair, which has risen strongly to reach a new 3-year high price. The USD/JPY currency pair reached a new 2-month low earlier as Japan's Mimura stated he was "closely watching" the Yen's fluctuations, then rebounded off the long-term supportive trend line near 156, supporting the price.
- There are no potentially high-impact data releases scheduled today, so the USA / Iran interaction and any news or rumours there will likely be the events to watch out for today.