President Trump announces he postponed "scheduled attack" on Iran today for a few days to give a peace deal a chance.
The major news story continues to be the ongoing was between Iran and the USA with the ceasefire hanging by a thread. President Trump dramatically announced late yesterday that he was postponing an attack on Iran which had been scheduled to happen today for two to three days to give Iran a chance to agree to a deal. Markets reacted immediately with an improvement in risk assets, notably US equities, but as markets began to digest this statement also implied the attack will happen this weekend if a deal is not agreed, risk assets again sold off a little. President Trump has been making threats for several weeks now but has not followed through on them. I believe there is no chance of Iran agreeing to a deal which Trump could find acceptable, so I expect the war to resume this weekend. The questions are whether Trump will again refrain from following through with his threats, or whether the strikes will be limited or a full-scale resumption of the war. In the latter case, equities will probably open Monday sharply lower and Crude Oil and Gasoline sharply higher.
The prices of
Crude Oiland Gasoline initially eased on Trump's announcement, and US equities rose, but both have eased off and are trading sideways. These markets are waiting to see either a deal or war for direction.
Generally high yields remain a big factor in market sentiment, weighing upon equities, as central banks react to sticky and growing levels of inflation. The 10-Year US Treasury Yield is near its 2007 high, and US yields in general are near their highs. Trend traders will certainly want to be long of the US 2-Year and 10-Year Treasury Yield futures, which are available as a very affordable micro future on the CME. Rate yield instruments have a great historical record for trend followers over recent decades.
In the Forex market, the US Dollar is rising again after falling yesterday.
The USD/JPY currency pairis continuing to rise as it has been for several days and is now trading above ¥159. Since the Tokyo open, the strongest major currency has been the Euro, while the weakest has been the Australian Dollar.
- Gold
remains near the 1.5-month low price it made yesterday, and it still looks bearish.
- The USD/INR currency pair
looks bullish in early price action and is not far off its all-time high. There are several factors contributing to the long-term weakness of the Indian Rupee, and trend traders might want to bet on this, unless they think the Reserve Bank of India will find some way to intervene successfully.
Bitcoin may be finding some support above $75,000 after trading consistently lower since breaking down from its ascending price channel on Wednesday last week.
There will be a release of Canadian CPI (inflation) data today, which is expected to show a month-on-month increase of 0.7%.
There was a release of UK Claimant Count Change data (unemployment claims) earlier today which approximately met expectations.
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