Traders just got back on the risk-off schedule after this morning’s turn in narrative regarding the Middle East.
Just yesterday, it seemed that communications were heading towards further confidence in a Nuclear deal between the US and Iran.
But as was expressed by US Secretary of State Marco Rubio, “It’s been very difficult for anyone to do real deals with Iran”, so the recent turn is not that big of a surprise.
Commodities and Markets will tend to play tricks on traders, and overall yesterday’s turn really did look like things were heading towards a more peaceful resolution – But price action can never be straightforward, or else, it would be too easy.
It seems that yesterday really was the calm before the storm.
Oil dipped close to $62 in yesterday’s session before rallying 5%, back above $65 in today’s action. Metals also rebounded swiftly, however their price action remains contained.
With Gold investors being heavily positioned, traders could find interest in Platinum which could offer similar views with less participants already in the trade if anything happens.
Apart from these themes, the FOMC released surprisingly hawkish minutes, which led to the US Dollar outperforming FX Majors and Stocks correcting, with the latter finding heavier pressure from the turn in sentiment.
January FOMC Minutes and Wartime – North American Mid-Week Market update
Stock indexes still performed well today despite the concerning themes, with a particular appetite towards Europe. Keep a close eye on upcoming geopolitical developments.
