Nothing beats an Iran proposal headline right before the opening bell, and stocks surged on Friday with clients being ready for that move before the news hit the wires. Oil also weakened, right on cue, second day in a row after Hegseth testimony and same-day floating of maintaining the Iran blockade.
Markets (and credit markets especially) have been craving and treating the current Mideast setup as one that‘s not to feature return to a shooting war. Trump declared the end of actions before the 60-day window relevant for Congress passed, Iran isn‘t budging in its key demands, and I view the return to kinetic hostilities as woefully underappreciated by markets at the moment (simultaneously, I am on the record for saying to clients that it‘s unlikely to see a flare-up this weekend).
Bond market volatility, credit spreads and the dollar agree with this take, with stocks erring on the side of optimism (not betting on recession even, and treating oil prices as more or less a temporary nuisance, but you can have your say about when we see $3 gas again), and USD didn‘t run anyhow far as a safe haven since the war began, and add now yields grinding higher (defying the unusual level of rate-cutting dissent within FOMC seen on Wednesday) not pushing the dollar anymore, and you get the end of conflict idea the markets are risk-on running on these days.
Comments
Log in or sign up to join the conversation.