A 14-day ceasefire in Iran last week provided much-needed relief to the markets, but the significant question remains whether this will lead to a more lasting de-escalation.
The US Dollar declined following the ceasefire announcement, and this trend might persist if the situation continues to de-escalate. Last week, the DXY index dropped 1.5%, closing at 98.697.
The Euro and the Pound both performed strongly as the Dollar weakened, despite mixed economic data.
Commodity currencies had an impressive week, regaining a significant portion of their losses since the onset of the Iran conflict. The CAD rose by 0.7%, while the NOK, AUD, and NZD all surged by over 2% against the US Dollar. In the broader FX market, the JPY recorded slight gains, and the CHF increased by 1.3%.
Crude Oil prices reversed sharply downward as markets anticipate a gradual normalisation of the supply chain through the Strait of Hormuz. Last week, WTI crude fell nearly 15%, closing at $95.62.
Precious metals performed strongly for the second consecutive week, potentially establishing a solid medium-term bottom. Last week, Gold rallied 1.6% to close at $4,749, while Silver rose 4% to $75.91.
Recommended by LinkedIn
Gold trades at the highest levels since June 2021, VIX…
Dollar Dips, Gold Climbs: What’s Moving the Markets?
Al Fardan Exchange 10 months ago
Currency and Commodity Market Shifts: USD Weakness…
Bonds remained mostly unchanged in what was a particularly quiet week of trading; the yield on the 10-year U.S. Treasury increased by 1 basis point to 4.32%, while the 10-year German Bund decreased slightly by 0.4%, closing at 125.096.
Equities were buoyed by the news of the ceasefire, rallying throughout the week. Although it’s still premature to conclude that the Iran conflict is over, equities are unmistakably showing signs of optimism. Last week, the S&P 500 index surged 4% to 6,824, and the DAX rose 2.8% to end at 23,804 points.
Finally, cryptocurrencies demonstrated some resilience for a change! As of now, Bitcoin and Ethereum have both increased by nearly 10%, reaching $72,800 and $2,240, respectively.
The Week Ahead:
Optimism about the situation in Iran is widespread, yet it may be somewhat premature. The key issue is whether both sides will honour the 14-day ceasefire and what potential outcomes could result from it. There is global hope for a lasting, mutually agreeable resolution.
.Market Commentary: This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument. All market prices, data, and other information are not warranted as complete or accurate and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Coeus Capital. Coeus Capital does not assume any liability whatsoever for the content of this email or make any representations or warranties as to the accuracy and completeness of any information contained in this newsletter.
