Headlines:
- Geopolitics in focus in the second half of the week
- Oil prices surge amid US-Iran war risks: a conflict could trigger a massive spike
- Renewed US-Iran tensions lift gold prices as traders hedge into the weekend risk
- Trump reportedly mulls shaking up North American trade pact, leaving Canada on the outs
- Foreign holdings of US Treasuries cool slightly after peaking in November
- ECB Lagarde reportedly told colleagues that she remains focused on her job
- BoE's Mann: The unemployment rate has gone up and that's very much of a concern
Markets:
- US dollar steady, hold more mixed in general
- JPY leads, GBP lags on the day
- WTI crude oil up 1.6% to $66.01, near three-week highs
- Gold up 0.1% to $4,983, silver up 0.5% to $77.57 (both off early highs though)
- European indices lower across the board, S&P 500 futures down 0.3%
- US 10-year yields up 1.3 bps to 4.094%
- Bitcoin up 0.3% to $66,510
It was a slower session but one with more caution more than anything else. All eyes are now shifting towards geopolitical risks ahead of the weekend, with US and Iran tensions escalating. Reports are saying that a strike by the US is imminent, with the wait only being for the green light from Trump himself.
That is keeping oil prices underpinned, with WTI crude racing up to $66 and near three-week highs today. Besides that, precious metals were also more bid but are still facing some selling pressures in general. Gold touched a high of $5,021 earlier in the day before retreating back under the $5,000 mark to $4,983 currently. Silver is also posting slight gains of 0.5% to $77.57 now after coming off earlier highs of $79.49.
In the major currencies space, the dollar is keeping steadier but a bit more mixed on the session. EUR/USD is flat around 1.1780 amid a lack of appetite, with large option expiries capping gains closer to 1.1800. Meanwhile, GBP/USD is down 0.2% to 1.3463 with USD/CHF up 0.2% to 0.7740 on the day.
USD/JPY was a decent mover, keeping around the 155.00 level earlier before some selling pressures hit to drag the pair down to around 154.60 on the day.
In other markets, equities are holding a more cautious tone with one eye on geopolitical risks surely. European indices are down across the board, marking a bit of a setback in the early week momentum targeting fresh record highs. Meanwhile, US futures are also looking sluggish with S&P 500 futures down 0.3%. Walmart earnings saw a modest quarterly beat but it's still not enough to lift sentiment for now as the macro landscape is one to pay attention to before the weekend.
Coming up, we do have the US weekly jobless claims data on the agenda. But all else being equal, broader market sentiment is going to be looking to US-Iran tensions to see how that plays out in ending the week.
