Despite US president Trump saying that the ceasefire deal is “over”, things have not gone up in flames just yet. The US and Iran are still exchanging strikes but neither side appears to be very interested to take a step further to escalate things to a point where we see a complete reset on relations.
That is not to say the current situation is not bad though. It is that things can still get worse, should either side decide to escalate things from a military standpoint. One encouraging headline from earlier is that a US official is claiming that nuclear/uranium talks may still proceed accordingly.
For now though, the Strait of Hormuz is pretty much in de facto closure again as ship traffic grinds to a standstill. Meanwhile, both sides appear to be disinterested to resume negotiations but at the same time reluctant to escalate things from a war perspective. So, the limbo is pretty much keeping markets in check.
Traders and investors will continue to hope for things to take a turn for the better. And in a time like this, a quieter period might be better as it means less likelihood of both sides squabbling and exchanging more volleys again. But as mentioned, tensions remain high and things can easily switch back on at any time.
Oil prices look set to snap four straight weeks of losses with WTI crude up 0.6% to $72.50 today. The gains this week are bordering on 6% despite the retreat overnight.
Meanwhile, US stocks kept with a more solid rebound yesterday as tech shares lead the bounce this week. The S&P 500 is now up 0.8% and Nasdaq up 1.4% this week, as investors hope to recover some poise in July after a rather poor June showing. The mood music in US futures now is looking more pensive though with S&P 500 futures now down 0.1% and Nasdaq futures down 0.2% today ahead of European morning trade.
Elsewhere, the dollar is also slightly lower with USD/JPY a notable mover – being down 0.5% to 161.60. That follows from some remarks by Japan finance minister Katayama earlier here.
This article was written by fl9bde53b91e184082bbe3aa3acaaf2cb0 at investinglive.com.