Trump: He thought impact of Iran would be worse, will be over with soonNetanyahu: Won’t put a stopwatch, but it will end much sooner than people thinkBOE leaves bank rate unchanged at 3.75% in March meeting decisionECB leaves rates unchanged as expectedUS initial jobless claims 205K versus 215K estimateUS new-home sales for January 0.587 million versus 0.720 million estimateECB officials see the possibility of rate hikes at the April meeting, June more likelyUS won’t implement a crude export ban – reportECB scenarios highlight a disasterous inflation scenario if 60% of Hormuz flows blockedECB’s Lagarde: Risks to the growth outlook are tilted to the downsideUS wholesale inventories for January -0.5% versus 0.2% estimate.QatarEnergy provides a damage assessment on the facilities hit yesterdayBessent: We will get the results of the tariff investigations in JulyUS March Philly Fed business index +18.1 vs +10.0 expected
Markets:
WTI crude oil down $1.01 to $94.45Brent crude up 30-cents to $107.86 after touching $119.13Gold down $159 to $4658US 10-year yields flat at 4.25%JPY leads, CAD lagsS&P 500 down 18 points to 6606
It was a wild day in markets, one of the craziest ones yet since the war.
What changed it up today was the addition of fears of central banks hikes. The Fed yesterday followed by the BOE and ECB today got the market thinking about rate hikes and that led to a puke of just about everything early in the day. European stock markets were hit hard, falling 2-3% while bond yields spiked, including a 30 bps rise in UK 2 year notes.
In the US, it was a lesser version of the same early in the day but eyes were focused on oil where brent challenged $120.
Then it turned. The first change was in the US dollar as it started to fall and ultimately posted some of its largest one-day losses since August. We also saw gold bounce after falling to $4500 and silver falling to $65.55 then rebounding to $72.67.
Eyes were on Trump and he reiterated that he wants to avoid energy attacks. Later, Netanyahu said Israel acted alone in striking Iran’s gas facilities and that Trump had asked him to stop. He also said the war will be over sooner than people expect, but he also noted the possible use of ground forces, something a US poll showed was extremely unpopular.
Europe and Japan seem to be coming around on the idea of helping with Hormuz but it’s not clear in what capacity, perhaps more peacekeeping than warmaking but time will tell. I noted that the Fear & Greed index is now deep into “extreme fear” and the price action today looked like a washout but people are still struggling to see a clean end to this conflict. For his part, Trump sounded comfortable today.
Every moment can be a game changer but the price action in the latter half of US trading was promising and it was clear that central bankers are loathe to hike rates.
Eyes will remain on the headlines.
This article was written by Adam Button at investinglive.com.