The big story of last night is the decline in tensions between the US and Iran after Trump chose the path of de-escalation in response to missile attacks by Iran.
As a result, risky assets are the big winners of the situation, while gold and oil are losing ground. Currently, markets remain calm, with no major changes in major currencies early in the day.>
The immediate threat of escalation in tension will be left slightly less in the background and the focus will go back to the foundations – global growth, a new decade and so on. But don’t confuse things – the saga between the two sides will continue.
Looking ahead, I expect markets to remain calm and investors look for optimism to support their long index positions, which nevertheless continue to form new record highs.
For me, the situation will remain unchanged, with greed taking over and keeping the indexes in the air until at least the key reading on US employment tomorrow.
But of course investors will be on the alert – any escalation in rhetoric will result in a cash flow allocation to safe haven assets at the expense of risky stocks.
Trader Aleksandar Kumanov