Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
PODÍL
The gap between Brent Crude and West Texas Intermediate has suddenly collapsed. Seaborne oil contracts hit highs of $118 yesterday but have since fallen to just $100 per barrel as of this morning, compared to prices of around $97 per barrel for WTI. The abrupt correction follows comments from President Trump on Tuesday suggesting that hostilities between Iran and the US may indeed be drawing to a close. The remarks match those delivered by Iranian President Masoud Pezeshkian to the EU yesterday, in which the leader stated his country had the “necessary will to end this conflict, provided that essential conditions are met”. Over the last five weeks, the spread between the two benchmarks has served as a general marker for the severity of the ongoing conflict in Iran; the fact that the war premium has all but vanished is significant.
Yesterday marked the end of Q1, so it was as good a time as any for US stocks to rally, and rally they did. In one of the most upbeat trading days of the year so far, the Dow Jones gained over a thousand points on Tuesday, gaining 2.5% over the course of the day; the S&P 500 and Nasdaq Composite meanwhile rose 2.9% and 3.8% respectively. It was a brutal quarter for all three indices, but yesterday’s performance considerably softened the blow. The jubilation carried over into Asian stock markets this morning, with the Nikkei 225 rising 4.5% and the Korean Kospi index surging over 7% by lunchtime. No new developments have yet emerged to contradict recent positive developments and US futures remain cautiously in the green as a result.
In another sign that escalation in the Middle East may have halted, precious metals enjoyed their best day in weeks on Tuesday. Gold gained over $150 to reach $4,668 per ounce, while silver managed to reclaim $75 after a 7% rally. While gold prices are still more than 10% below pre-conflict levels, and silver is closer to 20% down over the same period, both metals have finally established a degree of positive momentum upon which to build. Over in the foreign exchange markets, the dollar made a significant step down from recent highs yesterday, pulling the DXY back below 100 and giving major currencies some long-awaited breathing room. The Korean won spiked all the way to 1,530 for a brief moment yesterday, representing a 6.5% depreciation against the dollar in March, before the Korean government passed a currency stabilisation bill which was able to lift the won back to more reasonable levels. The yen has similarly come down from recent highs, falling back under 159 yen per dollar last night. Finally, cryptocurrencies continue to exhibit a shocking lack of interest in international affairs, with Bitcoin remaining around $68,000 per coin at the time of writing. An April Fool’s joke perhaps.
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