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.
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Oil prices are on the rise once again this morning following President Trump’s swift rejection of Iran’s latest peace deal. The proposal, submitted to the United States on Sunday, reportedly demanded Iranian management of the Strait of Hormuz, a measure that is completely unpalatable to other Gulf states such as Saudi Arabia or the UAE. Trump echoed the same view in a social media post later that day, saying the deal was “totally unacceptable”. The rapid dismissal suggests the two sides are far from finding common ground on which to negotiate an end to hostilities. While traffic remains far below pre-conflict levels, an increasing number of “dark” vessels are slipping through the Strait with their transponders turned off, marginally easing the pressure on global oil supplies. Meanwhile, Saudi Arabia’s East-West pipeline is now operating at its maximum capacity of 7 million barrels per day, also helping to alleviate the strain. The Brent Crude benchmark rose to $105 per barrel following the rejection of the proposal, while WTI contracts pushed towards $100. Crude oil aside, wider financial markets have opened timidly so far this morning, with gold staying relatively flat around $4,700 per ounce and silver just managing to edge over $80. Currencies are equally stable, with a slight bias in favour of the dollar. Bitcoin, which enjoyed highs of $82,500 over the weekend, settled down to $80,500 as the week got underway.
Last Friday’s NFP report surprised markets with 115 thousand new jobs, beating estimates of just 62 thousand, while the unemployment rate remained at 4.3%. The data, coupled with strong earnings from US companies over the course of the week, helped push the S&P 500 and Nasdaq Composite to new record highs on Friday, the latter closing above 26,000 for the first time in its history. Japanese and Korean indices also logged record highs last week thanks to an ongoing surge in technology stocks. Samsung alone gained 22% last week amid renewed optimism for the company, although a possible strike, scheduled for later this month, could dent sentiment in the electronics giant.
The US labour market dominated the economic calendar last week, but starting tomorrow attentions will quickly turn to inflation data. Tuesday will see the publication of the latest CPI figures, with the headline number expected to tick up to 3.4%. PPI swiftly follows on Wednesday, completing the picture. UK growth figures and US retail sales are the main events on Thursday, closing out a quiet week. The earnings front is similarly subdued, with Alibaba (BABA) reporting before market open on Wednesday, followed by Cisco Systems (CSCO) after the closing bell. On the political side, traders will be eager to keep an eye on Trump’s visit to China this week, where the President will be joined by a number of high-profile CEOs from the tech and banking sectors. Talks are expected to focus heavily on trade, although Iran will undoubtedly feature on the agenda. In the UK, Prime Minister Starmer is facing mounting pressure to resign following disastrous results in local elections. While the PM has so far shown no intention of stepping down, an unexpected resignation could lead to heavy volatility in the Pound Sterling.
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