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.
CHIA SẺ
Negotiations between the United States and Iran collapsed over the weekend, leading President Trump to announce a naval blockade of all maritime traffic entering or exiting Iranian ports. According to a press release from US Central Command, the blockade will not affect vessels transiting the Strait of Hormuz to and from non-Iranian ports, meaning neutral vessels should, in theory, be able to pass through the Persian Gulf unimpeded. The measure is scheduled to take effect at 10am Eastern Time later today, leaving plenty of time for further developments to unfold.
Markets were understandably shaken this morning, causing sizeable gaps in precious metals as trading got underway. Gold opened lower as traders digested the latest events but has since recouped most of the early losses and is currently trading above $4,700 per ounce. Silver is the more fragile among its peers this morning, unable to mount much of a defence and sustaining a 2% loss so far today. Cryptocurrencies also succumbed to the negative sentiment, pushing Bitcoin back down to $70,000 per coin from $73,000 last night. Asian stock markets had a rough start to the session, with the Nikkei 225 and Kospi indices both experiencing minor losses this morning, although the damage appears to be limited for now.
The biggest factor in all of this is of course the oil trade. Despite the ongoing conflict, Iran has continued to export crude oil via more obscure pathways, making use of its shadow fleet of tankers to offload its oil around the world. According to some estimates, these outflows have amounted to around 1.5 million barrels per day on average. If the blockade is successful, these shipments will come to an immediate halt, further reducing global supplies. Oil prices pushed back over $100 this morning, with Brent Crude trading for $102 and WTI selling at a slight premium at $104 per barrel. WTI front-month contracts will roll over to June over the next week, meaning the premium should once again favour Brent Crude over the West Texas benchmark.
A very dull economic calendar this week. Tuesday offers a glimpse into the US economy with the latest PPI reading, which is expected to show a sharp uptick to 1.2% month-over-month in March, but other than that, there is very little going on. The earnings calendar has slightly more to offer, with big banks kicking things off at the start of the week. Goldman Sachs (GS) will report before market open later today, while Tuesday gives the floor to JPMorgan Chase (JPM), Citigroup (C), Well Fargo (WFC) and Blackrock (BLK). Bank of America (BAC) and Morgan Stanley (MS) report on Wednesday, after which attentions will turn towards the chip manufacturing sector. ASML Holdings (ASML) also report on Wednesday, while Taiwan Semiconductor Manufacturing Company are set to publish their latest earnings on Thursday. Until then, any sudden changes surrounding Iran will likely prompt equally sudden changes in market sentiment.
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