Headlines:
Markets:
- WTI crude oil up 2.4% to $86.04, Brent crude oil up 2.3% to $90.53
- AUD leads, JPY lags on the day
- European indices lower; S&P 500 futures flat
- 10-year Treasury yields up 3 bps to 4.17%
- Gold down 0.1% to $5,188, Silver down 1.9% to $86.75
- Bitcoin down 1.1% to $69,488
It was a more tentative session for once as the Middle East conflict continues to rage on. Markets carried on by tuning out the mess of headlines from the US overnight, as Washington gave arguably deceitful and mixed messages on the situation in the Strait of Hormuz.
The fact remains that the passage is in de facto closure with more vessels being struck again today along the strait. As such, it is keeping oil prices on edge as traders are awaiting the announcement by the IEA on its strategic oil reserves release. Germany has confirmed that the announcement will involve 400 million barrels by IEA members but the details are yet to be finalised.
WTI crude oil slowly regained composure from $83 levels in Asia to a high of $89 during the session. That before settling around $86 levels now as we get closer to the announcement.
In other markets, the US dollar is keeping steadier and more mixed as oil price volatility also settles down for a bit. EUR/USD is down just 0.1% to 1.1603 while USD/JPY is up 0.2% to 158.30 on the day. The Australian dollar is the lead gainer, with AUD/USD up 0.6% to 0.7165 but off earlier highs as traders rush to price in a rate hike by the RBA for next week.
Looking to stocks, major indices in Europe are holding more nervous with the DAX down 1% and CAC 40 down by 0.4%. US futures are also on edge with S&P 500 futures trading flat, also having to consider the US CPI release later in the day. The inflation data is likely going to be an afterthought though since we eventually have to factor in the events from the US-Iran conflict to prices in the months ahead.
Besides that, precious metals are keeping just a little lower with gold down 0.1% to $5,188 and silver down 1.9% to $86.75 currently. As for the bond market, it’s still all about pricing in inflation concerns more than anything else. 10-year Treasury yields are once again up 3 bps to 4.17% as the slow grind higher continues.
It’s all on watching for the IEA announcement next, with it to come at 1300 GMT. That before the G7 leaders’ meeting at 1400 GMT.
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