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Good morning, friends. Let’s take a quick look at the most important news in the market right now and the news worth paying attention to today.
First of all, the most important news at the moment is the report published by Axios, which stated that the United States and Iran have reached a preliminary agreement on a 60-day truce. But the final decision still awaits Trump’s personal approval, according to the same source.
Frankly, if we know anything about Trump’s approach to political filings, any major announcements – whether approving or rejecting a deal – are likely to come over the weekend, as he generally doesn’t like to release sensitive decisions to the market during the trading day.
But at the same time, we shouldn’t be too quick to make headlines. Because a lot of these negotiations also depend on media leaks and press pressure attempts. We know that figures like Jared Kushner, who is very close to Trump, sometimes use the media as a tool to influence negotiations and create certain public opinion.
So nothing is official or final as of yet. Over the past few months we have heard many times that “a deal is very close” but that is not the case. That’s why it’s better to wait for actual action rather than rely solely on statements.
In particular, the Strait of Hormuz is actually still tense. Indeed, about 10 ships passed through the strait on Wednesday, which is a good number compared with previous months, but yesterday Iranian forces attacked four ships trying to cross the strait.
This means that despite a lot of positive news, the situation remains sensitive and the risks have not gone away.
As for the US economic data released yesterday, most of them were weaker than expected.
US GDP grew by 1.6%, lower than expected.
Jobless claims were also higher than expected.
As for personal spending and inflation data, they were stable at 4.5%.
The problem here isn’t just expectations, it’s the numbers themselves. Because 4.5% is considered a very high level and a clear indication that a new wave of inflation may begin. Especially since the numbers about a month ago were much lower.
In other words, the U.S. economy is starting to calm down, but inflation is rising again, which is not a comforting sign for markets.
Additionally, U.S. oil inventories are still falling, although this time the decline is smaller than last week. The United States still consumes and exports more oil than it adds to its inventories.
This is relatively normal as we are currently seeing a significant increase in U.S. oil exports to Asia, particularly Japan and South Korea.
Apart from the Iran and US issues, what is happening in India is also important news.
The Reserve Bank of India intervened in currency markets last night and started selling dollars from its reserves to support the Indian rupee. After the intervention, the value of the rupee rose sharply.
But typically after any such intervention, we see a subsequent correction in the market because the movement is artificial and not the result of natural market demand.
So if you’re looking at the Indian rupee, it’s best to err on the side of caution now. Perhaps after the intervention effect ends, there will be a good opportunity for reverse correction trading.
As for today, the most important economic event will be Canadian GDP data, which will be released ahead of our second meeting. Therefore, it is best to trade the Canadian dollar away from news periods to avoid sudden fluctuations.
The rest of the day should be relatively quiet, so we go about our business as usual and just keep an eye on any new news that may come out during the day.
Have a nice day and see you at the conference.