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Good morning friends! Let’s take a quick look at what happened in the past 24 hours, as the situation becomes more complex but at the same time becomes clearer in some respects.
Let’s start with geopolitics. On the one hand, there is news that Iran is seeing signs that the United States may lift the blockade. On the other hand, in completely opposite speeches: the blockade remains the main tool of pressure, without which there is no deal and therefore will not be lifted at least until negotiations begin.
As for the subject of negotiations itself, it has become almost comical. The United States is still awaiting Iran’s decision. On this basis, they extended the ceasefire, and Trump issued a long article explaining why. But on the other hand, Iran made it clear that it would not recognize the extension.
This means that Iran leaves itself room for maneuver and even the possibility of military escalation. According to the latest news, they have refused to go to negotiate, and Vance has also canceled his visit. But, as you know, this can all change at any time.
The important point here is this: Iran is divided within itself. These words were even spoken publicly by U.S. officials. This explains why the situation changes hourly. While one part of the elite wants a deal, another part – especially the Revolutionary Guards – is pushing for a more extreme scenario.
The Revolutionary Guards do not recognize the blockade and have no intention of opening the Strait of Hormuz. Instead, it said force could be used to break the blockade if necessary. Not only that, they have also begun to threaten the Gulf countries: any party that helps the United States may lose its oil production facilities. This is direct and clear.
In contrast, the United States does not seem to be truly seeking peace. This situation is closer to the policy of buying time – waiting for reinforcements including aircraft carrier groups. An extension of “peace” therefore seems more like a pause before new escalatory steps.
The market is starting to realize this. Apparently, it has begun considering the possibility of a new round of upgrades. Oil prices tested the 100-101 mark yesterday and then fell back, but the overall trend returned to the upward trend. This means that the market is actually preparing for a new phase of tension.
Even at the highest levels, the same idea exists. The Goldman Sachs CEO said that the normal range for oil prices is between 80 and 100, but if the situation escalates, we may see a peak of 150 or even 170. That means those expectations are creeping in.
Now let’s move on to the macro. In the UK, inflation data was released, and we saw a slight increase, but it was still above 3%. This suggests that inflationary pressures have not disappeared.
Things are better in the U.S.: retail sales are strong, the housing market is improving, and the Nasdaq is at a record high. This means the stock market is acting as if “all is well” and the overall economy remains strong.
But globally, we are now somewhere between two scenarios. First: Make a deal – we may see lower oil prices and market relief. Second: the consensus reached by both parties – the escalation of the situation, the sharp rise in oil prices and the pressure on the global economy.
The problem is that it’s unclear which scenario will come true. Even within Iran there is no unified position, and for the United States, the situation is unclear. The market is now waiting for a catalyst.
Once any clarity emerges – whether there is a deal or eventual failure – the movement will be very strong.
By the way, the ceasefire officially ends today. The United States extended the deadline, but Iran did not. But as you know, everything can change in an hour.
Overall, we are monitoring developments closely. I will share all updates with you on the channel.
Have a great day and profitable trading 👍
