Global markets fluctuated after US President Donald Trump called for a withdrawal from Iran. Investors weighed the situation between Israel and Iran. His remarks contrasted sharply with earlier optimism that the situation would not escalate into a broader conflict.
U.S. futures fell 0.4% and gold prices rose after Trump made social media remarks during the G7 leaders’ summit in Alberta. Oil prices fluctuated between gains and losses. It is not clear what he was referring to, but a few hours earlier, Trump had said that Iran wanted to reach an agreement.
On Monday, risk appetite returned to Wall Street, pushing the S&P 500 index up by about 1% to above 6,000 points. Asian stock markets also rose, with gains in Japan, Taiwan and South Korea.
Billy Leung, senior investment strategist at Global X ETFs, said: “The overall performance of the Middle East situation recently has been firm, which indicates that the market understands that past events are usually controllable and short-lived. The performance of other asset classes after similar events is not consistent, except for gold.”
There are signs that investors will maintain confidence in the US economy, but the picture is mixed. Although the $13 billion 20-year Treasury bond auction reached the expected yield level, long-term US Treasuries still lagged behind the market – a marked improvement from last month’s disappointing auction results that triggered widespread selling. The US dollar was largely unchanged.
Earlier, Trump said that despite the fact that the two sides have been exchanging fire for the fourth consecutive day, Iran still hopes to negotiate to ease the conflict with Israel. When asked whether the US would further intervene in the military operation, the US leader said he did not want to discuss the matter. However, according to the White House, he will cut short his trip to the G7 summit and return to Washington.
Hostilities between Israel and Iran disrupted the momentum that had been pushing the S&P 500 index back to its historical high. Although the market initially adopted a cautious and risk-averse stance to assess the aftermath of the conflict, sentiment improved as investors speculated that the attack was unlikely to prompt further actions from other parties involved.
Tom Esser of The Sevens Report said, “People’s attention will still be focused on geopolitical news, but as long as the conflict between Israel and Iran remains limited, it is unlikely to have a substantial impact on the market.”
The WTI crude oil price dropped below $70 per barrel on Monday evening, but rebounded to around $72 per barrel on Tuesday. About one-fifth of the world’s daily oil production is transported through this narrow waterway by Middle Eastern oil-producing countries. If Iran attempts to block the transportation on this route, oil prices could soar.
Morgan Stanley economist Chetan Ahya wrote in a report on Monday: “Oil prices have soared due to supply concerns, but given that the oil burden is lower than before and inflation is moderate, the impact on Asia should be manageable. ” “However, if oil prices rise further above $85 per barrel and the US dollar continues to strengthen, it could lead to a delay in interest rate cuts.”
Technical analysis:
Gold: The price tested two yellow zones downward and then rebounded. After recovering 3387, it continued to rise to around 3400. For today, we suggest waiting for the resistance area of 3405/10 to be reclaimed before considering the signal of momentum breakthrough; or waiting for the liquidity below 3380 to be touched before looking for a rebound to do so. For detailed positions, please consult the plugin.
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Nasdaq: Yesterday, the price continued to sweep through the liquidity above the yellow line. However, the upward space was slightly larger compared to the previous few trading days. Our operation strategy remains unchanged. We will wait for the price to break below the area where it started to rise yesterday and then look for a new supply zone to short. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and note “666” in the message.
Crude oil: The green zone signal from the plugin yesterday did not perform well. However, after that, the yellow zone was equipped for scanning liquidity and the subsequent rebound was executed, achieving a profit-to-loss ratio of over 2 times. Moreover, if the price recovers further to the 73.50/74 area within the day, it may move above the 75 level. In terms of operation, it is recommended to maintain the yellow low long position from yesterday and take some profit protection. Subsequently, pay attention to the momentum signal above 74 and supplement with short-term long positions. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Today’s key financial data and events to focus on:
17:00 Germany June ZEW Economic Sentiment Index
20:30 US May Retail Sales (MoM)
21:15 US Industrial Production for May (MoM)
22:00 US June NAHB Housing Market Index
