Daily update
Daily update
- The declining number of market traders old enough to remember “The X Files” are muttering “I want to believe”. Markets want to hear good news about the Gulf war; trading negative risks would be very difficult. US President Trump is to speak tonight. This may or may not be useful, depending on whether Trump stays on script. Trump did indicate the US could retreat from the Gulf without a deal with Iran—that shortens the expected war timeline, as requiring a deal would first require direct negotiations, which do not appear to be happening.
- Markets are reassured in their optimism by Iranian comments suggesting a desire to end the war. Iran wants reparations, which the US is unlikely to pay. An Iranian tariff on shipping passing through the Strait of Hormuz might be cast as a reparations—that would raise living costs in the Gulf. The oil price impact would probably not be economically significant.
- US February retail sales data predates Iran war effects, but does show how US consumers are paying for tariffs. This matters because the same mechanism (cutting savings to pay higher prices) is likely to apply to higher gasoline prices, for a time.
- South Korean March export data showed strength, led by record exports of semiconductor demand.