The triumph of the optimists

Daily update

Markets' optimism bias has been revived, with news that the Iranian government has been granted powers to negotiate with the US. The US midterms are a complication; but on the assumption that some in the administration might attempt a post-2028 political career, a US attempt to tackle the affordability crisis seems warranted.
The optimism comes despite reports of limited US attacks on Iran overnight. Investors seem prepared to reduce the risk premium in oil, but of course the fundamentals of supply and demand have not yet changed. There is a limit to how low oil prices can go if the price mechanism is still required as a rationing tool.
There is a pontification of European Central Bank speakers scheduled, but none seem front-runners in the horse-trading for Lagarde's position as ECB president. The Reserve Bank of Australia raised interest rates by a quarter point in an expected move, albeit with dovish overtones.
The data calendar contains some US labor market information that is sadly lacking in reliability and credibility. Job openings figures would be useful information if only the figures could be believed. There are durable and capital goods orders figures too. It is worth remembering how much of the AI story is imported.