Australian business confidence collapses as energy shock crushes outlook.Earlier:RBA’s Hauser warns of stagflation risk as energy shock hits economy. says not sure interest rates are at the right level to tame inflation, adds rates need to bring inflation to the 2-3% target and that Q2 headline inflation is around 5% due to fuel costsSummary:Business confidence plunges to -29 (from 0 prior). Drops to its lowest since the pandemic. Second largest monthly drop on record Business conditions down to +6 (prior +7) Sales ease slightly (+11 vs +12) Profits fall to +1 (from +4) Cost pressures surge, margins squeezedAustralian business confidence collapsed in March, posting one of the sharpest deteriorations on record as firms reacted to the economic shock stemming from the Iran war and surging energy prices.The NAB Business Confidence Index plunged 29 points to -29 in March, down from 0 in February. The scale of the decline ranks as the second largest monthly fall in the survey’s history, comparable to periods of acute financial stress, and signals a rapid and broad-based deterioration in sentiment across the business sector.In contrast, business conditions held steady at +6, highlighting a growing disconnect between current activity and forward-looking expectations. While firms are still reporting reasonable operating conditions, confidence has collapsed as they brace for a more challenging environment ahead.Underlying details point to mounting cost pressures and margin compression. Sales eased slightly but remained relatively firm at +11, down from +12, while profitability deteriorated more sharply, with the profits index falling to +1 from +4. This suggests businesses are increasingly struggling to absorb rising input costs.Purchase costs surged at a quarterly pace of 3%, driven in part by higher energy prices, but firms appear to be finding it difficult to pass these increases through to consumers. Retail price growth slowed to 0.5% from 0.9%, indicating limited pricing power and intensifying pressure on margins.The backdrop is further complicated by tighter monetary policy, with the RBA having raised rates again in March to 4.1%, alongside expectations that fuel-driven inflation could push headline CPI toward 5% in the second quarter.Taken together, the data paints a stark picture, businesses are still operating at reasonable levels today, but confidence has effectively collapsed as firms anticipate a sharp deterioration in conditions ahead. This article was written by Eamonn Sheridan at investinglive.com.

Its difficult not to read nefarious motives into comments from senior US officials given the stink of insider trading within the administration. Vance says progress made in Iran talks, sees path to broader dealBut, leaving that aside for now, Vance has been a tailwind for risk. This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate.PBOC injects 1bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%. This article was written by Eamonn Sheridan at investinglive.com.

This via a Reuters piece. US-Iran talks end without deal but leave door open for further dialogue.Summary:US-Iran talks end without agreement Sides reportedly “close” before breakdown Key disputes: nuclear programme, Hormuz, sanctions Talks described as tense but ongoing Dialogue continues via intermediaries De-escalation incentives remain for both sidesEarlier:Vance says progress made in Iran talks, sees path to broader dealHigh-level talks between the United States and Iran in Islamabad ended without a breakthrough, but both sides left the door open for continued dialogue, according to multiple sources familiar with the negotiations.The weekend meeting, brokered by Pakistan and marking the first direct engagement at this level in decades, ran for more than 20 hours and at times appeared close to producing a framework agreement. Several sources indicated the sides were “very close” before key sticking points derailed progress late in the discussions.Central disagreements remain entrenched around Iran’s nuclear programme, control of the Strait of Hormuz, and access to frozen assets. The United States is seeking a comprehensive agreement that would eliminate Iran’s ability to develop nuclear weapons, require the transfer of highly enriched uranium, and ensure the full reopening of Hormuz without restrictions. Iran, by contrast, is pushing for sanctions relief, guarantees against future military action, and continued control over its nuclear activities and strategic waterways.The tone of the talks was described as tense and at times confrontational, with participants moving between separate rooms and Pakistani mediators working through the night to keep negotiations on track. While there were moments where the atmosphere improved and even raised the possibility of extending discussions, fundamental differences ultimately proved too significant to bridge.Despite the lack of a deal, engagement between the two sides has continued following the talks, with intermediaries still relaying messages. Both sides appear to have incentives to pursue de-escalation, given the economic and political costs of the conflict.Overall, while the immediate outcome fell short of expectations, the continuation of dialogue suggests diplomacy remains a live pathway. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

MAS tightens policy as imported inflation rises, even as growth outlook softens. An expected move. Summary:MAS tightens via steeper S$NEER appreciation slope No change to band width or centre Inflation forecasts raised to 1.5–2.5% (from 1.0–2.0%) Imported energy costs driving price pressures GDP growth seen slowing in 2026 Q1 GDP 4.6% y/y, but -0.3% q/qThe Monetary Authority of Singapore (MAS) has tightened policy slightly by increasing the rate of appreciation of the S$NEER policy band, signalling a continued focus on containing inflation pressures even as growth momentum slows.The move, implemented without changes to the band’s width or centre, indicates a calibrated tightening stance, with MAS opting to guide a stronger Singapore dollar over time to offset rising imported inflation. This comes as the central bank raised its inflation forecasts, now expecting both core and headline CPI to run between 1.5% and 2.5%, up from the previous 1.0% to 2.0% range.MAS highlighted that imported price pressures are intensifying, particularly from energy. Prices of crude oil, natural gas, and fuel have risen sharply, feeding directly into electricity, transport, and broader consumer costs. The central bank also warned that a wider range of imported goods and services will see price increases in the quarters ahead, with second-round effects expected across retail and non-cooked food categories.Even while tightening policy, MAS acknowledged that growth is set to moderate. GDP is expected to slow through 2026, stepping down from the above-trend pace seen in 2025, while the output gap is projected to narrow toward zero over the course of the year. Flash data showed Q1 GDP growth at 4.6% y/y, slightly below expectations, with a modest contraction on a quarterly basis.External risks remain elevated, with the U.S.-Israel-Iran conflict flagged as a potential drag on activity. MAS noted it stands ready to curb excessive volatility in the currency if needed, underscoring a flexible policy approach.Overall, the decision reflects a balancing act, tightening to contain imported inflation while recognising a softer growth outlook.---The Monetary Authority of Singapore conducts monetary policy by managing the Singapore dollar nominal effective exchange rate (S$NEER), rather than setting interest rates. It does this through a policy band defined by its slope, width, and centre. When MAS increases the rate of appreciation of the S$NEER policy band, it is effectively tightening policy, because it is guiding the Singapore dollar to strengthen more quickly over time. A stronger currency reduces imported inflation by lowering the cost of foreign goods and services, while also tightening overall financial conditions. As a result, an increase in the slope of appreciation is interpreted by markets as a tightening move, typically used when inflation pressures are elevated or expected to rise. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s Katayama outlines global meeting agenda, offers no new policy signals.Summary:Katayama to attend G7, G20, IMF, World Bank meetings Talks to cover financial markets and energy situation Japan signals readiness to support Asian economies Monitoring JGB yields, maintaining market dialogue Monetary policy decisions left to BoJJapan’s Finance Minister Satsuki Katayama outlined her upcoming participation in a series of international meetings in Washington, signalling continued engagement on global financial and economic developments, though her remarks carried little in the way of new policy signals.Katayama confirmed she will attend gatherings of G7 and G20 finance leaders, alongside meetings hosted by the International Monetary Fund and World Bank, beginning April 15. The discussions are expected to focus on key global themes, including financial market conditions and the evolving energy landscape, particularly in light of ongoing geopolitical tensions.She indicated that Japan will use these forums to coordinate closely with international counterparts, with energy market developments and financial stability likely to be central topics. Katayama also noted that Japan stands ready to support Asian economies if needed, suggesting a willingness to contribute to regional stability efforts amid the broader global shock.On domestic matters, Katayama addressed the recent rise in Japanese government bond yields, reiterating that authorities will maintain close communication with market participants. However, she stopped short of signalling any specific intervention measures or policy shifts.She also reinforced the division of responsibilities between fiscal and monetary authorities, stating that decisions regarding monetary policy operations remain firmly within the remit of the Bank of Japan.Overall, the comments were largely procedural, highlighting Japan’s participation in upcoming global discussions and its readiness to engage on key issues, without introducing new guidance on policy direction or market intervention. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Vance says talks made “a lot of progress” U.S. gained insight into Iran’s negotiating stance No deal yet, but framework for “grand deal” exists Iran seen as not fully authorised to agree Hormuz reopening and uranium key U.S. demands Ball now “in Iran’s court”U.S. Vice President JD Vance struck a cautiously optimistic tone on negotiations with Iran, suggesting meaningful progress has been made even as talks have yet to deliver a breakthrough.Speaking in an interview on Fox News, Vance said recent discussions over the weekend were productive, with U.S. officials gaining valuable insight into Iran’s negotiating approach. While the talks did not result in a deal, he emphasised that the outcome was not a failure, noting that Iranian counterparts showed some movement toward U.S. positions, though not enough to finalise an agreement.Vance indicated that the U.S. team ultimately stepped away from the talks after concluding that Iranian negotiators lacked the authority to commit to a binding deal, but he maintained that the broader trajectory remains constructive. He pointed to the potential for a “grand deal,” arguing that the framework for a comprehensive agreement is achievable if Iran is willing to take the next step.The U.S. position remains clear, with Vance reiterating key red lines. These include the full reopening of the Strait of Hormuz to international shipping and the removal of Iran’s highly enriched uranium, with Washington seeking full control over that material to ensure it cannot be used for nuclear weapons development.Looking ahead, Vance stressed that momentum has been established, with the “ball in Iran’s court” to advance negotiations further. He added that progress on reopening Hormuz would be a critical signal of intent, while warning that the course of negotiations could shift if Tehran fails to follow through.Overall, Vance’s remarks suggest the U.S. sees a viable diplomatic path forward, even as tensions remain elevated and key sticking points unresolved. This article was written by Eamonn Sheridan at investinglive.com.

UK retail boosted by Easter, but underlying spending weakens as fuel shock bites.Summary:UK retail sales jump on Easter timing effect BRC like-for-like +3.1% y/y vs +0.7% prior Total sales +3.6% y/y vs +1.1% prior Barclays spending softer at +0.9% vs +1.0% Travel spending drops 3.3% y/y Consumers delaying purchases, building savingsUK consumer data for March painted a mixed picture, with retail sales boosted by seasonal factors while underlying spending remained subdued as higher fuel costs linked to the Middle East conflict weighed on households.Figures from the British Retail Consortium (BRC) showed a notable pickup in retail activity. Like-for-like sales rose 3.1% year-on-year, accelerating sharply from 0.7% in February, while total sales increased 3.6% y/y compared with 1.1% previously. The strength was largely attributed to the earlier timing of Easter, which lifted food sales and supported discretionary categories such as toys, homeware, and electronics.However, the improvement in retail turnover contrasts with softer signals from broader consumer spending data. Barclays reported overall consumer spending growth of just 0.9% y/y in March, slightly down from 1.0% in February, suggesting that momentum in household demand remains fragile.The composition of spending highlights the pressure points. Travel-related expenditure fell 3.3% y/y, marking the first decline since March 2021 during the pandemic. Airlines and travel agents led the drop, reflecting the impact of higher fuel costs and disruption tied to the Iran conflict. Retail data echoed this trend, with travel-related goods also underperforming.Consumer behaviour is shifting more defensively. Surveys show households are increasingly delaying major purchases and building savings buffers amid heightened geopolitical uncertainty and rising living costs. This suggests that while headline retail figures have been flattered by calendar effects, underlying demand is softening.Looking ahead, the divergence between stronger retail sales and weaker overall spending points to a cautious consumer backdrop, with energy-driven cost pressures likely to keep activity muted in the coming months despite pockets of resilience. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Hauser flags stagflation risk as central bank “nightmare” Inflation still too high in Australia Supply capacity described as constrained Energy prices seen as major income shock Focus on preventing rise in inflation expectationsRBA Deputy Governor Andrew Hauser warned that Australia is facing a difficult macroeconomic backdrop, with elevated inflation and constrained supply capacity raising the risk of a stagflation-style scenario if energy shocks persist.Speaking in a fireside chat, Hauser described the central bank’s “nightmare” outcome as one where inflation rises while economic activity weakens, a combination that would complicate policy decisions. He emphasised that inflation in Australia remains too high and that underlying supply constraints continue to limit the economy’s ability to absorb shocks.A key concern is the surge in energy prices linked to the Middle East conflict, which Hauser characterised as a significant income shock for Australia. Higher energy costs are eroding household purchasing power and increasing input costs for businesses, raising questions about how strongly activity may slow in response.At the same time, the RBA is focused on preventing any lift in medium-term inflation expectations, which could entrench price pressures and make inflation more persistent. Hauser’s comments reinforce the bank’s concern that second-round effects, where higher costs feed into wages and broader pricing behaviour, remain a key risk.The combination of constrained supply and elevated inflation leaves the RBA in a challenging position. While rising energy prices are likely to weigh on growth, they also risk keeping inflation higher for longer, limiting the scope for policy easing.Hauser’s remarks align with the broader RBA narrative that inflation remains above target and that policy must stay sufficiently restrictive to ensure expectations remain anchored, even as downside risks to activity begin to build. This article was written by Eamonn Sheridan at investinglive.com.

Earlier here:Top Trump official says gas prices will rise even higher in coming weeksMore detail now. Summary:Oil prices seen peaking in coming weeks Peak tied to resumption of Hormuz shipping Prices likely to rise until flows normalise U.S. blockade adding to near-term disruption Venezuela supply ramp offers partial offsetU.S. Energy Secretary Chris Wright said oil prices are likely to reach their peak within the next few weeks, with the turning point tied directly to the resumption of meaningful shipping flows through the Strait of Hormuz.Speaking at the Semafor World Economy Forum in Washington, Wright indicated that energy prices are likely to remain elevated, and could rise further, until vessel traffic through the critical chokepoint normalises. The Strait, which handles a significant share of global oil and gas flows, has been heavily disrupted since the outbreak of the Iran conflict, with Tehran restricting access to most non-Iranian shipping.Wright’s comments suggest that the market is still in the tightening phase of the shock, with supply constraints continuing to feed into higher prices. He added that the eventual recovery in shipping activity would likely mark the peak in oil prices, pointing to a near-term inflection rather than a prolonged rally.The geopolitical backdrop remains fluid. The U.S. has moved to enforce a maritime blockade extending east of Hormuz into the Gulf of Oman and Arabian Sea after diplomatic efforts to end the conflict broke down. Early ship-tracking data indicates disruption is already materialising, with vessels turning away from the strait as enforcement begins.President Donald Trump acknowledged the domestic implications of elevated energy prices, warning that oil and gasoline costs could remain high through the U.S. midterm election period, highlighting the political sensitivity of the energy shock.Separately, Wright pointed to rising supply from Venezuela as a partial offset. Production has increased notably following political changes earlier this year, with output up around 25% and further expansion expected as foreign investment returns to the sector. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Recession risks seen rising if war persists Global trade growth downgraded to 2–5% Growth driven more by prices than volumes Supply chain risks flagged by majority of exporters Firms adapting via stockpiling and diversification Eurozone downside growth seen near 0.2%Recession risks are expected to become more pronounced later this year (US fall season) if the Middle East conflict continues, according to Allianz Trade’s head of economic research, Ana Boata, who warned that the economic fallout is building steadily as the crisis drags on.Speaking to CNBC on Friday, Boata stressed that timing is critical, noting that each additional week of conflict erodes corporate confidence and increases economic costs. The cumulative effect is already showing up in global trade dynamics, with growth forecasts sharply downgraded. Global trade expansion is now expected to come in between 2% and 5% this year, a significant step down from earlier expectations of around 10%.Crucially, the modest growth that remains is being driven more by rising prices than by increased trade volumes, reflecting the inflationary nature of the current environment rather than genuine demand strength.Supply chain risks remain front and centre, with around 65% of exporters identifying disruptions as a key concern. The conflict is expected to tighten availability across a range of critical inputs, including oil and gas, fertilisers, helium, and aluminium, materials that feed into industries spanning agriculture, advanced technology, and construction.Despite these pressures, companies are not standing still. Firms are actively adapting by front-loading shipments, building inventories, and diversifying supplier networks in an effort to minimise disruption. These responses reflect lessons learned from recent shocks, including the pandemic, the 2022 energy crisis, and escalating trade tensions.In a downside scenario where disruptions persist, Eurozone growth could slow to just 0.2%, while inflation pressures may force central banks to tighten policy further, raising the risk of weaker equity markets—particularly in the United States toward year-end.Asia remains comparatively resilient, with growth in key hubs such as Singapore projected at around 3% to 3.5%, offering some offset to broader global weakness. WWJD? This article was written by Eamonn Sheridan at investinglive.com.

IEA flags readiness for further oil releases as war deepens supply shock.Summary:IEA signals readiness for further oil reserve releases Record 400m barrel release already deployed Additional supply could be mobilised if shock worsens War driving worst-ever global energy disruption Reserve releases seen as stabilisation, not solutionThe International Energy Agency has made clear it is prepared to deploy additional emergency oil reserves if the Middle East conflict continues to disrupt global supply, reinforcing that policymakers are actively preparing for a deeper and more prolonged energy shock.IEA Executive Director Fatih Birol said the agency stands ready to act again if required, following last month’s record-breaking release of 400 million barrels from strategic reserves, the largest coordinated intervention in history. The United States accounted for 172 million barrels from its Strategic Petroleum Reserve. While officials hope further action can be avoided, the message from the IEA is that more supply can and will be mobilised if conditions deteriorate.Birol characterised the current crisis as the worst global energy disruption on record, with more than 80 oil and gas facilities across the Middle East damaged, including production sites, refineries, and export terminals. Crude prices near $100 per barrel reflect persistent concerns around supply tightness and geopolitical risk.However, the IEA chief stressed that reserve releases are not a cure for the disruption. Instead, they are a temporary stabilisation tool, designed to smooth extreme volatility and prevent sharper price spikes as physical supply remains constrained—particularly with the ongoing impact of disruptions around the Strait of Hormuz.Compounding risks, the United States is enforcing a maritime blockade east of Hormuz, which the IEA is actively assessing for its impact on global oil flows.Birol also pointed to the disproportionate impact on vulnerable economies and reiterated that the crisis underscores a critical lesson: energy security now hinges on diversification, across suppliers, fuels, and trade routes, as the world navigates an increasingly fragile supply environment. This article was written by Eamonn Sheridan at investinglive.com.

Miran is speaking soon. He is a political appointee and a motivated speaker for rate cuts. His views are irrelevant and he is ignored by sober members of the FOMC.Chinese trade data the focus otherwise today. China’s export momentum is expected to have eased in March as the boost from AI-driven demand runs into the headwinds of rising geopolitical tensions and higher energy costs linked to the Iran conflict. A Reuters poll forecasts exports grew 8.6% year-on-year in dollar terms, a sharp slowdown from the 21.8% surge seen across January and February.The month represents an early test of whether strong demand for AI-related goods, such as semiconductors and servers, can offset the drag from the global energy shock following Iran’s closure of the Strait of Hormuz, a key artery for roughly 20% of global oil and gas flows. While China entered 2026 with export strength that raised expectations of surpassing last year’s record $1.2 trillion trade surplus, the war has cast doubt on that trajectory.Higher fuel and transport costs are eroding global purchasing power, affecting demand for Chinese goods. However, some analysts suggest Chinese exporters could remain competitive as buyers shift toward lower-cost suppliers. Long-standing stockpiling of commodities may also help cushion input cost pressures.Forecasts for March exports vary widely, with some projecting strong growth near 20% and others expecting a much softer outcome closer to 3%. A high comparison base from last year—when exporters rushed shipments ahead of U.S. tariff changes—may also weigh on the data.Imports are expected to rise 11.2%, down from earlier gains, while the trade surplus is seen narrowing to $108 billion. Meanwhile, strong semiconductor demand continues to signal resilience in tech-linked trade flows despite broader uncertainty. This article was written by Eamonn Sheridan at investinglive.com.

Trump: We were called this morning by the right people from IranIran thought they were close to an agreement on Sunday morning - reportFed's Goolsbee: Oil futures show this will be a short-run problem (why he's wrong)US March existing home sales 3.98m vs 4.06m expectedIran officials are studying abandoning enrichment - reportOPEC says output fell 7.7 mbpd in March. Keeps demand forecast relatively stableCanada February building permits -8.4% vs -2.1% expectedUS naval blockade said to not impede neutral transit to or from non-Iranian destinationsECB's Vujcic: Energy prices still very close to baseline scenarioMarkets:WTI crude oil up $1.15 to $97.79US 10-year yields down 1.8 bps to 4.299%Gold down $4 to $4743S&P 500 up 1.0%NZD leads, JPY lagsIt was another lively day in markets and the theme was positive despite JD Vance's crashout from Iran negotiations. The biggest moves came right at the open in Asia but there was steady improvement in large part because the bombs aren't flying. As the day continued, it was increasingly clear that negotiations were ongoing and then Trump spoke a midday and offered up some positive takes.It took some time to turn markets but a -50 point day in S&P 500 futures steadily turned to +70 points.That was validated by other markets as the euro and pound made steady gains against the US dollar. EUR/USD is now within striking distance of pre-war levels and 350 pips from the lows.The bond market also saw an 8 bps reversal with US 2s down to 3.77% and finishing near the lows of the day. The Fed's Goolsbee made a case for looking beyond the oil price spike.Most importantly, WTI crude oil tracked down to $98 from as high as $105.63 as it was steadily sold in US hours. This article was written by Adam Button at investinglive.com.

Trump officials are weighing another possible face-to-face with Iranian leadership, according to CNN. That's likely a soft float towards an earlier report that cited Iranian sources and said a meeting would take place on Thursday.In any case, the oil market is speaking much louder than the headlines.WTI is now trading at $97.19 from a high of $105.63 shortly after the open. That's a huge range and reflects growing optimism.The best signs came from Trump himself. He said Iran had called earlier in the day and was positive about the implications. He continues to focus comments on nuclear rather than the missile program or sanctions. What's less clear is what will happen with Hormuz but it's hard to see any kind of quick resolution unless Iran reopens it.It's not just oil sending positive signals. US equity futures started the day in deeply negative territory but are now 120 points off the lows, and up 0.6%. The euro is higher on the day and Treasury yields are lower, reflecting less worry about inflation problems. Even bitcoin has turned around and is higher on the day at $72K after falling on the weekend after the initial headlines about a breakdown in talks.As for oil, the worry is that it will be problematic to replace the missing barrels. Every day about 13 million barrels aren't produced or shipped and that's going to take a long time to rebuild (at best) in a market that might have 1 mbpd in excess capacity. Even that much could be in doubt once the scope of the war-related damage in the Middle East (and Russia) becomes clear.For now though, the oil market is offering up strong signs of relief, even though the headlines haven't yet caught up. This article was written by Adam Button at investinglive.com.

The euro is one of the most-straightforward Iran war trades, albeit not one with the highest torque.The reasoning is simple: Much of the oil and the refined products shipped through the Strait of Hormuz ends up in Europe, fuelling autos and airplanes. The cut off of those supplies endangers the European economy more than than it does the US economy, and as a result we've seen the euro under performer since the war began.But if we look at the chart now, we can see the steady turn and now the euro is back to where it was during the opening shots of the conflict.The euro may also be getting a lift today from the election in Hungary, which saw Orban removed from power in a move that should increase European harmony on several issues. At the same time, the euro is rising in step with the pound and still trails the commodity currencies and Swiss franc so I'd be hesitant to put much weight on Hungary.The main message fro mall markets today is that the war is closer to a conclusion, despite the grandstanding from JD Vance. Trump's comments today sounded positive and he said he got a good phone call from Tehran today. The market was leaning into the TACO before Trump even spoke as the ceasefire held.In the past few minutes, the moves in the euro and risk assets have accelerated but there's no clear catalyst. Instead, the market appears to be increasingly comforatble with the state of play in Iran. The US appears to be focused on nuclear and Iran said it was 'inches' away from a deal before Vance abruptly left. The contours of any agreement appear to be removing Iran's uranium in exchange for sanctions relief and funds. It's not clear how control of Hormuz will function but it's safe to assume that the oil will flow, with a toll or not. This article was written by Adam Button at investinglive.com.

Anyone in the oil market would tear that argument apart:The backwardated curve (front at $100, December at $77) doesn't mean "the market thinks prices will fall to $77." It means holders of physical oil are demanding a large premium for near-term delivery relative to deferred delivery. That's a statement about current scarcity and inventory conditions, not a prediction about where spot prices will be in December.The empirical record shows just how far off Goolsbee is in relying on the curve.If you simply compare where the futures curve said oil would be in 6–12 months versus where spot actually landed, the curve's forecasting accuracy is terrible — no better than a naive "price stays where it is today" model. Studies going back decades have shown that oil futures are not efficient predictors of future spot prices. The curve told you oil was going to $40 in 2007. It didn't. It told you oil was going to recover quickly in 2014–2015. It didn't. It said sub-$30 oil was transitory in early 2016 — that one it got roughly right, but largely by accident.Some of the most violently backwardated oil markets preceded further price increases, not declines. The curve was backwardated in mid-2007 before oil ran from $75 to $147. It was backwardated through much of 2021–2022 as oil kept grinding higher. The backwardation was telling you the physical market was tight — and tight physical markets often get tighter before they loosen.When physical inventories are tight, refiners and commercial users will pay a steep premium for barrels now versus barrels later. That's the convenience yield — the value of having the physical commodity in hand. A steep backwardation means inventories are drawn down and the physical market is tight today. Historically, it says almost nothing about whether the shock causing tightness will persist or dissipate.Now I can see the argument why the oil market should loosen up later this year but there's no basis to use the futures curve and Goolsbee is making a big mistake if he truly is. This article was written by Adam Button at investinglive.com.

The next round of talks is scheduled for Thursday in Islamabad, according to a source from Iran cited by the Atlantic.That's another positive sign. It seems highly likely that the US thinks it can get a deal on nuclear material in exchange for whatever Iran is reasonably asking for (sanctions relief +).Next round of Iran-US direct talks will be held in Islamabad on Thursday, a source in Tehran tells meThat's via @arash_tehran This article was written by Adam Button at investinglive.com.

Vance has done a good job on Iran talks, they want to make a deal badlySays sticking point is on nuclearIran didn't agree not to have a nuclear weaponThinks Iran will now agree on nuclearWe'll get nuclear material backIf Iran doesn't agree to no nuclear weapons, there will be no dealWe can't let Iran blackmail the worldMany countries are coming to the US for oil, we'll see if we get a deal before they get hereWe were called this morning by the right people and they want a dealIran wants to be a nuclear nation so they can 'exterminate the world'We may stop by Cuba after we're finished with thisA short time ago, Trump also wrote:34 Ships went through the Strait of Hormuz yesterday, which is by far the highest number since this foolish closure began. President DONALD J. TRUMPTrump also said the Pope is wrong on law and order. Trump also justed deleted the image from earlier that depicted him with Christian imagery.In any case, the S&P 500 is up 32 points, or 0.5%, to 6848. The market senses that a deal is coming.Quotable: "Iran will NOT have a nuclear weapon, and we're going to get the dust back. We'll get it back. We'll get it back from them, or we'll take it!"The ceasefire is set to continue until next Tuesday. This article was written by Adam Button at investinglive.com.