Trump’s Iran hesitation likely to dampen market rally – Daily Business
2 min read
Donald Trump: no rush
Donald Trump’s deal to reopen the Strait of Hormuz remained on hold overnight and could dampen expectations of a rally in global markets.
Bond and equity traders have been encouraged by statements emerging from the US president over the weekend, raising hopes of a pullback in energy-driven inflation.
However, Mr Trump has said he is “in no rush” to reach a deal, writing on his Truth Social site that both sides “must take their time and get it right”.
The president said that the talks involved the leaders of Saudi Arabia, the United Arab Emirates, Qatar, Turkey, Egypt, Jordan, Bahrain and Pakistan.
Mr Trump’s claims that a deal had been “largely negotiated” was disputed by Fars, an Iranian news agency with links to the Islamic Revolutionary Guard Corp.
It said that any agreement would ensure the Strait of Hormuz would continue to operate under “the monopoly and discretion of the Islamic Republic of Iran”.
Sources in the Gulf region say that the tension has switched from US-Iran hostility to a conflict between Iran and the UAE which is being targeted beyond what is being reported in the west. The UAE may not agree to the terms proposed.
Trading in global bonds, equities, currencies and crypto, will remain volatile. A report from Wood Mackenzie last week warned that oil could hit $200 a barrel if the dispute is not resolved by the end of the year, a potential outcome given Mr Trump’s mood swings and Iran’s intransigence.
Meantime, hints that a deal is close may be enough to see bond yields and oil prices fall while equities, particularly in airlines and industrials, would rise. London will be closed for the Spring bank holiday.
Nigel Green, CEO of financial adviser DeVere, said: “Recent weeks have been dominated by fear that another inflation wave was building through energy markets. Bond yields reflected those fears aggressively.
“If diplomacy gains traction, investors could see a powerful relief rally extend rapidly across bonds, equities and digital assets.”
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