"The bulls are back in charge as dip buyers have stepped in on the expectation that we could soon see the end to the conflict in Iran, thus normalising energy prices and presenting a buying opportunity after recent declines. In Europe, the mainland markets have recovered by over 2%, with manufacturing stocks particularly gaining traction as fears around soaring input pricing ease."
"Given the fact that Trump came into this conflict calling for regime change, the narrative appears to be shifting in a direction that will likely instead focus on setting back the Iranian regime without lifting inflation to a degree that would hurt Trump's Midterm hopes. The question for markets is whether this is simply a stalling tactic to ease market jitters that had sent WTI to $120."
"To a large extent, the direction of travel for this conflict is as much in the hands of the Iranians as Trump's, with the end only confirmed once Iran opt to allow safe passage for ships in the Straits of Hormuz. Hence, the comments from the Iranians that they wouldn't allow "one litre of oil" to flow out of the region if the conflict continues brought a renewed vigour from Trump."
Bull markets have returned as investors buy dips following expectations of an imminent resolution to the Iran conflict, which would normalize energy prices. European mainland markets recovered over 2%, with manufacturing stocks particularly benefiting as input pricing concerns ease. Trump's statements that the war would resolve "very soon" and that objectives are "very complete" have shifted market sentiment, though actual resolution appears unlikely this week. The conflict's direction depends significantly on Iranian actions, particularly regarding oil passage through the Strait of Hormuz. Trump faces the challenge of maintaining market confidence in resolution while managing inflation concerns ahead of midterm elections. Brent crude has declined 22% from recent highs, though the conflict continues with ongoing tensions.
Read at London Business News | Londonlovesbusiness.com
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