Weekly Espresso

Last Monday, President Trump sent US markets down after he threatened to “obliterate” Iran’s power stations and water plants if they didn’t “shortly” agree to peace terms. Optimism that Trump was trying to wind down the war gave markets a lift on Tuesday and Wednesday, with the S&P 500 ultimately soaring 6% and ending a five-week losing streak. Trump’s prime time address on Wednesday evening failed to reassure investors and hit markets when they opened again on Thursday. However, by the close of play, US indexes recovered and finished just below Wednesday’s peak as we went into the Easter weekend.

Six weeks into the war, as last week demonstrates, the conflict and Trump’s rhetoric continue to mould global markets…

Oil prices fell on Monday after President Trump postponed his threaten attack on Iranian power plants. Similar to what we saw during “liberation day” tariff U-turns last year, there was a flurry of unusual activity on oil and S&P futures before Trump announced the postponement. The number of bets on crude and brent oil contracts effectively increased threefold exactly ten minutes before the announcement sparking fresh speculation about insider trading…

The Federal Reserve, Bank of England (BoE), European Central Bank (ECB) and the Bank of Japan (BoJ) all voted to keep interest rates unchanged last week.

Fed board members now expect US inflation to reach 2.7% by the end of the year, up from December’s prediction of 2.4%. Regarding the impact of the war in Iran, Fed Chairman, Jerome Powell, cautioned “We just don’t know what the effects” will be…

Various attempts to try and counter rising oil prices helped keep the price of oil below $100 a barrel in the early stages of last week. On Monday, South Korea and Thailand said they would set limits on fuel prices. All 32 members of the International Energy Agency (IEA) agreed to release a record 400 million barrels of oil from their emergency reserves. Despite this being more than double…

The price of oil shot up above $100 a barrel for the first time since July 2022 when commodity markets opened at midnight. Energy sites and fuel depots in Iran were bombed by the Israeli Defence Forces (IDF) this weekend, covering Tehran in thick plumes of black smoke. In response, a spokesperson for Iran’s Revolutionary Guards (IRGC) threatened attacks against energy facilities in Gulf states and said, “If you can tolerate oil at more than $200 per barrel, continue this game.” According to reports, the US are unhappy about how wide-ranging the IDF’s strikes were, marking the first significant US-Israeli disagreement since the conflict began…

On Saturday, the US and Israeli forces launched strikes across Iran targeting key security and political targets. President Trump announced the death of Iran’s Supreme Leader Ayatollah Ali Khamenei later that day. Airstrikes have continued across the country since, and, despite the loss of forty senior commanders, the Iranians have continued retaliating by bombing targets in Israel and the Gulf. Unlike last year’s Operation Midnight Hammer, Trump expects the current campaign to go on for “four weeks or less”.

At least three ships were attacked near the Strait of Hormuz this weekend and the important waterway is effectively at a standstill. 20% of the world’s oil and gas are shipped through Hormuz…