US President Donald Trump announced yesterday evening that the ceasefire would be extended. This news noticeably improved sentiment in the markets. Until that decision, markets had still been under significant pressure yesterday.
With the extension of the ceasefire, hopes are now rising for a lasting peace in the Persian Gulf. Many investors are also expecting a noticeable easing in energy prices as a result.
Oil prices decline after ceasefire extension
Yesterday, oil prices had still been rising during the course of the day, as the end of the ceasefire was approaching. Both US crude WTI and North Sea Brent temporarily climbed well above the $90 mark again.
Following the extension of the ceasefire, this trend has reversed. Currently, WTI crude is trading on the spot market at $87.95 per barrel. This corresponds to a decline of around 1.05%. The price of Brent is falling somewhat more moderately by 0.67% and is currently at around $93.20 per barrel.
Equity markets breathe a sigh of relief
Equity markets are showing a moderate recovery following the latest developments in the Persian Gulf. However, the cautious optimism and only slightly declining oil prices suggest that many investors remain skeptical about whether the peace talks will ultimately succeed.
After mixed signals from Asia – Japan somewhat weaker, China mostly firmer – pre-market futures trading is showing restrained optimism. Futures on the German benchmark index DAX are currently rising by around 0.11%. Futures on the TechDAX are gaining about 0.30%. France’s CAC 40 is up 0.14%, while the Euro Stoxx 50 is somewhat more subdued with a gain of 0.06%.
US markets show stronger recovery
The recovery is more pronounced in US equity indices. Futures on the Dow Jones are currently up around 0.48%. The S&P 500 is gaining about 0.52%, and Nasdaq 100 futures are rising by as much as 0.68%. As in Europe, technology stocks are benefiting the most from the positive developments.
US dollar consolidates, gold price rises
Yesterday, the US dollar gained against most currencies amid the threat of the ceasefire ending. Since the extension of the ceasefire, however, it has eased slightly and is currently moving within a narrow range.
The EUR/USD currency pair is currently trading at 1.1748, up 0.03%. GBP/USD is gaining 0.12% at 1.3521. USD/JPY is down around 0.08% at 158.23.
The gold price is rising again following the latest developments in the Persian Gulf. It is currently trading at $4,764 per troy ounce, which is about 1.34% higher than the previous day.
Bitcoin and altcoins significantly stronger
The relief over a potential peace in the Persian Gulf is clearly visible in the crypto market. Bitcoin is currently trading at $77,992, up 2.62%. This puts it just below a two-month high.
Ethereum is also gaining significantly, trading at $2,394 with an increase of 3.30%. The biggest daily gainer comes from the meme coin segment: MemeCore is currently up an impressive 23.27% at $4.3483.
Market sentiment remains cautious
A pattern that has been observed since early March is currently repeating itself. As hopes for successful peace negotiations rise, oil prices decline and optimism returns to the markets. At the same time, however, skepticism is growing as to whether these talks will actually succeed. As a result, recoveries following positive news tend to remain moderate.
Overall, the market environment remains challenging for now. A sustainable improvement is likely to occur only if there is a genuine breakthrough in the negotiations.