Trump Announcement Eyed as Stocks Slip Again

Oil Pares Gains Ahead of Iran Decision

US futures are tracking their European counterparts lower ahead of the open on Tuesday, as traders await an announcement from US President Donald Trump on Iran.

Trump is widely expected to announce that the US is withdrawing from the Iran nuclear deal later on today, despite the best efforts from his European partners to convince him to work with them to improve it. Should the US withdraw, investors will be keen to know what sanctions will be imposed as a result and what impact that will have on the country, most notably its oil output.

Oil prices are paring gains early in the European session after having peaked on Monday in response to Trump’s statement. WTI crude prices surpassed $70 a barrel for the first time since November 2014 on Monday and how they respond later will likely depend on how restrictive future sanctions – assuming there are any – are on the country’s ability to export.

WTI Crude Daily Chart

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It will be interesting to see what Trump’s approach will have on risk appetite, with US equities already struggling to generate much upside momentum. Some will naturally point to the progress being made in Korea as evidence that a more hard-line approach is effective, although every situation is different and so doing so again may not yield the same result.

DAX Slips on Concerns over Possible ECB Stimulus Extension

US indices continue to look vulnerable having repeatedly failed to surpass recent peaks. While the Dow has managed to find support just above 23,000 over the last few months, I’m not sure it can take many more challenges and a break of this could be the catalyst for another sharp decline in equities.

Dow Daily Chart

While the week is looking a little quiet on the economic events side – with the Bank of England decision on Thursday and US inflation data the highlights – we do still have some first quarter earnings releases, with 45 S&P 500 companies reporting. It’s been a very strong earnings season so far, although this has provided little comfort for investors that appear to have temporarily lost faith in stock markets.

Italian Politics Weighs on the Euro

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam