Ceasefire and Fed concerns provoke a late-Session tumble (but Trump saves the Day!) – North American Session Market Wrap for April 21

Log in to today's North American session Market wrap for April 21

Stock Markets faced a brutal dual-threat reality-check today, as shifting monetary policy and collapsing geopolitical diplomacy combined to trigger a violent late-session selloff.

The trading session was already under heavy pressure following incoming Federal Reserve Chair Kevin Warsh's Senate confirmation hearing.

Warsh delivered a resolute but mixed-feelings message, emphasizing the need for a reform of Fed processes while hypocritically defending the central bank's absolute independence (but not answering some critical answers on the issue).

By signalling a definitive end to the era of elevated balanced sheets Warsh forced equity bulls onto the defensive early in the day and sparked a notable intraday pullback.

However, the real fundamental damage arrived just before the closing bell.

With the critical April 22 ceasefire deadline looming at Midnight Pakistan time, reports suddenly hit the wire that the high-stakes US-Iran diplomatic negotiations scheduled in Islamabad had been abruptly canceled.

The Iranian side were apparently reluctant to save the deal – Nevertheless, President Trump just announced a Ceasefire extension. Talk about a bipolar end to the session!

Stocks crashed into the late session as the euphoric peace trade—which had just driven US Markets to all-time highs—burnt its feathers.

Algorithms and institutional traders scrambled to de-risk, dragging major indices to new lows at the close, while Crude Oil prices did the exact opposite.

But as per usual, the US President saved the day by announcing another Ceasefire extension, helping Futures to rebound (right after the Market close however, a classic play from the Administration).

Things are not expected to become much clearer for the time being, so Traders will have to remain on edge until a proper path to diplomacy gets reached.

Read More:

• A new era for the Fed? Looking back on Kevin Warsh's US Senate hearing & Market reactions
• Fed's Warsh and Ceasefire-end triggers Market Double tops – Dow Jones and US Stock Market Outlook
• The Dollar is forecasting tougher times ahead – EUR/USD, AUD/USD & Dollar Index (DXY) overview

The Market close heatmap could be quite misleading as Trump just TACO'd again right after the close – So while the performance looks quite negative, a rebound could potentially erase some of the late session drops.

The price action in Stocks is still quite mixed, so any new all-time highs in the immediate timeframe would be unrealistic.

Consumer earnings continue in tomorrow's session, so traders will be able to get a clearer picture of the narrative and projections for upcoming quarters.

Metals and European Stocks are feeling the heat, as they quite more realistically priced the uncertainty looming with the US-Iran Ceasefire.

A concrete timeline for the ceasefire extension is to be provided, and for the rest, we will see tomorrow as this has been a quite unexpected turn in narrative.

The US Dollar slowly grinded at the top of the FX board, but Trump's latest TACO just reversed the move higher.

Except for the Kiwi Dollar, jumping from the recent beat in NZ inflation, the rest of FX action was quite dull.

The upcoming session will be huge for the GBP (with the UK continuing their relentless data releases this week) and the ECB (and European assets, particularly with the Ceasefire in a volatile deadlock).

As always, make sure to follow talks around US-Iran negotiations, with the negotiations starting again tomorrow.

Safe Trades!

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