Sentiment sours but hopes remain – North American Session Market Wrap for April 7

Log in to today's North American session Market wrap for April 7

After streaks of rebounds in Global Assets, a reality check came to sap the Market mood.

Traders were seemingly avoiding the narrative of the soon expiring key US deadline for a major escalation toward Civilian infrastructure.

The session started on accelerating concerns as the clock ticks ahead of the 8 PM mark, but some rumours of a potential deadline extension helped to soothe Market sentiment.

As the headlines came by, Stock markets erased their large drops, but with this deadline extension not having been confirmed by any parties, it remains more fantasy than fact until the world receives better news.

Pakistan's Prime Minister Sharif, mediator for the ongoing US-Iran indirect talks, officially pleaded for the deadline extension a few hours ago, saying that talks were slowly but surely progressing.

The request for a two week deadline is a consequent one, so it will be interesting to see what the US President has to say – It's about 4 hours to a major potential escalation in the war. Even the White House speakers did not know what Trump would ultimately decide.

Flash News: Iran is reportedly positively considering a Pakistani-led two week ceasefire – To be taken with a pinch of salt as the US would still have to agree.

What is sure however is that heavy artillery is heading into the Middle East ahead of tonight's buzzer.

Crude Oil prices had been slowly rising since the beginning of the week, now remaining much closer to $115 as Physical tightness keeps gripping Buyers, now 6 weeks into the conflict provoking heavy disruptions in global deliveries.

Ahead of the key deadline, Markets are getting ready for major binary risk, with either a deal being reached, leading to large rallies in global assets (drops in USD and Oil), or the effective contrary – In such environment, it is essential to keep your risk in control!

A deadline extension would leave rangebound Markets as traders could lose patience.

Read More:

• NZD/USD tests major 0.57 support ahead of RBNZ meeting – FX Technical Levels
• Bears take the advantage but Trump saves the day – Dow Jones and US Stock Market Outlook
• 10 Hours to $150 Oil? The looming deadline threatening the Strait of Hormuz

Large recoveries have occurred around all sectors since the easing in narrative, leading to major rallies in US Indexes around the close.

Apple notably erased half of its prior 4.50% fall and some Mag 7s actually turned positive as Markets started to price in another TACO. Difficult to say how this will end.

Today's risk-off session took a consequent turn in the final hour of trading as traders progressively start to price in an actual truce ahead of the 8 PM deadline.

Oil is tumbling back around $113 as we speak and other risk-assets are exploding higher towards the close – Bulls will hope that somebody know something, because this could be catastrophic in the absence of an actual deal.

The Aussie dollar is the main benefactor of the recent ease in narrative, profiting from rebounds in commodities and the proper turn in momentum.

The US Dollar and New Zealand Dollar will be sharing the center stage in the next 24 hours as Markets prepare heavy catalysts for their movements – The Deadline for the USD, and the RBNZ for the latter (don't forget to check out our preview for the meeting!)

Expect a large repricing in all Markets in coming hours with huge developments approaching for the US Dollar.

In terms of events, don't forget this evening's RBNZ Meeting, and the Trump Deadline.

The overnight session will be huge for the Euro, with inflation data and retails sales releasing for the Eurozone – If it combines with a proper deal, EUR/USD could shift higher.

As always, keep a close eye on sentiment and Middle East news.

Safe Trades and a Successful Week!

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