Peace hopes? – North American Session Market Wrap for March 23

Log in to today's North American session Market wrap for March 23

Recent trading sessions have been nothing short of wild roller coaster rides.

Stock Markets reached new cycle lows on Friday and in the overnight Futures session, driven by fears of an escalation as the rhetoric seemed to intensify.

But that wasn't without counting another Trump yo-yo, as he surprised Markets with the announcement of potential peace talks restarting, as the fourth week of the US-Iran conflict officially begins.

On the announcement, a frantic wave of volatility unwinding shook Markets all over:

Gold tumbled to $4,100, only to be saved by its 200-Day Moving Average (closing around $4,400). Stock Markets across the world exploded by 3% from their relative lows, Yields significantly eased, and, most importantly, Oil fell further.

WTI broke the $90 psychological bar, and more strikingly, Brent fell back below $100 for the first time since March 13 – A significant easing in pricing compared to the slow grind higher that had been seen since.

For now, this is only the beginning of some form of de-escalation, but it's not like peace is a done deal.

With Iran denying any potential talks, optimism quickly faded. However, there are still signs that talks could be coming soon, with Iranian Parliament Speaker Qalibaf travelling to Pakistan with US and Israeli approval.

With about 4,500 US Marine troops currently traveling towards the Middle East, this could just be a distraction tactic, as mentioned here. Still, the reality is that we are now entering the fourth week, and both Israel and the US mentioned a 4 to 5-week operation.

That would be a massive repricing for a deal, as Markets were getting increasingly pessimistic about the length of the conflict – The only truth is what Markets are saying:

Keep a close eye on WTI, Brent, the US Dollar, and Stock Markets, which are losing some of their session strengths as the session concludes.

Read More:

• Prudent optimism in Wall Street as US-Iran talks could confirm – Dow Jones and US Stock Market Outlook
• Crazy swings all across Markets as US-Iran talks pick up: Gold grazes $4,000, WTI to $90 – Market Check
• Gold (XAU/USD) recovers from 9% plunge, technical bias remains firmly bearish below $4,500/oz

The heatmap did not change much since our afternoon Stock Market check, but there has been some (logical) profit-taking and deleveraging towards the close – Uncertainty is still high, but tomorrow should help to clarify whether the optimism is logical or not.

The session got wild after the Trump Truth Social post – Look at all the wild swings around Markets.

Oil remains the guide for Market flows and sentiment. Those waiting to fill up their gas tanks at lower prices might still have to wait a bit, but that's definitely an improvement!

Tomorrow's continuation will be necessary to confirm the risk-on turn for global assets.

FX was all over the place today, with risk-off currencies initially leading along with the stronger GBP (with a hike repricing for next meeting with the Bank of England – Watch out if Brent falls off a cliff!)

But risk-currencies then took the lead, supported by the tumble in the Dollar after the Trump post. GBP, AUD and NZD are the leaders of today's session

The calendar for the next 24 hours is packed.

APAC traders will have to lean on the AUD and JPY for a few economic clues including Australian PMIs and Japan Inflation. But NZD traders will also have to log in for a Governor Breman speech at 21:00 (ET).

Not even mentioning a flurry of Central Bank speeches, PMIs will release throughout most Major economies, and it seems to me that around this point of the cycle, Central Bankers will look more closely at economic clues to know whether they should actually hike or not – Expect these releases to move Markets!

Keep a close eye on sentiment and Middle East news.

Safe Trades!

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