A real peace process or a fantasy? – Markets Weekly Outlook

• Discover our Weekly Market Outlook, exploring themes and events that forged financial flows throughout the week.
• Markets conclude a very volatile week, with hopes for peace going back and forth and sentiment losing its head
• Get ready for next week's action by exploring upcoming events across global Markets.

This week has been nothing short of historic.

Both the Nasdaq and S&P 500 have charged to fresh all-time highs, completely leaving the geopolitical panic behind as traders aggressively price in a proper peace agreement – The move has bulldozed through any type of resistances and prior records, in a move that has left many traders scratching their head.

Only the Dow Jones is looking to catch up to its younger peers, but is already on pace to do so – That is, if the current pricing withstands the weekend.

While the past two weeks of US-Iran negotiations have generated their fair share of chaotic headlines, the diplomatic process unfolding in Pakistan appears genuinely serious, with both sides making significant, market-moving concessions.

The absolute catalyst for the week was this morning's market-rocking news regarding the reopening of the Strait of Hormuz.

Bolstered by President Trump's remarks that he expects a finalized deal in a day or two, the geopolitical risk premium imploded.

Oil prices collapsed nearly 10% since yesterday, completely erasing their previous rally to trade comfortably right below the $90 handle.

Notably, clear signs of insider trading emerged in the Crude market just before the announcement—a continuation of the wild market craziness that has defined Trump’s second term, but certainly not a first.

Moving forward, physical traders will be closely monitoring the Strait to see if actual tanker flows resume.

The euphoria isn't limited to traditional equities paying out big peace dividends. Cryptocurrencies caught a massive bid, with Bitcoin exploding back to life and rallying to sit just below the $80,000 (~$78,000) mark as the weekend approaches, also boosting other crypto assets.

On the macroeconomic front, the reality of the recent commodity shock is setting in. Both US CPI and PPI inflation reports rose strongly, although optimists will console as they missed their most extreme upside expectations.

However, this energy-driven jump could merely be the beginning of a much more significant inflationary wave hitting the economy over the coming months.

This week will provide fresh insights on inflation in other countries including Japan, Canada and the UK.

Now, participants are bracing for a pivotal week.

The current ceasefire officially expires on April 22 – Without a formal extension or a signed peace deal, this historic progress could vanish in a flash, throwing markets back into extreme volatility.

An actual deal will be mandatory to sustain the rally.

As you can see, when Oil suffers, everybody dances. Even with the commodity gapping higher at the beginning of the week, Stock Markets have continued to explode higher and shortly after, everything followed.

WTI Crude is down 10% since the beginning of the week, and off 17% from its weekly opening gap.

The most risky assets have naturally outperformed the recovery, with Cryptos (ETH and Altcoins) on top, Silver dominating the Metals market and Nasdaq dominating global Stock benchmarks.

Discover:

• USD/JPY forms a major Head & Shoulders pattern as Oil crumbles – FX Analysis
• Chart alert: The laggard Dow Jones (DJIA) is in the process of a bullish catch-up above 47,895 key support
• Chart alert: Gold (XAU/USD) potential bullish breakout above $4,900

Traders will have to get ready for a roller-coaster week, with macroeconomic data and major peace headlines on schedule.

Japan is under heavy pressure regarding their future monetary policy, and with the Inflation report for March incoming, where the first effects of Energy price hikes will be felt, the moment could be decisive.

The release is expected on Thursday evening (7:30 P.M.) – A large beat could confirm a rate hike at the end-May meeting if economic conditions don't worsen by then.

Bank of Japan representatives did refuse to comment on the issue during the IMF Meeting.

GBP traders will have a lot on their plate in the coming week, with a three-streak combo:

UK Employment, Inflation and Retail Sales, providing insights on the state of the economy and price rises as participants prepare for an economic shock.

Euro traders will have to pay close attention to the ZEW Economic Sentiment Survey and German PMIs that could also reshape forward looking pricing for the Old Continent.

The US takes a relative break from economic data, only releasing Retail sales on Tuesday and leaves space for continued price discovery.

Keep in mind that past week movements will be contingent on a sustainable peace deal with Iran, with the talks expected throughout the weekend.

CAD traders will also have to reprice chances of future hikes with Canadian Inflation opening the North American week on Monday.

A 2.5% consensus is announced, but energy price rises could definitely point to a beat on such low expectations.

The Hormuz reopening news was icing on a very bullish cake to conclude this extremely positive week.

The heaviest Beta assets did what they did best and kept exploding higher across the Asset map – Cryptos and Silver, finish on top, both up around 3% on average.

US Benchmarks kept extending further to their newfound peaks, with the Dow Jones catching up and concluding the session on top.

On the other side, Crude Oil took a 10% beating after the news, but somewhat bounced as the session went by – Expect a lot of movement in the commodity in the coming week.

Safe Trades and an enjoyable weekend!

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