No surprises there then. But markets expected this and are still hoping for a ceasefire agreement, now that at least the two sides are exchanging messages. However, the markets will run out of patience if the two sides don’t get close to reaching a deal soon. I would be very surprised if risk assets were to sharply extend their gains from here. Risks remain tilted to the downside for major stock averages, and upside for crude oil.
Crude oil could climb back to above $100
Iran has responded to Trump's proposal, and it has effectively rejected it. According to the nation's press TV, Iran says the war will end only on its own terms… and at a time of its own choosing. They are also making it clear that Trump will not dictate the timeline. Instead, Tehran is setting out strict conditions. Among them, a complete end to what it calls enemy aggression. Second, concrete, legally binding guarantees to prevent this from happening again, and third full compensation for war damages. A few other conditions as well. Effectively, this makes a quick ceasefire agreement difficult and should keep markets in range bound conditions, with a bearish tilt, as investors now await response from Trump. Crude oil could move back above $100 per barrel.
DAX forecast: It is all about oil prices
The German DAX index needs to regain its poise, but it was hovering around a key pivotal level as I have discussed in the video. Watch for full insights:
-- Content created by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
