ZuluTrade Blog

Market Recap – The Iranian case

Market View | Friday, May 31, 2019 10:46 AM GMT

At the same time that markets are focusing on the ongoing trade tensions between China and the USA, the geopolitical risk in Iran is rising.

Yesterday an emergency Gulf Cooperation Council summit was organized by the Saudis to discuss about the situation with Iran and recent strikes on oil installations and vessels. The positive angle of the summit was the participation of delegates from Qatar, a sign that the two countries could start cooperating again. Today, Chancellor Angela Merkel will meet United States Secretary of State Mike Pompeo, to discuss on the matter. Later she will meet the Chinese Vice President Wang Qishan. Remember that the USA has withdrawn from the Nuclear Iranian deal since 8 May 2018, the EU and China are trying to keep the deal alive. Last month, the USA has waived the waivers granted to 8 countries to continue importing oil from Iran. Last week three US warships were send to the Persian Gulf.

Contrary to the above environment, oil prices fell significantly.

Meanwhile, a Trump’s tweet turned things upside down once again. He communicated that he will start imposing tariffs on Mexican imports starting from June 10.

Macro releases: Both Chinese and Japanese macro releases were disappointing.  The Chinese Manufacturing PMI has dropped further below the 50 level, the Japanese retail sales and inflation dropped. Today the focus will be on the American core PCE, the most watched inflation metric by the FED.



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