US-Iran Developments
There are various, contradictory reports emerging with regards to a deal between the two countries.
US President Donald Trump earlier wrote on Truth Social that an agreement had been “largely negotiated” and later said that nobody knows what the deal with Iran contains which has not even been fully negotiated.
He also wrote in a separate post that negotiations are progressing in an orderly manner and that he has told his representatives to not rush into a deal.
On the flip side, Iran dismissed Trump’s earlier claim of a deal being negotiated as “far from reality” via its Fars news agency, which did not cite any source behind this rejection.
However, Iran’s President Masoud Pezeshkian said in an interview that Iran is ready to assure the world that it is not seeking a nuclear weapon, neither it is the one seeking instability in the region, putting the blame on Israel.
Here’s How Asset Classes Are Reacting:
Equities
US futures are trading with gains in thin but limited trading as US markets will be shut on Monday due to the Memorial Day holiday.
In view of the rising optimism, Wall Street made new highs on Friday, with the Dow Jones surpassing its previous intraday record, making a new high of 50,812. The index ended off those highs but closed with gains of over 200 points. Futures this morning are also trading with gains of a similar quantum.
The S&P 500 and Nasdaq also registered modest gains on Friday, but underperformed the Dow.
Crude Oil
Oil prices fell in response to the latest developments, with Brent crude prices falling below the mark of $100 for the first time this month.
Brent fell as much as 5.2% to $98.12 a barrel, while West Texas Intermediate or the US crude variant also fell by a similar quantum towards the $92 mark.
Trading here could also be thin as UK markets will also remain shut due to public holidays.
Bond Yields
The US 10-year bond yield had ended Friday’s session at 4.55%. There is no reaction here as markets will only open on Monday evening with the futures reacting.
However, US bond strategists have warned that bond yields may remain higher even if the Iran war ends, as large public debt, a fallout from the AI investment boom, and chances that the US Federal Reserve will raise, instead of cutting rates, are keeping bond investors on the edge.
“In an environment where Fed could potentially be on the table and become a driver of even larger fiscal deficits amid rising debt servicing costs, the long end of the curve becomes more sensitive to what should be primarily a move in short-end rates,” strategists at Bank of America wrote in a note.
Other Asset Classes
While the US Dollar index is around the mark of 99, the prices of gold and silver are trading with gains of 1% and 3% this morning.
