Our market continues to dance to the tune of the US President. Whatever ‘off ramp’ is conjured in the mind of Donald Trump to end the war and Hormuz pinch, his words of appeasement that never quite stack up, once again prompt the idea within our fraternity that maybe this is the time.
So, Brent rallied from $96 to $113 between May 7 and May 18. Equities started weakening in the middle of last week. Bonds are being sold off, and the US 10-year yield has risen to its highest level since last February, while the 30-year yield hit 5.18%, a fresh 19-year record. Both consumer and producer prices are on an upward trajectory in the US and elsewhere. Estimates put the cost of the Iranian war at around $72 billion.
It is difficult to confirm whether Donald Trump is playing brinkmanship with markets rather than Iran. Last week he said, “The only thing that matters when I’m talking about Iran is they can’t have a nuclear weapon, I don’t think about Americans’ financial situation”. In a sea of half-truths, or worse, in his second term and peppered with an in ordinate number of gaffes, this one has curiously found little press or challenge.
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