Oil prices fell again this morning as signs of diplomatic progress between The U.S and Iran, combined with improving prospects of flows of oil weighed heavy on markets. Oil fell more than 1% in the previous session, with Brent Crude Futures in particular slipping below the $100 mark for the first time since September 8th.
Remarks made by Donald Trump yesterday had hinted towards what was a ‘very good’ and productive three-hour meeting with Iranian representatives in New York. But had also earlier threatened that he could annihilate Iran as well. Markets seemed to have focused more on the productive meeting however, with increasing hope that the conflict can finally come to an end, allowing for an ease in the disruption of the Strait of Hormuz. A senior Iranian official also told Reuters that the Strait of Hormuz could be reopened within seven days, as long as Washington lifts its naval blockade of Iranian ports and sticks to scaling back military pressure.
Another by-product of tensions possibly easing in the Middle East has been a continued decline in European Government Bonds. Germany’s 10-year bond yield slipped to 3.448%, dipping from multi-month highs as inflation concerns reduced. Alongside government bonds falling, crude prices falling below $100 per barrel has also led to traders scaling back their bets on additional aggressive ECB rate hikes.
GBP/EUR 1.1636 GBP/USD 1.3286 GBP/AED 4.8827
GBP/AUD 1.8751 GBP/CHF 1.0926 GBP/CAD 1.8712
GBP/NZD 2.3309 EUR/USD 1.1403 GBP/ZAR 21.6114