Market Brief – Strait of Hormuz Closed?

IRGC closes the Strait of Hormuz

On Saturday, the Islamic Revolutionary Guard Corps issued a statement declaring that the Strait of Hormuz is closed to shipping until further notice. Any further action by the US or its allies in response to the blockade will be met with severe retaliation. Primarily at risk are US allied bases in the region. The Corps also reported that, as a warning, it fired upon a ship that disabled its identification systems, moved along a route approved by the Iranians, and ignored an order to change course.

US denials

The US Central Command (CENTCOM) reported in turn that Iran does not control the strait and that traffic is moving smoothly and without major disruptions. Donald Trump rejected Tehran’s statements, assuring the navigability of the route for ships moving in accordance with the law. Simultaneously, he warned that if Tehran does not cease its actions, the US will carry out further attacks on Iran. Recall that a few days earlier, the United States conducted strikes on 80 targets in Iran, and President Trump announced the breach of the ceasefire pact at the NATO summit in Ankara.

Commodities No major surprises in the commodities market.

• Brent and WTI crude oil prices have returned to local highs around 79.5 and 74.5 dollars per barrel, respectively. This represents an increase of approximately 4.5%.
• Gas on the Dutch TTF exchange is also rising (+3.6%). We must currently pay slightly over 50 dollars per MWh.
• Yields on 10-year US bonds are rising (4.58%), contributing to declines in gold prices ($4060) and silver ($58.3).

Equities Deep red across Asian markets. Risk sentiment is deteriorating significantly once again.

• Following substantial gains resulting from the company’s debut on the US Nasdaq exchange, the Korean SK Hynix is weakening by over 14% today. The entire KOSPI index is again deep in the red (-8.2%).
• Losses are also noted by the Japanese Nikkei 225 (-2.2%) and the Chinese Shanghai SE Composite (-1.6%).
• Only the Hang Seng stands out (+0.5%), supported by JD (+3.7%), Alibaba (+2%), CNOOC (+1.7%), and Xiaomi (+1%).

Futures on European and US markets are also in the red.

• Nasdaq 100 is down 1.4%.
• DAX traci 0,9%.

Macroeconomic Data

We are starting a week significant from a macroeconomic perspective quite calmly. Apart from the PMI index for the services sector in New Zealand (which, incidentally, turned out quite well – 50.6), there are no significant readings expected today from our perspective. We are awaiting Tuesday, which will bring the publication of March inflation data from the US and the hearing of Chairman Warsh before the US House of Representatives.

Waluty In the face of investors retreating from risk, the US dollar reigns supreme, although its gains are currently quite small. The EURUSD pair is oscillating around 1.14.

• At the top of the list are commodity currencies – the Norwegian krone and the Canadian dollar (weakening not exceeding 0.1% against the US dollar).
• At the bottom is the Australian dollar (-0.4%), the high-beta Swedish krona (-0.4%), and the yen (-0.4%), which is slowly approaching recently established local lows.
• All key emerging market currencies from our perspective are also in the red. Performing particularly poorly are the Hungarian forint (-0.7%), the South Korean won (-0.6%), and the South African rand (-0.6%) – currencies of countries most exposed to the deepening energy crisis. Among the losers, we also find the Polish zloty (-0.5%).

₿Cryptocurrencies Risk aversion is weighing on key cryptocurrencies. Both Bitcoin (-1.6%), which is falling below the 63,000-dollar barrier, and Ethereum (-1,7%), for which we must currently pay about 1,780 dollars, are losing value.

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