The ceasefire
The biggest news of the week is, or perhaps I should say was, the ceasefire agreement between the United States and Iran.
It provided for a two-week truce, centred on a partial reopening of the Strait of Hormuz.
Markets reacted very positively:
- The CAC 40 is up 3.37% over a month
- The S&P 500 is up 2.78% over a month
- The Nasdaq 100 is up 3.02% over a month
- The Nikkei 225 is up 4.99% over a month
Unfortunately, the improvement only lasted a few days.
Israeli operations in Lebanon continued after the truce was announced, limiting the agreement’s real scope and adding another point of disagreement to regional talks.
Against that backdrop, the weekend talks in Islamabad, Pakistan, failed.
On 12 April, Trump announced a naval blockade targeting vessels bound for Iranian ports.
Where crypto stands
Bitcoin was at $70,620 this morning, up 2.4% over seven days and almost unchanged over the past 30.
Ethereum was at $2,182, up 5% over the month.
The ceasefire announcement had pushed Bitcoin towards $72,700, with volatility rising sharply across the market.
Another development worth noting: the launch of Morgan Stanley’s Bitcoin ETF.
Despite the geopolitical backdrop, demand for Bitcoin is still there, particularly among institutions.
Oil
Brent is trading around $102.43 this morning.
Over the week of 6 to 13 April:
- Brent traded around $109 on 6 and 7 April, before the US ultimatum expired
- The ceasefire announcement on 8 April triggered an intraday fall of more than 13%
- By the end of the week, Brent was around $95
- The US naval blockade announcement sent it up more than 7%, towards $102
So the oil market remains entirely dependent on developments involving Iran.
Saudi Arabia also said attacks on its energy facilities had reduced production capacity by around 600,000 barrels a day before it was restored.
In other words, this isn’t about to sort itself out.
Gold
After reaching highs near $5,100 in early March, gold fell sharply.
The benchmark COMEX gold contract is down 6.11% over the month, trading around $4,752 this morning.
The US 10-year Treasury yield is around 4.30% to 4.35% towards the end of the period.
At that level, US government bonds still offer a high return, reducing gold’s relative appeal.