Monday was another risk-off session, with equity futures paring overnight and morning gains. Equities appeared to play catch-up to the move higher in crude, with WTI and Brent both firmer throughout the session, as WTI settled above USD 100/bbl. The key geopolitical developments were the Houthi’s entering the war for the first time, while US President Trump said talks with Iran were making good progress and he expected a deal to be agreed soon. However, he warned that if no deal is reached, the United States would completely obliterate Iranian energy and power facilities, including Kharg Island. Elevated tensions weighed on sentiment through the day, as equity futures tested the overnight lows before paring some losses into the closing bell while oil settled at highs and post-settlement trade saw further gains for crude benchmarks. The U.S. Dollar was bid against major currencies, except the Japanese Yen, which drew support from a hawkish Bank of Japan, Summary of Opinions and verbal intervention from officials. T-notes were firmer across the curve, amid quarter-end activity or as participants began to assess the broader economic impact of the war beyond its effect on prices. Meanwhile, Fed Chair Powell said policy is in a good place, that policymakers are not yet facing the question of what action to take, and that the tendency is to look through supply shocks, while remaining attentive to inflation expectations, which are well anchored but being monitored closely. Governor Miran largely reiterated his familiar commentary. On metals, aluminium prices surged to 4 -year highs after Iranian airstrikes against two major Middle East producers over the weekend. Fed Chair Powell said differing views within the FOMC are constructive given the current uncertainty, noting risks to both sides of the Fed’s dual mandate. He reiterated that policy is in a good place to “wait and see” as the Fed assesses the economic impact of geopolitical developments and tariffs. He views tariffs as likely a one-time inflation boost of around 0.5–1.0%. While the Fed tends to look through supply shocks, he stressed the importance of monitoring inflation expectations, which remain well anchored, and said the Fed is not yet at the point of deciding its next move. On the outlook, Powell highlighted uncertainty around the size and persistence of the energy shock but maintained optimism over the medium to long term, citing AI-driven productivity gains. When asked about students, he acknowledged that it is currently a challenging time for job creation, particularly for new entrants, but reaffirmed confidence that inflation will return sustainably to target. Regarding private credit, the Fed Chair said he does not see risk of contagion right now but the Fed is watching the market very closely. Fed Member Miran said there is no evidence of a wage price spiral, and such an outcome appears extremely unlikely. Inflation expectations have not been affected yet by elevated oil prices. The uber-dove noted the Fed traditionally looks through oil shocks and would love to hear Powell confirm that the traditional view to the situation applies. On the balance sheet, he remarked it is too big and would like to shrink it, and reiterated policy remains restrictive and wants 100bps of rate cuts in 2026. Elsewhere, Oil closed higher by 4% while Gold had a quiet session, ending Monday’s trading with a gain of 0.35%.
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For anyone following my Platinum Service it was flat yesterday and is still ahead by 8477 points for March having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points whe ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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