The U.S. launched strikes on Iran early today, hours after it revoked a license authorizing the sale of Iranian oil in retaliation for what the U.S. said were Tehran’s attacks on ships in the Strait of Hormuz. Iran hit back with strikes on Bahrain and Kuwait. President Trump said later that the interim agreement with Iran was “over” but he would allow talks to continue. That raised concerns that the wider conflict in the Middle East could resume — and oil prices shot up. “For me, I think it’s over,” Trump responded when asked about the status of ceasefire and as reported by the Associated Press. He added that U.S. representatives can continue negotiations but he cast doubt on the outcome. “They can talk, but I think they’re wasting their time,” he said. “They are scum,” Trump said of Iran’s leadership.
Crude oil prices spiked, the U.S. stock indexes sold off and bond yields up-ticked on the renewed military action in the Middle East.
FOMC minutes out this afternoon as options traders price in less-hawkish Fed. The minutes from the last Open Market Committee (FOMC) meeting of the Federal Reserve are out this afternoon. As usual, the marketplace will parse the minutes for clues on the trajectory of U.S. monetary policy. Meantime, options traders are increasing bets that the broader market is overestimating how much the Federal Reserve will raise U.S. interest rates this year. “The dovish shift began last week when Fed Chairman Kevin Warsh said at the European Central Bank’s symposium in Portugal that inflation risks have recently come down. Since then, flows in options linked to the Secured Overnight Financing Rate, which closely tracks the central bank policy path, have been skewed toward wagers that stand to benefit if expectations for rate hikes in the swaps market start to fade,” said a Bloomberg report.
The key outside markets today see the U.S. dollar index firmer. August Nymex WTI crude oil prices are sharply higher and trading around $75.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.6%.
Technically, August gold futures prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at this week’s high of $4,238.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,750.00. First resistance is seen at $4,100.00 and then at today’s high of $4,144.70. First support is seen at $4,025.00 and then at $4,000.00. Wyckoff's Market Rating: 2.0
September silver bulls see their next upside price objective is closing prices above solid technical resistance at $65.00. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at $60.00 and then at today’s high of $61.455. Next support is seen at $57.00 and then at the June low of $56.13. Wyckoff's Market Rating: 2.0
