investingLive European session wrap: Oil climbs, threat softens as markets keep on edge

Headlines:

Markets:

• WTI crude oil up over 3% to $93.35, Brent crude oil up 4% to $106.30
• European equities drop back lower; S&P 500 futures down 0.8%
• US dollar holds slightly firmer across the board
• 10-year Treasury yields up over 5 bps to 4.38%
• Gold down 1.4% to $4,442, Silver down 4.5% to $68.03

As the weekend starts to draw closer, markets are growing more nervous as US-Iran negotiations appear to be going nowhere still. US president Trump came out to warn Iran to “get serious soon” or risk the consequences, which “won’t be pretty”.

So far, there’s not even any anecdotal evidence of both sides coming close to a peace compromise. And that is starting to see the early week optimism fade in markets.

Oil prices are ramping higher once again, as we see broader markets readjust to the moves from the past few days. WTI crude is up over 3% to $93.35 with Brent crude up 4% to $106.30 currently.

In turn, we’re seeing equities fall back lower as the jitters are starting to bite at risk sentiment again. European indices are seeing roughly 1% losses across the board while S&P 500 futures are down 0.8% on the day.

This comes as the bond market is also selling off, with 10-year yields now moving up to 4.38%. That’s a notable bounce from the early week low of 4.31% and just off the high at the start of Monday of 4.44%.

The shift in the market mood is putting a bid in the dollar again with EUR/USD down 0.2% to 1.1540 levels while USD/JPY is keeping steadier on approach to the 160.00 mark. The latter is up 0.1% to 159.57 on the day with eyes on Tokyo amid potential intervention action. Meanwhile, AUD/USD is down 0.4% to 0.6925 currently.

Amid all of that, precious metals are also having a tough day with gold down 1.4% to $4,442 and silver down 4.5% to $68.03.

All eyes stay on the Middle East as we await further developments. But for now, markets are definitely starting to feel the heat again as peace talks look to be going nowhere and more importantly the fact that the Strait of Hormuz isn’t reopening any time soon.

On the latter, Iran is said to have given Trump a couple of “presents” this week. But when you look at the data, it’s hardly worth anything to shout about. And it is no wonder why Trump did not boast about it. Just look below: