The chief criticism of the Iran war deal is that it lopsidedly favors Iran

Barbara Rockefeller Rockefeller Treasury Services, Inc.

Outlook

The chief criticism of the Iran war deal is that it lopsidedly favors Iran. The US got nothing--not a single one of the stated objectives. The top criticism is in view today—the deal neglected Israel.

At a guess, they are going to have to start over with a revision to the MoU. The US amateurs will likely screw that up, too. Delay favors Iran, which can now ship oil and likely start imposing it’s tax/fee/toll at any minute. Iran has infinite patience. Trump has none, but as long as the markets get what they want, the opened Strait, he has to bite his tongue and bear it. He thinks the stock market responds solely to him.

Then there is the newly hawkish Fed, which surprised everyone. Markets players underestimated Warsh. They spoke of him being a sock puppet, which was always silly. Warsh is a smart guy and a decent economic analyst—or he wouldn’t be rich. The chief criticism of new Fed chair Warsh is his dropping forward guidance. When we had zero guidance, we had more volatility in various securities and far too much wasteful guessing.

Forecast

Risk is rising from both the Iran situation and regime change at the Fed. Risk aversion favors the dollar and is buttressed by rising US yields that validate the Fed story. Because it’s Friday, we expect some retreat from full-bore dollar-buying.

The amount of retreat tends to be about 20-30% on a normal Friday but will probably be less this time, so don’t count on it. We expect the US to get something done, anything, over the weekend. Most of us can’t bear to watch/read the news these days—it’s maddening to watch such incompetence and dishonesty. Whatever some next, it’s not likely to favor less uncertainty or any wins for the US.

So now we have to worry about whether the markets really do care only about the Strait re-opening. Iran can close it again in a minute. This will shift perceptions but again, back into risk aversion, which favors the dollar. This is a travesty as well as the ultimate irony.

This is an excerpt from “The Rockefeller Morning Briefing,” which is far larger (about 10 pages). The Briefing has been published every day for over 25 years and represents experienced analysis and insight. The report offers deep background and is not intended to guide FX trading. Rockefeller produces other reports (in spot and futures) for trading purposes.

To get a two-week trial of the full reports plus traders advice for only $3.95. Click here!

Author

Barbara Rockefeller
Rockefeller Treasury Services, Inc.

Experience Before founding Rockefeller Treasury, Barbara worked at Citibank and other banks as a risk manager, new product developer (Cititrend), FX trader, advisor and loan officer. Miss Rockefeller is engaged to perform FX-relat

More from Barbara Rockefeller

Share:

GBP/USD bounces back above 1.3200 despite political drama in UK

GBP/USD extends the rebound above 1.3200 in the second half of the day on Friday but the pair is still down more than 1% for the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay.

EUR/USD recovers above 1.1450 on USD pullback

EUR/USD rebounds from the three-month low it touched below 1.1420 and holds above 1.1450 in the second half of the day on Friday. Still, the cautious market mood on growing uncertainty surrounding the next round of US-Iran talks makes it difficult for the pair to gather momentum.

Gold remains below $4,200, looks to post weekly losses

Gold struggles to gather recovery momentum and trades below $4,200 in the American session on Friday, pressured by the hawkish Fed tone and the renewed uncertainty surrounding the next round of US-Iran talks. Despite the bullish action seen in the first half of the week, XAU/USD remains on track to close in negative territory.

Solana extends correction despite ETF inflows, RWA adoption

Solana (SOL) price edges below $70 extending its losses for the fourth straight day this week. The institutional demand for Solana is building, with steady inflows so far this week and Morgan Stanley’s amended S-1 filing for a Solana-focused Exchange-Traded Fund.

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.