- The conflict in the Middle East is escalating: over the weekend, the Houthis launched missile and drone attacks against Israel, while Israeli strikes caused temporary blackouts in Tehran and the surrounding area.
- The United States continues to build up its forces in the region—several hundred special forces personnel (Rangers, SEALs), thousands of Marines, and the 82nd Airborne Division are already in the area, giving Trump the option of a ground operation.
- Pakistan has announced that it will host direct talks between the U.S. and Iran in the coming days; Trump has signaled both progress in the negotiations and the possibility of seizing Iranian oil infrastructure, including Kharg Island.
- Donald Trump said that negotiations with Iran are going well and that the Iranians have agreed to most of the 15 points proposed by the Americans.
- Israel confirmed via Channel 12: In the event of a potential U.S. ground operation in Iran, the Israeli military will not participate on the ground.
- Brent crude opened the week significantly higher (~$107.7/bbl, +0.84%), but retreated after an initial rally, reflecting the uncertain ground built on both hopes for de-escalation and the real risk of a blockade of the Strait of Hormuz.
- The market is closely monitoring tanker traffic—Trump noted that Iran has allowed 20 tankers to transit the Strait of Hormuz.
- Gold continues its upward rally, trading at $4,514/oz (+0.49%), while silver is up 0.77% to $70.4/oz – demand for safe-haven and inflation-hedging assets remains strong amid the risk of war.
- Natural gas (NATGAS) is down 3.23% to $2.93/MMBtu, while wheat on the CBOT is heading for its fourth gain in five sessions as higher energy and fertilizer costs weigh on the outlook for agricultural production.
- The BoJ maintains its course of monetary tightening: The Summary of Opinions indicates a readiness for further rate hikes, although oil-driven inflation and the risk of stagflation are still cited as dampening factors.
- Deputy Finance Minister Atsushi Mimura threatened “decisive action” against speculative moves in the yen—a clear escalation in interventionist rhetoric, backed by Governor Ueda’s remarks on the growing importance of the exchange rate for inflation.
- USD/JPY has slipped from around 160.50 to ~159.72 (-0.35%) – the yen is the strongest currency on the forex market today; the USDIDX dollar index has fallen below 100 points (-0.11%). The currencies of the Antipodes and the CAD are performing the weakest.
