Download App

[Trump Postpones Deadline to Tuesday, Markets Await Storm: Crude Oil Falls 1.5%, US Treasury Yields Remain Flat] ⑴ Monday saw relatively calm macro markets, but they may be in the eye of a storm. Trump postponed the Iran deadline to Tuesday, causing crude oil futures to fall 1.5%, stock futures to rise slightly, and US Treasury yields to remain largely unchanged, as Iran allowed Iraqi oil and Qatari LNG to pass through the Strait of Hormuz. ⑵ In an interview with the Wall Street Journal, Trump threatened that "if they don't comply, they will lose all the power plants and all other factories in the country," and moved the deadline to Tuesday. He later posted on social media, "Tuesday at 8 p.m. ET." It is expected that Trump will hold a press conference with the Secretary of Defense and other military officials on Monday afternoon regarding Iran. ⑶ The Wall Street Journal published an article pointing out that the war with Iran is making the US economy more dominant than ever before. The US no longer sees itself as a guarantor of international stability and norms, but rather as a self-serving actor using oil control to enhance its own power. Citigroup economists have lowered their 2018 growth forecast for the Eurozone by 0.4 percentage points, while their forecast for the US is only 0.1 percentage points. (4) Another report states that the uncertainty brought about by the war has changed the way Federal Reserve officials talk about the path of interest rates. Many policymakers previously expected to resume rate cuts this year, but now more people say the Fed may hold rates steady indefinitely. The Fed has told the public for five consecutive years that inflation above target is temporary, and each new shock makes this claim harder to maintain. (5) The trading strategy favors two-way range trading, but looking for selling opportunities on rallies. The expected range for the 10-year Treasury yield is 4.33% to 4.36%. The only data released on Monday is the March ISM Services PMI, with the composite index expected to fall to 55.0 from 56.1 in February. The Treasury will auction $89 billion in 13-week and $77 billion in 26-week Treasury bills at 11:30.