market:
- Gold falls $30 to $2,342
- WTI crude rose 52 cents to $85.54
- US 10-year Treasury yield fell 6.3bps to 4.51%
- S&P 500 falls 1.5%
- Japanese yen leads, Australian dollar lags
What upset me was Sen. Marco Rubio’s warning about how Iran will attack Israel “absent a last-minute development.” During the first minutes of Russia’s war in Ukraine, Mr. Rubio was live-tweeting in great detail what Russia was doing and planning. This shows that he is well-informed at the highest levels of the US, and his comments certainly made the market nervous.
The previously mild anxiety turned into full-blown anxiety in the stock market, with the Nasdaq down 2%. The U.S. dollar also rose broadly, and the yield on the U.S. 10-year Treasury note also fell.
But later in the day, Hezbollah launched a mild rocket attack against Israel, and the market breathed a sigh of relief, thinking this was probably the end. Still, the market is tingling, so we’ll have to wait and see what happens over the weekend or next week.
Gold was caught up in the drama as it rose to record highs, but as risk sentiment deteriorated, the profit-taking cycle ended and it fell $100, leaving a nasty reversal on the charts. All eyes will be on Monday’s rally to see whether the ever-present Chinese buyers will buy the push again.
FX News Wrap April 12th