The big news overnight came once again out of the US as President Trump announced that they will be pulling out of the 2015 Nuclear Accord and will be reimposing sanctions against Iran that had been waived by the deal. Oil had been trading wildly ahead of the announcement on the back of conflicting rumours about the Presidents intentions but he came out in line with most of what he previously indicated about the deal. Expect to see downside risk examined as we progress through the day as other international players respond to this latest development adding further uncertainty to the market. Iran advised that it will look to renegotiate with the other signatories and ominously warned that it could resume enriching uranium within weeks.
Earlier in the day the Fed President Jerome Powell gave his central bank a pat on the back saying that it’s recent tightening cycle had proceeded without disruption and investor expectations are well aligned with the Fed’s. The dollar continued to grind higher throughout the session and the bench mark US 10 yr yield once again traded up towards 3%.
Looking ahead to today’s trading and investor focus will firmly on the next developments in the various live Geo-Political concerns across the market, mainly centring around US trade. It’s quiet on the fundamental date front across the Asian and London sessions but traders will be closely monitoring the US PPI data due for release near the open of the New York day and the US Crude Oil Inventories later in the session.