• US intel agencies are studying how Iran would react to the US declaring victory
• UAE quits OPEC and OPEC+
• US April consumer confidence 92.8 vs 89.0 expected
• US Richmond Fed March composite index +3 vs 0 prior
• US orders chip equipment companies to stop shipments to China’s second-largest chipmaker
• EU replaces its top trade official following deal with Trump
• Iran expected to submit revised peace proposal soon – report
• Trump: Iran has just informed us they want to open Hormuz as soon as possible
• US Case-Shiller February 20-city house price index -0.1% m/m vs +0.2% expected
• ADP weekly NER Pulse 39,250 vs 54,750 expected
• FOMC preview: No move expected as oil shock buries rate-cut hopes

Markets:

• Gold down $84 to $4597
• US 10-year yields up 0.5 bps to 4.34%
• S&P 500 up 35 points to 7138
• WTI crude oil up $3.50 to $99.87
• USD leads, CAD lags

Tuesday was the second day of waiting for some kind of material development in the Iran war but if you read between the lines — and believe the leaks — the prospects of a deal are improving. On the other side, the lack of a deal continues to be a growing problem as WTI crude rose above $100.

The Nasdaq had its worst day in almost a month, though that was only a 1% decline and it wasn’t about the war but a report that OpenAI failed to meet growth and revenue targets it set for itself. That knocked down the AI trade with Nvidia, Broadcom and Micron all falling.

The FX market mostly took it in stride and economic data had no impact. The numbers were generally a tad strong but the focus is elsewhere, though tomorrow’s FOMC could put some attention on inflation and growth.

Gold was beaten up in Europe but steadied at the start of North American trade and bounced from there. It’s still on track for its lowest close since March 28 on fears that rising oil import costs will force emerging markets to defend their currencies with gold sales (or at least less gold buying).

In bonds, there was another 0.5 bps tail in today’s 7-year Treasury sale but the market shrugged that off and the rise in oil. Some of the bids at the long end could be on risk aversion.

As for Trump and Iran, there were positive signs below the surface as Trump’s first message on Iran indicated that Iran has asked to open the Strait and that he believes they can straighten out their leadership. In the leak department, CNN reported that Iran is preparing another offer. That the US didn’t resort to force after the first offer is something of a good sign.

This article was written by Adam Button at investinglive.com.