{"id":150416,"date":"2019-06-27T08:55:51","date_gmt":"2019-06-27T12:55:51","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=150416"},"modified":"2019-06-27T08:07:42","modified_gmt":"2019-06-27T12:07:42","slug":"equities-down-oil-up-as-iran-tensions-flare-2","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/06\/equities-down-oil-up-as-iran-tensions-flare-2\/","title":{"rendered":"Equities Down & Oil Up As Iran Tensions Flare"},"content":{"rendered":"
June 27, 2019<\/div>
\r\n<\/div><\/div>

By <\/strong>Orbex<\/strong><\/a><\/p>\n

Risk assets have traded higher across the board<\/strong>\u00a0so far this week as traders respond to the increasing tensions between the US and Iran. The only\u00a0exemption is the equities markets as policymakers toned down expectations for aggressive easing.<\/strong><\/p>\n

On Monday, president Trump announced a fresh wave of\u00a0\u201c<\/strong>hard-hitting\u201d<\/strong>\u00a0sanctions. This time, their\u00a0exclusive aim is to negatively\u00a0impact Iran\u2019s supreme leader Ali Khamenei.<\/strong><\/p>\n

The sanctions are designed to restrict the supreme leader, his office, as well as his closest associates, from accessing key capital resources.<\/p>\n

Trump Announces Fresh Sanctions<\/strong><\/h2>\n

Commenting on the new sanctions,\u00a0President Trump said:<\/strong><\/p>\n

\u201cThese measures represent a strong and proportionate response to Iran\u2019s increasingly provocative actions\u2026 We do not seek conflict with Iran or any other country\u2026 I can only tell you we cannot ever let Iran have a nuclear weapon.\u201d<\/p><\/blockquote>\n

Senior Iranian Figures Targeted<\/strong><\/h2>\n

A statement released by the US Treasury explained that\u00a0the new sanctions target eight senior naval commanders. They also target key aerospace and ground force personnel.<\/strong>\u00a0The statement said:<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

\u201cThese commanders sit atop a bureaucracy that supervises the IRGC\u2019s malicious regional activities, including its provocative ballistic missile program, harassment, and sabotage of commercial vessels in international waters, and its destabilizing presence in Syria.\u201d<\/p><\/blockquote>\n

The initial reaction from Iran has been one of outrage.\u00a0Majid Takht-Ravanchi, the Iranian ambassador to the UN\u00a0<\/strong>said:<\/p>\n

\u201cNo one in clear mind can have a dialogue with somebody who is threatening you with sanctions. As long as that is still there, there is no way we can have a dialogue.\u201d<\/p><\/blockquote>\n

Iranian President Insults Trump<\/strong><\/h2>\n

Tensions increased further as\u00a0Iranian president Hassan Rouhani claimed that Trump suffered a \u201cmental disorder.\u201d\u00a0<\/strong><\/p>\n

He described the sanctions as \u201coutrageous and idiotic\u201d<\/strong>\u00a0given that the supreme leader, who is in his 80s, has no overseas assets nor intentions to travel to the US.<\/p>\n

However,\u00a0US secretary of state Mike Pompeo told reporters:<\/strong><\/p>\n

\u201cThe supreme leader\u2019s office has enriched itself at the expense of the Iranian people\u2026 It sits atop a vast network of tyranny and corruption that deprives the Iranian people of the freedom and opportunity they deserve.\u201d<\/p><\/blockquote>\n

Military Action Still A Threat<\/strong><\/h2>\n

These sanctions come in the aftermath of\u00a0Trump calling back an airstrike that he had ordered last week.<\/strong>However,\u00a0the prospect of military action in the future is still very real<\/strong>\u00a0with Trump saying:<\/p>\n

\u201cI think a lot of restraint has been shown by us, and that doesn\u2019t mean we\u2019re going to show it in the future,\u201d<\/p>\n

 <\/p><\/blockquote>\n

The President also\u00a0threatened Iran with \u201cobliteration\u201d<\/strong>\u00a0in response to the Iranian President\u2019s comments made after Monday\u2019s imposition. The sanctions seem retaliatory rather than compliance related.<\/p>\n

Iran did threaten to breach the production limit for Uranium<\/strong>\u00a0last month though, but only to persuade other countries amid the impact of earlier US sanctions. Still, this shouldn\u2019t provoke the US to impose sanctions, nor should a drone shootdown be the equivalent to war.<\/p>\n

But the situation worsens day in day out as Trump seems to be\u00a0shifting his focus away from\u00a0trade wars<\/a>, and onto a real catastrophic war!<\/strong><\/p>\n

Market Reaction<\/strong><\/h2>\n

SPX500<\/strong><\/h2>\n

\"SPX500\"<\/a><\/p>\n

Equities prices have started to come off a little this week. Following an earlier surge to fresh all-time highs in the SPX500 last week, fuelled by a dovish FOMC meeting, we\u2019ve seen price dipping back below the prior 2958.68 level high. With the US economy already under the strain of the softening trade war with China and the prospect of a military conflict becoming more alarming for markets,\u00a0volatility increases<\/strong>.<\/p>\n

Despite the focus of the likelihood of further Fed easing being taken off for a while, which had been supporting prices earlier, James Bullard\u2019s comments on a\u00a0non-aggressive easing<\/strong>\u00a0only on Wednesday pushed prices a tad lower. Despite being bullish today, SPX is likely to end the week on the negative.<\/p>\n

Below here, the next big support level is the broken 2018 high of 28.78.66. If held, it should keep focus on a continued push higher. Below there, the next major structural support is back down at the 2817.26 level, which would represent a\u00a0disappointing reversal for bulls.<\/strong><\/p>\n

USOIL<\/strong><\/h2>\n

\"USOIL\"<\/a><\/p>\n

Crude prices<\/a>\u00a0have been supported as a result of the increase in tensions<\/strong>. Conflict in the Middle East has typically kept oil well bid\u00a0on expectations of supply disruptions<\/strong>\u00a0and crude is now back above the 57.34 level. The next topside level to watch is the 60.01 zone where we have previous structure, offering resistance, as well as the bearish trend line from 2019 highs. A break back above this zone would put focus on a move back up to 63.72 next. It is still not clear if Wednesday\u2019s price action \u2018tagged\u2019 the $60\/barrel level.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Risk assets have traded higher across the board\u00a0so far this week as traders respond to the increasing tensions between the US and Iran. The only\u00a0exemption is the equities markets as policymakers toned down expectations for aggressive easing. On Monday, president Trump announced a fresh wave of\u00a0\u201chard-hitting\u201d\u00a0sanctions. This time, their\u00a0exclusive aim is to negatively\u00a0impact […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-150416","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150416","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=150416"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150416\/revisions"}],"predecessor-version":[{"id":150426,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150416\/revisions\/150426"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=150416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=150416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=150416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}