investingLive European markets wrap: Oil drops as steady optimism continues to flow

Headlines:

• Oil prices remain under pressure amid US-Iran deal optimism. What’s next?
• Markets keep with the more optimistic view in the final stretch of the week
• Gold struggles to gain steam amid US-Iran optimism as neutral Fed caps momentum
• IEA chief Birol says release of more emergency oil reserves is under consideration
• How have interest rate expectations changed after this week’s events?
• BoE’s Breeden: Iran war raises risk that vulnerabilities could crystallise
• Euro area trade balance moves back to surplus in February just before US-Iran conflict

Markets:

• Brent crude down 3% to $96.40
• WTI crude (May contract) down 3.5% to $91.30, WTI crude (June contract) down 3.5% to $88.00
• June contract for WTI has more open interest and volume, provides a better read on “front-month” price
• S&P 500 futures up 0.2%, major indices in Europe up 0.1% to 0.5%
• US dollar mixed but lightly changed across the board
• US 10-year yields down 1 bps to 4.30%
• Gold flat at $4,790, Silver up 1.1% to $79.30

It’s another slow session in Europe as markets are caught waiting on more US-Iran headlines before wanting to proceed.

But despite the trepidation, the steady optimism continues to flow this time around ahead of the weekend. Traders and investors look to be expecting good news to come, as peace talks are expected to show progress before the ceasefire deadline on 22 April.

Oil prices are sitting lower amid the better market mood, in spite of the fact that the Strait of Hormuz situation remains the same. The strait looks poised to enter its eighth straight week in de facto closure but market players are keeping the faith that the situation will be resolved sooner rather than later.

Brent crude is down by around 3% to $96.40 while “front-month” WTI crude is down 3.5% to $88.00 on the day. The June contract is arguably the better indicator of front-month pricing, with volume and open interest overtaking the May contract. The latter is still very much in play though, with the cutoff date only coming on 20 April next week.

In other markets, equities are continuing to fuel the optimism as investors push up stocks following Wall Street gains. The DAX is up 0.5% and CAC 40 up 0.3%, while S&P 500 futures are seen up 0.2% on the day as well.

As for major currencies, there wasn’t much action with the dollar kept on a tight leash and mostly little changed. EUR/USD is up 0.1% to 1.1795 while USD/JPY is flat at 159.15 on the day, not offering much.

Elsewhere, gold is flat at $4,790 while silver is up 1.1% to $79.30 as precious metals are also waiting to take a cue from the broader market mood.

With the weekend set to arrive, it’s all on whether there will be any positive/negative murmurs before markets take a breather from the chaos.

This article was written by Justin Low at investinglive.com.