What about the ceasefire?
Tonight was supposed to conclude a ceasefire between Iran and the USA. However, as many analysts point out, there was not much to conclude, because that agreement has long since ceased to exist.
The throughput of the Strait of Hormuz is purely symbolic – only a few individual ships cross it each day. On one hand Iran shoots at passing units without permission. Yesterday there was another such incident, which will probably again affect insurance costs and halt shipping. On the other hand US forces still stop ships that cross the blockade.
It is worth noting that Americans are not currently continuing missile attacks on Iranian territory. Tonight, however, a post appeared informing of an extension of the ceasefire. This time it is to be in effect indefinitely, for the duration of negotiations.
How does oil react?
Investors are not taking this situation as calmly as before. As a result of increased tensions and the expectation of the US President’s post on his social media – which are currently probably his main communication channel – oil price rose.
Until the “clarification of the situation” the price of a Brent barrel jumped up 6 USD. After the decision itself it fell, but only by 3 USD. We are therefore currently around 98 USD per barrel, not 95 USD as before. Yesterday the current contracts for oil in the USA ended and new ones opened.
This event, despite some investor doubts, did not affect the markets. However, the huge premium of WTI over Brent, which is the global benchmark, remains.
However, one must remember that price increases in the USA are more painful, because fuel prices are much more dependent on the cost of the raw material due to lower taxes. As a result, the percentage price increase of fuels is higher in the USA than in Poland and would be, even if there were no temporary VAT cut in Poland.
What about currencies?
Tensions were also seen in the foreign exchange market. In the evening the dollar strengthened against the euro. The reason was, of course, expectations of escalation of the current situation. Like with oil, however, there was a correction and by today’s morning about half of that movement was negated.
The Polish zloty and other currencies of our region reacted similarly.
First, with the rise in tensions, investors withdrew from this part of the world. Then capital returned, but not on such a scale that currencies returned exactly to the starting point.
The euro rate first jumped 1.5 cents from 4.23, but returned only 1 cent. Changes are also seen in the bond market. With the withdrawal of investors, the yields of Polish bonds rose. They were selling Polish bonds.
Today in the macroeconomic calendar it is worth paying attention to the decision of the Central Bank of Turkey at 13:00 regarding interest rates.
