Investor reactions to Trump agreeing to two-week ceasefire with Iran
April 8 (Reuters) – U.S. President Donald Trump said on Tuesday he had agreed to a two-week ceasefire with Iran, less than two hours before a deadline for Tehran to reopen the Strait of Hormuz or face widespread attacks on its civilian infrastructure.
Oil fell, bonds recovered and stocks rose as the ceasefire was thought to pave the way for a lasting peace and the resumption of Gulf oil and gas exports.
Below are some reactions from investors and analysts:
ANDREW LILLEY, CHIEF PRICE STRATEGIST, BARRENJOEY, SYDNEY:
“We still have a long way to go to get back to where we were before this started. The concern now is that markets are unsure of the extent to which the oil price will return to $75.”
“There’s no shortage of anyone on this little chasm where oil flows, but the equilibrium price remains at $90, which is actually where you eliminate the tail risk that central banks cut.
“This is a scenario that results in permanently higher returns because our infrastructure will be damaged and oil prices will be stickily high in the coming months, meaning we will face higher inflation.”
GEORGE BOUBOURAS, HEAD OF RESEARCH, K2 ASSET MANAGEMENT, MELBOURNE:
“Restocking energy supplies is key for next week, as the conflict could flare up again very quickly. This reduces the likelihood of a recession, especially if more oil, gas and fertilizer flow next week. Markets are always pragmatic and not complacent when examining conflict, and valuations remain compelling from a one-year perspective.”
MARTIN WHETTON, HEAD OF FINANCIAL MARKETS STRATEGY, WESTPAC, SYDNEY:
“This is something that happens all the time. Does this mean people will take new risks? No, it doesn’t.
“(To change things) there actually needs to be lasting peace. People aren’t actually taking risks. This is algorithms doing things.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
“President Trump said he agreed to a two-week ceasefire. Not only is this enough to keep hopes alive that an entire civilization won’t be destroyed, but we may also see oil start flowing through the Strait of Hormuz.
“Is it just kicking it in the road, moving the goalposts, TACO Tuesday or whatever metaphor we want, just for tempers to flare and bombs to fall again? Who knows? But for now it’s good enough to get a positive reaction from the markets.”
(Reporting by Tom Westbrook and Ankur Banerjee in Singapore; Editing by Sumeet Chatterjee)
