Stocks on tenterhooks ahead of Trump address on war
Stocks rose slightly on Thursday, the dollar softened and oil fell as investors held their collective breath ahead of a speech by US President Donald Trump that could outline the end of the war in the Middle East and boost risk appetite.
The prospect of an end to the month-long US-Israeli war with Iran lifted global stocks and sent the dollar off recent highs in the past two sessions after a brutal March when rising oil prices roiled risk assets.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose slightly in early trading after posting its biggest one-day gain since November 2022 on Wednesday. Japan’s Nikkei was poised to get off to a strong start.
Trump told Reuters on Wednesday, before his address to the nation at 01:00 GMT on Thursday, that the United States would “get out of Iran pretty quickly” and could return for “pinpoint strikes” if necessary.
Trump and his top officials have offered various timelines for ending the war. The United States could end its military action against Iran in two to three weeks, he said Tuesday.
Analysts and investors will analyze the speech to gauge when and how the Strait of Hormuz, a key fuel shipping route, will reopen and ease a supply bottleneck that has hit Asian economies hard.
“A US exit in the next few weeks would certainly remove a huge layer of tension,” said IG market analyst Tony Sycamore.
“However, this does not automatically guarantee smooth sailing and energy flow in the Strait of Hormuz.
“Iran’s response will be critical, especially if Tehran continues to strengthen its geographical position by imposing tolls or selective inspections of passing tankers and by launching attacks on the energy infrastructures of neighboring countries.”
Iran has repeatedly opened fire on Gulf states, some of which host US bases, and uses the Strait of Hormuz, which carries a fifth of global oil and liquefied natural gas, as leverage.
Rising energy prices in March raised global inflation fears and concerns about slowing growth also undermined sentiment.
The US dollar has been investors’ haven of choice during the turmoil, but expectations of a ceasefire have caused the dollar to weaken this week.
The euro last bought US$1.1591 ($A1.6695) in early trading, holding on to recent gains. The Japanese yen stood at 158.68 per US dollar, just shy of the critical 160 level that traders worry could prompt Tokyo to step in and intervene.
The June Brent contract was down 2.7 per cent at US$101.16 ($A145.70) a barrel, bouncing off a session low of US$98.35 ($A141.65).
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