The U.S.-Iran agreement brings peace closer and is triggering significant shifts in international markets.
A first, very important step—toward the agreement to be signed in Switzerland on Friday—with traders acting on the logic that the beginning is half the battle.
Understandably, the reaction of traders worldwide was almost reflexive, with oil prices “plummeting” and stocks “soaring.” However, the two sides are beginning 60 days of negotiations to resolve key issues, primarily the nuclear program—which is of direct concern to Israel.
Based on the contents of the memorandum, the primary focus for international trade and the economy is the gradual reopening of the Strait of Hormuz—with Tehran not imposing tolls during these 60 days. The market remains cautious, with 600 ships waiting to exit the Strait.
Brent at $83.59, WTI at $80.80, the 10-year at 4.434%, the 30-year at 4.937%, the VIX/CBOE at 17.78 points, and S&P 500 futures up 1.27%. This followed a rally in Asian markets, with DAX 30 futures in Frankfurt trading at a wide premium.
Given that many players positioned themselves in anticipation starting in the middle of last week—most heavily on Friday—today’s session requires caution regarding its short-term outlook. It is likely that some positions bought at significantly lower prices on Wednesday and Thursday will be sold at the highest possible prices today.
In practice, for the DAX30, trading has occurred within a 400-point range—meaning that the upper and lower limits will serve as reference points today. Similarly, on Euronext Athens, significant trading took place on the General Index between 2,350 and 2,444 points, primarily in bank stocks as well as many blue chips.
Given the banking-heavy nature of our stock market, the main “battle” between sellers and buyers will take place in the leading sector, specifically in the shares of the four systemic banks.
Eurobank shares traded between €3.866 and €4.14 over the three-day period from Wednesday to Friday, closing at €4.063 as a result of limited profit-taking toward the end of Friday’s session. A similar picture emerged for Piraeus Bank (9.05), National Bank (14.92), and Alpha Bank (3.945).
Exposure of “hot money” was lower in shares of PPC (22.66), Jumbo (22.62), GEK TERNA (44.68), OTE (19.26), Metlen (41.56), Allwyn (13.93), and others is also reflected in the underperformance of blue chips relative to bank stocks.
EuroStoxx Banks futures are trading at a premium—following a spectacular 4.28% gain to 277.95 points on Friday. This trend will influence the short-term players in Athens during the pre-market session.
Depending on the sentiment that develops in Europe, the pre-market session on Wall Street will determine the extent of the reaction and the scope for extending long positions. Considering that the Fed’s first meeting under Kevin Warsh takes place on Wednesday and that traders in New York are “dancing” to the beat of SpaceX.
Most likely, the long trend will persist for stocks of companies benefiting from these developments—in contrast to those that are negatively affected.
The EuroStoxx Europe Total Market Airlines index is at 345.55 (up 5.37%), while the EuroStoxx Oil & Gas index is at 594.45 (down 0.22%).