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The recent tentative US-Iran ceasefire has led to a 'fear trade unwinding,' with the S&P 500 and Nasdaq Composite posting seven consecutive green sessions. This recovery follows a period of heightened geopolitical tension, and historical patterns suggest the momentum could persist. The upcoming week will focus on central bank interventions, particularly from the RBNZ, while investors monitor developments in US-Iran negotiations.
The unwinding of the fear trade has driven risk-on sentiment, boosting equities and potentially impacting forex markets. Traders should watch for shifts in volatility as geopolitical outcomes remain uncertain. Central bank commentary could provide additional direction, especially if policy divergences emerge.
For Gulf investors, the easing of US-Iran tensions may reduce safe-haven demand for gold and the US dollar. However, renewed escalations could reverse this trend. Key indicators to monitor include RBNZ policy statements, oil price movements, and regional geopolitical updates.
