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Last week saw a rise in risk assets and equities as optimism grew over a potential US-Iran peace deal, while energy prices declined. The S&P 500 and NASDAQ 100 indices gained momentum amid improved geopolitical sentiment, whereas Brent crude oil and gasoline prices fell due to reduced supply concerns. The AUD/USD pair also showed strength, reflecting improved risk appetite. This week’s focus shifts to a critical Trump war deadline on Thursday, which could trigger market volatility if no progress is made.
For traders, the interplay between geopolitical developments and asset prices remains pivotal. A breakthrough in US-Iran negotiations could further boost equities and weaken safe-haven assets like gold. Conversely, a failure to resolve tensions might see energy prices rebound and risk assets retreat. The AUD/USD pair is particularly sensitive to risk-on/risk-off sentiment, making it a key currency to monitor.
Investors should watch for policy responses from central banks, especially the Federal Reserve, as well as any shifts in oil market dynamics. The upcoming Trump deadline adds uncertainty, and traders may need to adjust positions based on real-time geopolitical updates. Energy traders should also assess how supply chain disruptions might affect Brent crude and gasoline prices.
