Category: AUD

Asset Summary – Friday, 24 April

US DOLLAR experienced a mixed trading session, initially rising before retracing some gains. Optimism surrounding potential progress in US-Iran negotiations, indicated by reports of upcoming talks in Islamabad, and the extension of the ceasefire in Lebanon, weighed on the dollar. However, earlier in the week the dollar saw gains. The ongoing impasse in US-Iran relations and the vulnerability of the Strait of Hormuz are contributing to upward pressure on oil prices. This is fueling inflation concerns which are causing investors to re-evaluate the future path of interest rates. The Federal Reserve is expected to hold steady on interest rates in the upcoming meeting, with expectations of no further adjustments for the rest of the year.

BRITISH POUND is gaining value as positive developments in US-Iran negotiations ease geopolitical risk, and strong domestic factors fuel upward momentum. Rising inflation expectations among UK businesses, alongside better-than-anticipated retail sales figures, are strengthening the case for the Bank of England to raise interest rates. The combined effect of these factors suggests a potential for further appreciation of the pound, supported by both external and internal economic forces.

EURO is experiencing upward pressure, recovering from recent lows, primarily driven by speculation regarding potential advancements in US-Iran negotiations. Optimism surrounding these talks, fueled by reports of a possible breakthrough, is contributing to the euro’s renewed strength. Looking ahead, the upcoming ECB policy meeting will be crucial, as the central bank evaluates economic data, geopolitical tensions in the Middle East, and their potential impact on future monetary policy. While the ECB remains cautious, market expectations are building for future interest rate hikes, suggesting confidence in the Eurozone’s economic outlook in the medium term.

JAPANESE YEN faces continued downward pressure as it approaches a key psychological level against the US dollar. Despite verbal warnings of intervention by Japanese authorities and a recent uptick in core inflation, the currency is weakening, driven by rising energy costs and the broader uncertainty stemming from geopolitical tensions in the Middle East. The Bank of Japan is expected to maintain its current monetary policy stance, further contributing to the yen’s vulnerability, particularly as Japan relies heavily on imported energy and is susceptible to inflationary pressures from global events.

CANADIAN DOLLAR is gaining value, as evidenced by the recent decline in the USD/CAD exchange rate. This indicates that it now takes fewer Canadian dollars to purchase one US dollar compared to the previous trading day. Further bolstering this observation, the Canadian dollar has appreciated against the US dollar over both the past month and the past year, signaling a sustained strengthening trend.

AUSTRALIAN DOLLAR faces downward pressure as global risk sentiment deteriorates due to ongoing Middle East tensions, impacting Asian equities and boosting demand for the US dollar as a safe haven. Concerns about energy supply disruptions further contribute to this negative outlook. However, the potential for an interest rate hike by the Reserve Bank of Australia, driven by a strong labor market and inflation, limits potential losses. Furthermore, a forthcoming economic security agreement between Japan and Australia, encompassing key commodities, offers some support to the currency’s value. Upcoming inflation data will be crucial in shaping future policy expectations and influencing the Australian Dollar’s trajectory.

DOW JONES is likely to experience mixed influences. While positive earnings reports, particularly from companies like P&G, could provide upward momentum, the stagnation in US-Iran negotiations and the resulting surge in energy prices might act as a counterweight. The flat performance of Dow futures suggests a cautious outlook, indicating that gains may be limited compared to indices more heavily weighted towards the technology sector, which is currently benefiting from strong AI-related earnings. Therefore, the Dow Jones’s performance may be less pronounced than that of the S&P 500 or Nasdaq.

FTSE 100 faces downward pressure amid geopolitical tensions surrounding US-Iran talks and the Strait of Hormuz, impacting sectors like banks, defence, pharma, and mining. Mondi’s cautionary outlook on rising costs further contributes to the negative sentiment. While positive retail sales data offers some support, concerns raised by a Bank of England policymaker about potential market corrections due to economic slowdown, private credit stress, and AI-driven repricing add to the overall bearish outlook, resulting in a weekly decline for the index. Energy and consumer stocks may offer some resilience due to higher oil prices.

DAX is facing downward pressure due to geopolitical uncertainties stemming from stalled US-Iran peace talks and ongoing disruptions in the Hormuz Strait. President Trump’s extension of the Lebanon-Israel truce provides temporary relief, but oil price volatility persists. The mixed earnings season is also impacting the index, with weakness in aerospace and defense contrasting with strength in technology. Specific company performance, such as declines in MTU Aero Engines and Airbus, weigh on the index, while SAP’s positive results provide some support. Corporate restructuring plans from Bayer and shareholder scrutiny for Merck add to the market’s cautious sentiment, contributing to the index’s weekly decline.

NIKKEI experienced a notable surge, reaching a new record high as investors reacted to recent inflation data and looked ahead to the Bank of Japan’s upcoming policy meeting. The rise in core inflation, although still under the central bank’s target, contributed to market sentiment. Anticipation is that interest rates will remain stable amidst global uncertainties, particularly those stemming from the Middle East and their impact on energy prices. Technology stocks played a significant role in the index’s gain, demonstrating strength across several key companies. Overall, the index showed positive weekly performance, contrasting with the broader Topix index.

GOLD’s price is experiencing volatility influenced by geopolitical developments and macroeconomic factors. Tentative hopes for progress in US-Iran negotiations offer some upward pressure, with potential breakthroughs cited in Pakistani government sources; however, skepticism remains due to limited progress in prior talks and President Trump’s cautious stance. Counteracting this upward pressure, gold is on track for a weekly decline as peace negotiations have stalled. Furthermore, the closure of the Strait of Hormuz is contributing to higher energy prices, exacerbating inflation concerns and raising the likelihood of interest rate hikes, which negatively impact the appeal of gold as a non-yielding asset. Consequently, the outlook for gold is uncertain, dependent on the interplay between these conflicting factors.

OIL experienced a downturn, retreating to $94.8 a barrel, ending a series of gains as optimism surrounding potential US-Iran diplomatic progress surfaced. The possibility of a negotiated resolution, potentially facilitated by Pakistan, injected uncertainty into the market. While prices dipped, oil is still poised for a substantial weekly increase of approximately 14%, indicating underlying market strength. US policy, specifically the ongoing naval blockade of Iranian ports, continues to significantly impact the global supply, maintaining pressure despite diplomatic overtures. Furthermore, activity involving sanctioned Iranian oil tankers near the Strait of Hormuz emphasizes persistent geopolitical risks that can influence supply chains and prices.

Asset Summary – Thursday, 23 April

US DOLLAR is seeing support as geopolitical tensions between the US and Iran persist, driving demand for safe-haven assets. The ongoing closure of the Strait of Hormuz and seizure of vessels by Iran, coupled with the US blockade, are contributing to higher energy prices and inflation concerns, which, in turn, are influencing expectations for the Federal Reserve to maintain current interest rates. A temporary truce between the US and Iran remains in place, with Washington awaiting a new peace proposal. All eyes are on upcoming US jobless claims and PMI data, which will offer further insights into the health of the US economy.

BRITISH POUND is experiencing a complex situation influenced by both geopolitical and domestic economic factors. While the currency has shown resilience in rebounding from initial losses to around $1.35, its position remains vulnerable due to ongoing tensions between the US and Iran, which inject uncertainty into global markets. Stronger-than-expected UK PMI data offers some support, indicating a rebound in business activity; however, this positive effect is tempered by concerns that the improvement is driven by stockpiling, potentially masking underlying economic weaknesses. Adding to the pressure, domestic political turmoil surrounding Keir Starmer could further undermine investor confidence and weigh on the pound’s value.

EURO faces downward pressure due to a confluence of factors. Geopolitical tensions in the Strait of Hormuz, specifically the ongoing conflict between the US and Iran and stalled diplomatic progress, are driving up energy costs and creating economic uncertainty. This has negatively impacted the Eurozone’s private sector, leading to contraction, and has prompted Germany to significantly reduce its growth forecast. The combination of higher energy prices, weakened consumer demand, and a struggling services sector suggests a challenging economic environment for the Eurozone, contributing to the currency’s depreciation against the dollar.

JAPANESE YEN is currently trading with weakness against the dollar, influenced by speculation surrounding the Bank of Japan’s upcoming policy meeting. Expectations are that the BOJ will likely maintain current interest rates in the short term but may hint at future policy normalization, potentially around June. Revised inflation and growth forecasts, reflecting higher energy costs and geopolitical instability stemming from the Middle East, are also expected. Positive export data, driven by demand from China and ASEAN countries, offers some support, but this is offset by a stronger US dollar driven by geopolitical concerns and stalled US-Iran talks. This combination of factors suggests continued pressure on the yen in the near term.

CANADIAN DOLLAR is currently trading at a rate that indicates a slight weakening against the US Dollar in the most recent session. However, assessing its performance over a longer period reveals a stronger trend. The Canadian Dollar has appreciated moderately against the US Dollar in the past month and shown even more considerable gains over the last year, suggesting an overall strengthening position in the currency market.

AUSTRALIAN DOLLAR is exhibiting resilience, trading near multi-year highs despite global uncertainties. Support for the currency stems from encouraging domestic economic indicators, with recent PMI data signaling a rebound in manufacturing and services activity. This suggests underlying strength in domestic demand. However, the Australian dollar’s movements are being tempered by geopolitical tensions, particularly in the Middle East, where disruptions to shipping lanes and ongoing diplomatic efforts involving Iran introduce a degree of caution. The market is closely watching these developments for potential impacts on global trade and commodity prices, factors which could influence the currency’s direction.

DOW JONES is facing downward pressure due to geopolitical tensions between the US and Iran. The lack of progress in resolving the conflict is contributing to a decline in futures contracts, suggesting a likely drop in value. Rising energy prices, fueled by Iran’s actions in the Persian Gulf, further dampen optimism about US economic growth and potentially lead to higher interest rates, negatively impacting the index. Furthermore, weakness in credit-sensitive sectors and profit-taking in the tech sector, exemplified by declines in companies like Tesla and ServiceNow, are also weighing on the Dow Jones’s outlook, even as positive guidance from companies like Texas Instruments provides a limited counterweight.

FTSE 100 experienced a decline, influenced by geopolitical tensions and rising oil prices. Concerns regarding the potential impact of the Middle East conflict on consumer behavior and corporate profitability, exemplified by Sainsbury’s warning, contributed to the downward pressure. Dividend adjustments for companies like Fresnillo and BAE Systems further weighed on the index. However, positive revenue growth reported by the London Stock Exchange Group offered some counterweight, while a reduced UK budget deficit provided a slightly more optimistic economic backdrop.

DAX is facing downward pressure as investor sentiment turns cautious due to geopolitical uncertainties stemming from the Middle East conflict and the consequent rise in energy prices. A contraction in Germany’s private sector, driven by inflationary pressures related to the Iran war, further contributes to this negative outlook. Specific company performances are also impacting the index, with declines in SAP, Scout24, Deutsche Bank, Qiagen NV, and Fresenius SE & Co weighing heavily. However, gains in Infineon, fueled by positive results from a competitor, provide some counterbalance to the overall negative trend.

NIKKEI experienced a decline, influenced by geopolitical tensions and anticipation surrounding the Bank of Japan’s upcoming policy meeting. Heightened uncertainty stemming from stalled US-Iran peace talks and the ongoing situation in the Strait of Hormuz are weighing on investor sentiment and contributing to risk aversion. Losses in significant companies across various sectors further contributed to the downward pressure on the index. The market is closely watching the Bank of Japan’s response to the increased economic uncertainty fueled by the Middle East conflict.

GOLD is experiencing downward pressure as geopolitical tensions in the Middle East and the Strait of Hormuz contribute to higher energy prices and inflation concerns. The continued blockage and alleged attacks on commercial vessels have elevated risks, while US sanctions intensify the situation. Despite a temporary truce, the uncertainty surrounding a potential peace proposal from Iran keeps investors wary. This environment of rising energy prices and potential central bank rate hikes has negatively impacted gold, resulting in a roughly 10% decrease in its value since the beginning of the conflict.

OIL is experiencing upward pressure driven by several factors. Stalled diplomatic progress between the US and Iran, coupled with reports of US interception of Iranian oil tankers and Iranian control over the Strait of Hormuz, are restricting supply and creating uncertainty. The US blockade of Iranian ports further exacerbates these concerns. Furthermore, positive US demand signals, as reflected in declining inventories of refined products, support higher prices. The lack of imminent peace talks between the US and Iran contributes to the expectation that these supply constraints will persist, further bolstering the commodity’s value.

Asset Summary – Wednesday, 22 April

US DOLLAR is experiencing mixed signals impacting its potential direction. Support stems from the continuation of the Strait of Hormuz blockade and a Federal Reserve nominee advocating for an independent and potentially hawkish monetary policy. This is counteracted by uncertainty surrounding lasting peace negotiations between the US and Iran and Iran’s naval activity in the Strait of Hormuz, which tempers any significant upward momentum. With the Federal Reserve’s upcoming monetary policy decision expected to maintain current interest rates, the dollar’s trajectory will likely depend on developments regarding geopolitical tensions and the credibility of future peace talks.

BRITISH POUND experienced an increase in value, reaching $1.352, influenced by a combination of factors. The potential de-escalation of conflict in the Middle East created a more favorable risk environment for the currency. Domestically, UK inflation figures played a significant role, with headline inflation exceeding expectations due to rising petrol costs linked to the geopolitical tensions. However, a slight dip in core inflation and an uptick in services inflation presented a mixed picture. Consequently, market expectations for future Bank of England interest rate hikes have been slightly tempered, although two rate increases are still largely anticipated, suggesting continued support for the pound.

EURO gained ground against the dollar as geopolitical tensions surrounding the Middle East eased slightly due to a prolonged ceasefire, fostering a more positive market sentiment. While the US maintains a naval blockade, reported hints of flexibility from the US side regarding the Iran situation further bolstered the Euro. Simultaneously, moderating expectations for European Central Bank interest rate hikes, influenced by lower oil prices and the tentative US-Iran truce, appear to be having a limited dampening effect, as the market still anticipates rate increases this year, supporting the currency’s value.

JAPANESE YEN faces a complex outlook, trading around 159.2 per dollar amid anticipation for the Bank of Japan’s upcoming meeting. The central bank is expected to maintain current interest rates while evaluating the economic consequences of the Middle East conflict, although a potential shift towards policy normalization in June remains a possibility. Revised inflation forecasts upward alongside lower growth projections, influenced by escalating energy costs and the broader impact of the Iran war, are also anticipated. While Japanese exports have shown resilience, driven by demand from China and ASEAN countries, the yen is also reacting to a strengthening US dollar due to the stalled US-Iran peace talks, adding further pressure.

CANADIAN DOLLAR is experiencing mixed signals, with the USD/CAD exchange rate showing a slight increase in the latest session. Despite this recent dip, analysis indicates the Canadian Dollar has demonstrated overall strengthening, having gained value against the US Dollar in both the past month and the past year. This suggests an underlying upward trend for the Canadian Dollar, even with day-to-day fluctuations.

AUSTRALIAN DOLLAR is exhibiting upward pressure, fueled by a combination of international tensions and domestic monetary policy expectations. Geopolitical uncertainty surrounding US-Iran relations appears to be benefiting the currency, while strong signals from the Reserve Bank of Australia, emphasizing their focus on controlling inflation through potential interest rate hikes, are bolstering market confidence. Upcoming economic data releases, particularly purchasing managers’ index figures, will be crucial in validating the anticipated economic strength and further influencing the currency’s trajectory. Expert surveys suggest a generally positive, albeit modest, outlook for the AUD, with predictions centering around $0.71-$0.72 by year-end.

DOW JONES is poised to benefit from positive market sentiment as indicated by rising equity futures. The indefinite extension of the ceasefire with Iran alleviates concerns about escalating geopolitical tensions and potential disruptions to the global energy market, reducing risk aversion among investors. Strong earnings reports and guidance from major companies like AT&T and GE Vernovia, along with gains in AI-related stocks such as Amazon, Oracle, and Microsoft, further contribute to a risk-on environment, suggesting a potential upward trajectory for the index. Positive movement from Tesla ahead of its earnings report adds another factor that could boost the Dow.

FTSE 100 is facing headwinds, demonstrated by a period of slight decline driven by investor hesitancy related to geopolitical tensions surrounding US-Iran talks, growing inflationary pressures, and the reception of mixed corporate earnings reports. Losses in major companies such as Reckitt Benckiser and JD Sports are exerting downward pressure. Conversely, gains in BP and mining stocks, including Rio Tinto and Fresnillo, are providing some support, partially offsetting the negative influences. The latest UK inflation data, showing an increase to 3.3%, adds to concerns and may further dampen investor sentiment.

DAX is exhibiting a mixed outlook. Tech stocks are providing upward momentum, evidenced by gains in Infineon and Siemens driven by positive sector news. However, geopolitical tensions in the Middle East, specifically regarding the US-Iran conflict and potential disruptions in the Strait of Hormuz, are creating uncertainty and could weigh on investor sentiment. Additionally, the decline in Deutsche Telekom following merger reports introduces a negative element. The overall direction of the DAX hinges on the interplay between positive corporate performance in the tech sector and the dampening effects of international political and economic instability.

NIKKEI’s performance indicates a mixed outlook driven by both domestic and international factors. Despite positive export data fueled by Chinese and ASEAN demand, a lower-than-expected trade surplus tempered enthusiasm. Geopolitical uncertainty stemming from failed US-Iran peace talks and continued trade tensions added to market unease. Anticipation of the Bank of Japan’s upcoming policy decision, where interest rates are expected to remain unchanged, further contributed to investor caution. Individual stock movements reflected this uncertainty, with gains in technology-related stocks partially offset by declines in financial and retail sectors, suggesting a lack of clear market direction.

GOLD is experiencing a period of fluctuating value influenced by geopolitical developments and monetary policy considerations. The initial surge past $4,750 was triggered by a de-escalation in tensions between the US and Iran, specifically Trump’s extension of a ceasefire. However, the collapse of planned peace talks and Iran’s stance on the Strait of Hormuz introduce continued uncertainty, potentially limiting further gains. Downward pressure is also exerted by the anticipation of a new framework to combat inflation under a confirmed Federal Reserve Chair, which could temper gold’s safe-haven appeal and overall demand. The conflicting forces suggest that gold’s price is vulnerable to news events.

OIL is experiencing upward price pressure as geopolitical tensions intensify near Iran. Attacks on commercial vessels in the region, attributed to Iranian forces, are disrupting maritime traffic and exacerbating existing supply concerns. This disruption, coupled with ongoing US-Iran tensions regarding naval activity and sanctions, contributes to anxieties about constricted oil flow, particularly impacting supply to Asia. Estimates of demand destruction linked to these issues are significant, further fueling concerns about market stability and supporting higher prices.

Asset Summary – Tuesday, 21 April

US DOLLAR is experiencing mixed pressures, leading to uncertainty in its near-term valuation. Hopes for a US-Iran peace agreement are weighing on the dollar as reduced geopolitical tensions diminish its safe-haven appeal. The involvement of high-level US and Iranian officials in upcoming talks could signal progress, further dampening demand. Conversely, President Trump’s threat to end the truce and maintain the Strait of Hormuz blockade if no deal is reached provides potential upside for the dollar should negotiations fail. Easing oil prices contribute to a less hawkish outlook for Federal Reserve policy, suggesting that interest rates are expected to stay level. Confirmation hearings for a potential new Fed leader introduce another element of uncertainty, as any shift in monetary policy views could impact dollar valuation.

BRITISH POUND faces a mixed outlook, constrained by both domestic political uncertainty and escalating international tensions. The revelation surrounding a controversial ambassadorial appointment adds to a sense of political instability that could weigh on investor confidence. Simultaneously, rising geopolitical risks, particularly concerning Iran, introduce external pressures that may limit upward momentum. Recent UK jobs data, while showing some positive trends, is considered outdated and unlikely to significantly influence trading decisions, leaving the currency susceptible to shifts in political and geopolitical sentiment.

EURO faces downward pressure as geopolitical instability in the Middle East and a cautious stance from the European Central Bank weigh on investor confidence. Heightened tensions threaten energy supplies and supply chains, exacerbating existing economic uncertainties within the Eurozone. The ECB’s acknowledgment of a fragile outlook and potential energy supply shocks further dampens the prospect of near-term Euro appreciation, especially with investor sentiment already at a low point.

JAPANESE YEN is facing downward pressure as the Bank of Japan (BOJ) appears hesitant to adjust its monetary policy significantly in the near term. While the BOJ may hint at future policy normalization, its immediate focus is on assessing the economic impact of the Middle East conflict, particularly rising energy costs. The expected reduction in growth projections coupled with increased inflation forecasts adds to the Yen’s vulnerability. The currency’s slight recovery is linked to easing oil prices and a weaker dollar, factors influenced by US-Iran peace negotiations that could alleviate Japan’s energy import burden.

CANADIAN DOLLAR is gaining value, recently reaching a one-month high against the USD, fueled by rising oil prices and a potentially aggressive monetary policy stance from the Bank of Canada. Geopolitical tensions impacting global energy supplies are contributing to increased foreign exchange inflows into Canada due to its significant energy exports. This, coupled with inflationary pressures and the Bank of Canada’s commitment to combatting entrenched inflation linked to energy costs, is bolstering the currency’s performance relative to other major currencies, even as global demand for the US dollar as a safe haven increases.

AUSTRALIAN DOLLAR is experiencing upward pressure, trading near multi-year highs, largely influenced by geopolitical tensions and domestic economic factors. Uncertainty surrounding the US-Iran conflict, particularly regarding the ceasefire and potential supply disruptions in the energy market, is contributing to inflationary concerns globally, which in turn is strengthening currencies tied to countries expected to raise interest rates. Australia’s strong labor market is reinforcing expectations of a rate hike by the Reserve Bank, further supporting the currency. Traders are closely watching upcoming PMI data for indications of the Australian economy’s ongoing performance, which could further solidify expectations for monetary policy tightening and consequently, bolster the Australian dollar.

DOW JONES is positioned to potentially benefit from overall market optimism driven by factors such as easing concerns over the Iran conflict and positive earnings reports from major companies like GE Aerospace and UnitedHealth. These elements contribute to a favorable environment for the index. However, stronger-than-expected economic data, reflected in higher core retail sales and ADP employment figures, is pushing yields upward, which could present a headwind. Amazon’s investment in Anthropic also signals broader market confidence. While the change in Apple’s leadership to John Ternus appears to be neutral in the short term.

FTSE 100 experienced minimal movement following a previous decline, with market sentiment cautiously optimistic due to potential progress in Middle East peace negotiations. Losses in the pharmaceutical sector, particularly AstraZeneca and GSK, weighed on the index, while Associated British Foods’ restructuring announcement triggered a significant drop in its share price. Gains in utilities, led by SSE and Centrica, provided some positive momentum, as did Experian’s appointment of a new chair. Mixed UK economic data, showing a decline in unemployment but a slight slowdown in wage growth, contributed to the overall uncertainty and subdued trading activity.

DAX experienced an upward trend, recovering from earlier weakness on positive sentiment surrounding potential US-Iran talks and developments in artificial intelligence. Certain sectors, particularly chemicals and software, demonstrated strong performance, driven by company-specific news such as analyst upgrades and reaffirmed ratings. However, not all sectors participated equally in the gains, with consumer staples and aerospace experiencing downward pressure due to disappointing financial results or company-specific challenges. This mixed performance suggests a potentially volatile trading environment for the index, influenced by both macroeconomic factors and individual company performance.

NIKKEI is demonstrating positive momentum, driven primarily by advancements in the technology and AI sectors. This upward trend is further influenced by declining oil prices, offering economic relief given Japan’s dependence on oil imports. The potential for continued US-Iran peace talks is also creating a supportive environment, as stability in the Middle East is crucial for Japan’s economic outlook. Strong performances from key tech companies like Kioxia Holdings, SoftBank Group, and Tokyo Electron are contributing significantly to the index’s gains.

GOLD’s price is currently suppressed due to several factors tied to the conflict in the Middle East. Uncertainty surrounding negotiations between the US and Iran, particularly the potential for the ceasefire to end and the Strait of Hormuz to remain closed, is creating downward pressure. The energy supply shock resulting from the conflict is fueling inflation fears, which in turn raises the likelihood of interest rate hikes by central banks. This environment of rising rates is generally negative for gold, contributing to its significant decline since the beginning of the Iran war. The outcome of the negotiations and the future of the ceasefire will likely be key drivers of gold’s price in the near term.

OIL’s price is facing downward pressure due to renewed negotiations between Iran and the US, suggesting a potential easing of geopolitical tensions. This contrasts with earlier Iranian reluctance to engage in further talks. However, uncertainty remains high as the US President has indicated the current ceasefire may not be extended without a deal, and the Strait of Hormuz, a crucial oil transit route, remains a point of contention. Threats of continued blockage and ongoing disputes over Iran’s nuclear program and regional activities are creating volatility, potentially limiting further price declines but also hindering significant gains. The situation in the Strait of Hormuz will be key to the market direction.