Key Points
- President Trump again baits financial markets with the prospect of a peace agreement.
- Brent Crude (July’26 futures) is testing support at $100 per barrel.
- However, the crude market faces critical shortages even if a peace deal is signed.
- The S&P 500 rallied to a new high at 7365, while the Dow threatens a breakout above 50,000.
- The ISM Services PMI warns that growth is slowing, while soaring prices signal inflationary pressures.
- Lithium is in a strong uptrend, while Copper, Critical Materials, and Uranium show signs of a recovery.
- The RBA hiked rates this week and would like to hold for a while, but rising prices may force further hikes.
ISLAMABAD/WASHINGTON/TEL AVIV, May 7 (Reuters) – U.S. President Donald Trump predicted a swift end to the war with Iran as Tehran considered a U.S. peace proposal that sources said would formally end the conflict while leaving unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.
An Iranian foreign ministry spokesperson cited by Iran’s ISNA news agency said Tehran would convey its response, while Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament’s powerful foreign policy and national security committee, described the proposal as “more of an American wish-list than a reality.”
“They want to make a deal. We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make a deal,” Trump told reporters in the Oval Office on Wednesday, saying later “it’ll be over quickly.”
Trump has repeatedly played up the prospect of an agreement to end the war that started on February 28, so far without success. The two sides remain at odds over a variety of difficult issues, such as Iran’s nuclear ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world’s oil and gas supply.
A Pakistani source and another source briefed on the mediation said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift U.S. sanctions on Iran and set curbs on Iran’s nuclear program, the sources said.
A separate senior Pakistani official involved in the talks told Reuters on Thursday that negotiators were hopeful of reaching a deal but noted gaps between the sides remained.
Brent Crude (July futures), buoyed by optimism over a prospective peace deal, is retracing to test support at $100 per barrel.
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Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.