Markets opened the first session of the day in a noticeably different mood compared with earlier in the week, although volatility remains very high. After a strong recovery on Monday, indices traded mostly sideways on Tuesday and Wednesday. However, the Asian session on Thursday brought a clear reversal, with equities moving sharply lower again.
The main driver remains the ongoing conflict involving Iran. Despite recent comments from Donald Trump, who suggested that the situation is largely resolved and even claimed that the war has effectively been won, markets are not pricing the situation in the same way. Investors remain concerned about the prolonged disruption to energy markets, particularly oil supply.
Energy markets continue to dominate sentiment. Authorities announced plans for an emergency release of roughly 400 million barrels of crude oil from strategic reserves. The measure briefly improved sentiment, but the effect was short-lived. Oil prices are again pushing higher and are once more approaching the $100 level after declining earlier in the week. Monday and Tuesday saw some correction lower, Wednesday trading was relatively flat, and now Thursday is bringing another attempt to move higher.
The combination of rising oil prices and falling equity markets is clearly weighing on overall sentiment. Risk appetite is weakening, which is also visible in the cryptocurrency market. Digital assets are starting Thursday under pressure and trading lower.
In the currency market, we can see continued strength in commodity-linked currencies. The New Zealand dollar is among the strongest performers, while the Canadian dollar and the Norwegian krone are also gaining, benefiting from higher oil prices. The US dollar is also stronger. On the other side of the spectrum, several European currencies are weaker.
Looking at the macro calendar, there is little scheduled today. The only notable data point is the regular US unemployment claims release. As a result, macro data is unlikely to be the main driver.
Instead, markets remain focused almost entirely on geopolitical developments and their impact on energy prices. For now, the trajectory of oil and the situation in the Middle East continue to shape global market sentiment.