This is an almost textbook play on the TACO indicator. Remember us mentioning that Donald would go for de-escalation by the end of July? On July 26, Trump ordered a halt to strikes on Iran, and by August 2, he was already talking about a new peace deal.
What convinced Donald:
▪️ A 60% probability of a Fed rate hike at the next meeting
▪️ 30-year Treasury yields hitting their highest level since 2007
▪️ The US Strategic Petroleum Reserve shrinking for 18 consecutive weeks, now at its lowest since 1983
▪️ Retail investors setting a record for daily sales of US tech stock – $316M
Markets will definitely love this de-escalation, and Monday is expected to be green, but so far there is no confirmation of real negotiations or moves toward peace. What we are seeing now is Donald manipulating market sentiment to keep the US economic situation afloat.
And manipulation can reverse at any moment, triggering wild volatility. For instance, if Iran hits US tankers or military bases again, Donald will be forced to respond 😱