Macro update
Oil prices extend rally: WTI climbed to $116.56 as supply concerns intensified, with prices now up more than 50% since the Iran war began.
Hormuz shutdown drives risk: The ongoing closure of the Strait of Hormuz, which handles roughly 20% of global oil flows, has severely disrupted exports and tightened global supply.
Trump deadline approaches: Markets are focused on a US-imposed deadline for Iran to reopen the strait, with threats of strikes on infrastructure increasing escalation risks.
Diplomacy stalls: Iran rejected a temporary ceasefire proposal, demanding a permanent end to the conflict, leaving negotiations fragile and unresolved.
Markets turn cautious: Equities were mixed and the dollar remained near recent highs as investors adopted a wait-and-see stance ahead of the deadline.
Inflation and supply concerns intensify: Rising energy prices are fuelling stagflation fears, widening crude premiums and forcing refiners to seek alternative sources of supply.
FTSE 100 back under pressure
The FTSE 100 is back in risk-off territory as markets await the outcome of US President Trump’s latest Iran ultimatum. The index is seen coming off the 10,500 region – a one-month high – and may slip back towards the 10,350 zone or lower in the course of this week while Tuesday’s intraday high at 10,514 caps.
The area around the 55-day simple moving average (SMA) at 10,359 may act as support, ahead of the more significant 2 April low at 10,252.
Short-term outlook: toppish while below 10,514, targeting the 10,350 region
Medium-term outlook: bullish while above the 30 March low at 9,856