Thu 15 Jan: After the Bell
Banks Recover, Oil Drops on Iran De-Escalation, $ Hits 6-Wk High ➡️
ℹ️ Today’s performance tables & charts on the ‘Market Data’ post.
Good evening,
Equities closed higher today as strong earnings from leading financial firms, including Goldman and Morgan Stanley, helped reverse the negative tone of the previous two sessions, when results from JPM and Citi had disappointed. The rebound in the sector supported benchmark indices across the board, even as gains remained measured.
In commodities, oil prices plunged after signals of de-escalating tensions between Washington and Tehran reduced geopolitical risk premia. Core bond yields rose as investors further scaled back expectations for Fed rate cuts, while the $ strengthened against majors, with the DXY index climbing to its highest level in six weeks.
Treasury yields rose by ~5bp across the curve as stronger economic data pushed traders to further scale back expectations for rate cuts, reinforcing a repricing of the Fed policy path. Markets are now pricing roughly a 95% probability of no rate change at this month’s meeting and around 80% odds of another hold in March, with broader concerns over Fed independence remaining a secondary, background factor.
Crude oil futures fell sharply (-5%) after Trump signalled a de-escalation in tensions with Iran, saying he had been assured that the killing of protesters had stopped and that no executions were planned. His comments suggested a reduced near-term risk of military action, easing fears of supply disruptions in the Middle East. Despite the sharp drop in crude oil prices, energy stocks proved relatively resilient, with the sector down ~1% on the day.
