• University of Michigan consumer sentiment 77.9 vs 79.0 estimate
• Reports of 30-50 missiles launched from Lebanon at Israel
• Sen Rubio: „Barring some last-minute development, Iran is going to attack Israel“
• Fed’s Bostic: Inflation will keep easing but slower than we would like
• Fed’s Daly: There is absolutely no urgency to adjust policy rate
• KC Fed President Schmid: Current stance of US monetary policy is appropriate
• Fed’s Schmid Q&A: We’re at a bumpy stage now with inflation
• Chicago Fed Pres. Goolsbee: US is in an environment of „cross currents“
• WSJ Timiraos: Core PCE probably rose 0.27% in March according to forecasters
• Feds Collins: Inflation will come down even with a healthy labor market,but will take time
• US military deployed a missile ship with advanced defense capabilities near Israel
• US import prices for March rose 0.4% versus 0.3% expected

Markets:

• Gold down $30 to $2342
• WTI crude oil up 52-cents to $85.54
• US 10-year yields down 6.3 bps to 4.51%
• S&P 500 down 1.5%
• JPY leads, AUD lags

What has me rattled is the warning from Senator Marco Rubio about how Iran will attack Israel „barring some last minute development.“ During the first minutes of Russia’s war in Ukraine, Rubio was live-tweeting what Russia was doing and planned to do in extreme detail. This indicates that he’s privy to the highest levels of US intel and his comments certainly made the market nervous.

What had been moderate worry turned into full-scale fear in the equity market with the Nasdaq down 2%. The US dollar also climbed broadly and US 10-year yields slid.

However late in the day, Hezbollah launched a mild rocket attack against Israel and the market breathed something of a sigh of relief, thinking that maybe that was it. Still, the market is on edge and we will have to see what the weekend or next week brings.

Gold was caught up in the drama as it rose to a record high but as risk sentiment worsened a round of profit taking turned into a $100 drop, leaving a nasty reversal on the chart. Eyes will be on the ever-present buyers in China at the Monday open, to see if they buy the dip once again.

This article was written by Adam Button at www.forexlive.com.

The mood was poor to start the day but significantly darkened on credible talk of an imminent direct Iran attack on the US. The question is: Was the Hezbollah rocket attack it? Not many traders wanted to buy the dip late on anticipation that Iran will refrain from striking back too forcefully.

Geopolitics are tough to predict but here’s to a peaceful weekend.

Closing changes on the day:

• S&P 500 -1.5%
• Nasdaq Comp -1.6%
• DJIA -1.3%
• Russell 2000 -2.2%
• Toronto TSX Comp -1.1%

On the week:

• S&P 500 -1.6%
• Nasdaq Comp -0.5%
• DJIA -2.4%
• Russell 2000 -2.2%
• Toronto TSX Comp -1.6%

This article was written by Adam Button at www.forexlive.com.

• Labor market is strong, inflation is not falling as rapidly as last year
• With this week’s CPI report, it’s a good time to remind people the Fed is not data-point dependent
• I need to be fully confident inflation is coming down to 2% before considering a rate cut
• There’s a lot of work to do before we can be confident
• There’s too much discussion of how many rate cuts, rather than what we are trying to accomplish

The market is pricing in a 68% chance of a cut in July. We will need a turn lower in inflation data if that’s going to happen.

This article was written by Adam Button at www.forexlive.com.

„My expectation is sooner than later,“ Biden said when asked how imminent an attack by Iran on Israel was.

„We are devoted to the defense of Israel. We will support Israel, we will defend–help defend Israel and Iran will not succeed,“ he also said.

The market has priced out some of the worries but we won’t find out how much angst is in the market unless nothing happens on the weekend. So it goes with macro trading.

This article was written by Adam Button at www.forexlive.com.