Markets:

• WTI crude oil down $1.01 to $94.45
• Brent crude up 30-cents to $107.86 after touching $119.13
• Gold down $159 to $4658
• US 10-year yields flat at 4.25%
• JPY leads, CAD lags
• S&P 500 down 18 points to 6606

It was a wild day in markets, one of the craziest ones yet since the war.

What changed it up today was the addition of fears of central banks hikes. The Fed yesterday followed by the BOE and ECB today got the market thinking about rate hikes and that led to a puke of just about everything early in the day. European stock markets were hit hard, falling 2-3% while bond yields spiked, including a 30 bps rise in UK 2 year notes.

In the US, it was a lesser version of the same early in the day but eyes were focused on oil where brent challenged $120.

Then it turned. The first change was in the US dollar as it started to fall and ultimately posted some of its largest one-day losses since August. We also saw gold bounce after falling to $4500 and silver falling to $65.55 then rebounding to $72.67.

Eyes were on Trump and he reiterated that he wants to avoid energy attacks. Later, Netanyahu said Israel acted alone in striking Iran’s gas facilities and that Trump had asked him to stop. He also said the war will be over sooner than people expect, but he also noted the possible use of ground forces, something a US poll showed was extremely unpopular.

Europe and Japan seem to be coming around on the idea of helping with Hormuz but it’s not clear in what capacity, perhaps more peacekeeping than warmaking but time will tell. I noted that the Fear & Greed index is now deep into “extreme fear” and the price action today looked like a washout but people are still struggling to see a clean end to this conflict. For his part, Trump sounded comfortable today.

Every moment can be a game changer but the price action in the latter half of US trading was promising and it was clear that central bankers are loathe to hike rates.

Eyes will remain on the headlines.