Stocks are jumping and oil is slumping after yet another peach push in the Middle East. Gold and silver are mixed, Treasuries are up a bit, and the dollar is modestly lower.
After threatening aggressive strikes against Iran, President Trump backed down over the weekend to give diplomacy another chance. The US and Iran reportedly may hold another round of talks focused on opening up the Strait of Hormuz, news that sent US WTI crude oil futures back below $80 an ounce – for now.
USO, FXY, AZN, BMY (YTD % Change)
Data by YCharts
In the forex arena, the US and Japan joined forces to prop up the Japanese yen. That was the first coordinated intervention by the two countries in a decade-and-a-half, and it reportedly involved the US and Japan spending more than $53 billion.
Previous interventions by Japan alone failed to stop the yen’s slide. The decline has been putting upward pressure on Japanese inflation and raising fears that Japanese investors would sell more US Treasuries. The Invesco CurrencyShares Japanese Yen Trust (FXY) was down 1.7% year-to-date through Friday.
Could a Transatlantic Big Pharma deal be pending? The Financial Times reported that AstraZeneca PLC (AZN) of the UK and Bristol-Myers Squibb Co. (BMY) held merger talks recently. If the two drugmakers were to combine, it would create a behemoth with a market value of more than $400 billion. Antitrust concerns and other obstacles might prevent the transaction from happening, though. AstraZeneca stock was down 6.7% YTD heading into today’s session, while Bristol stock was up 25.1%.
