WS #11296

The dominant narrative remains the Iran-US conflict and its impact on oil markets, with a tentative de-escalation underway. Brent oil is around $72, with Citi forecasting a decline to $60 by year-end as Strait of Hormuz disruptions ease. However, a new development is Iran's threat of a 'forceful response' against ships using unapproved routes in the Strait of Hormuz, which introduces renewed geopolitical risk and could slow the normalization of shipping flows. This counters the prevailing bearish oil thesis. Additionally, Canada unveiled plans for a new Alberta-to-Pacific oil pipeline to cut dependence on the US, a bullish signal for Canadian energy infrastructure. Bitcoin ETFs saw a $222 million inflow, breaking a 10-day negative streak, providing a bullish signal for crypto. The US jobs report showed weaker-than-expected payroll growth, reducing the odds of a Fed rate hike and weakening the dollar, supporting gold and equities. Gold surged above $4,200/oz, reflecting safe-haven demand and a weaker dollar. Asian stocks rallied on a tech rebound, with South Korea's Kospi surging nearly 6% on bargain buying in chipmakers. The narrative arc is STABLE for the Iran conflict, with supply recovery ongoing but new threats adding complexity. The macro theme is a slight risk-on tilt due to softer US labor data and oil price declines, but AI hardware stocks remain under pressure from valuation concerns.