The world is on the "edge of misjudgment"

Source: Wall Street Intelligence Circle

The first trading day of this week can be described as "thrilling but not dangerous":

- Oil prices surged at the open but then gave back most of their gains. Gold moved in tandem with crude oil, also spiking before pulling back.

- Meanwhile, the US Dollar Index rose only slightly, while the 10-year US Treasury yield actually increased.

The market did not show a strong risk-off sentiment.

Today is not the climactic moment, as what the market truly fears is not rising oil prices, but Iran losing control—a question that remains unresolved, thus keeping the market's movements relatively manageable. Iran is not a simple presidential country. If a key figure is affected, the problem is no longer "whether to retaliate," but rather: who seizes power? Who acts tougher? Who needs to use war to solidify legitimacy? This is much more serious than just missiles being exchanged.

The US Treasury trend is worth noting—not only did it not rise, but rather fell, failing to serve as a safe haven, indicating that the market is more concerned about "energy inflation." If oil jumps to $100, global inflation could rise another 0.6–0.7 percentage points.

The market is on the "edge of misjudgment." Although the market is generally still under control, it suggests that it is still being regarded as a "manageable conflict," and has not yet fully entered into "long-term war pricing." From another angle, the market is underprepared.

The true turning points are:

Whether there is a clear power struggle within Iran—if hardliners inside the country start vying for power, the conflict could be used to consolidate their authority, amplifying the risks.

Whether the Strait of Hormuz remains blocked for an extended period—as long as ships can still pass, even if slowly, oil prices reflect only a risk premium. If shipments are continuously disrupted, that would constitute a supply shock, which is fundamentally different.