Analyst: Failed US-Iran negotiations could push oil prices higher, market risk sentiment may be hit again

Golden Ten Data April 12 – Charu Chanana, Chief Investment Strategist at Saxo Bank, stated that the breakdown of negotiations between the US and Iran represents a step backward. For the market, this means that the previous relaxation trade is likely to fade. Oil prices may rise again, risk sentiment will be hit once more, and the Strait of Hormuz will continue to pose a significant chokepoint risk even if it is not completely closed. However, considering the wide disparity between both sides regarding nuclear safeguards and the Strait of Hormuz, this is not unexpected. As for the US dollar, this suggests it will regain some safe-haven support, but unless there is a new military escalation, a sharp surge is unlikely. Gold may benefit from renewed geopolitical hedging demand, but the market is still unlikely to fully return to the worst inflation shock scenarios.