Oil, Yields and Nvidia Test Investors’ Stamina | Investing.com

• Middle East negotiations continue to dominate market sentiment
• Elevated oil prices and Treasury yields cast a shadow over equities
• A strong market decline could force Trump’s hand; could Nvidia earnings trigger it?
• Dollar/yen reached ¥159, fresh intervention is imminent; has the BoJ learnt its lesson?

Light at the End of the Tunnel for Middle East Negotiations?

It has been an eventful start to the week, as the Middle East developments are still dictating market sentiment. More specifically, the back-and-forth regarding a comprehensive agreement between the US and Iran continues, with the Iranians bringing another proposal to the table. Rumours that President Trump is considering lifting some of the oil sanctions helped risk appetite, but the reports later proved inaccurate, reversing the muted risk-on moves.

The disappointment did not last though, as Trump announced that a scheduled attack on Iran was postponed after demands from the leaders of Saudi Arabia, Qatar and the UAE, reinvigorating hopes for a peace deal soon. Unfortunately, this never-ending process is starting to impact equity market sentiment via the bond yield channel, while oil prices are also starting to play their part.

Oil prices remain elevated, boosting inflation across the board, as the July future is trading at $103.35, at the time of writing, and the December is hovering a tad below yesterday’s high of $85.63. As repeatedly stated, an agreement does not mean a swift decline in oil prices, since…