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Rates Spark: The Epic Fury Calms

Seeking Alpha
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2 min read
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⚡ Quantum Brief
President Trump signaled a shift in the Iran conflict during a Miami speech, framing it as nearing resolution while preemptively influencing market reactions. His messaging recast U.S. involvement as limited to "tidy-up" operations, triggering immediate market adjustments. Oil prices stabilized at $85, the VIX held at 25, and 2-year break-evens remained at 3%, reflecting lingering volatility despite de-escalation signals. Analysts note these levels still indicate elevated risk amid geopolitical uncertainty. Markets are pivoting focus as the conflict’s intensity wanes, though ING strategists warn the "war goes on" in a reduced form. Temporary reprieve allows investors to reassess broader economic factors like trade and monetary policy. The U.S. strategy shift—from active engagement to containment—drove rapid asset repricing, with rates and commodities reacting first. Analysts attribute the calm to perceived reduced tail risks rather than fundamental resolution. ING’s research team emphasizes the fragility of the current equilibrium, urging caution as oil, volatility, and inflation expectations remain near stress thresholds despite the diplomatic thaw.
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ING Economic and Financial Analysis5.23K FollowersFollow5ShareSavePlay(5min)CommentsSummaryPresident Trump struck a tone of nearing finality on the war with Iran at a speech in Miami, and ahead of that managed to shape market pricing in the US afternoon by getting the message out ahead of time.It was effective. The US will remain in the game, but more in the guise of a tidy-up exercise. Big market moves in consequence. Now the dust settles.We are still at troubling levels, with the oil price at 85, VIX at 25 and the 2yr break-even at 3%.

Getty Images By Padhraic Garvey, CFA, Regional Head of Research, Americas and Benjamin Schroeder, Senior Rates Strategist The war goes on, but it's not the same war. Markets can refocus elsewhere for a bit The attack on Iran wasThis article was written byING Economic and Financial Analysis5.23K FollowersFollowFrom Trump to trade, FX to Brexit, ING’s global economists have it covered. Go to ING.com/THINK to stay a step ahead. We’re sorry we can’t reply to individuals' comments.Content disclaimer: The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.This publication has been prepared by ING solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. For our full disclaimer please click here.

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