Iran refutes Trump's "call for a ceasefire" remarks: purely false rumors! What will the situation lead to?

Risk appetite bounces back!

On Wednesday evening Beijing time, the U.S. stock market continued its rally. As of the time of this report, the Nasdaq is up more than 1%. Chip stocks rose across the board: the Philadelphia Semiconductor Index surged more than 3%, with Micron Technology and Intel up more than 8%.

European equities rallied across the board. The Euro Stoxx 50 index rose 2.65%, Germany’s DAX30 index rose 2.56%, France’s CAC40 index rose 1.86%, and the UK’s FTSE 100 index rose 1.41%.

Cryptocurrencies also rose across the board. Bitcoin is up nearly 3%, and Ethereum is up nearly 4%. According to data compiled by CoinGlass, in the past 24 hours, the total across the crypto market of derivatives liquidations reached $350 million, with 114,500 liquidated positions in total. Of these, more than six-tenths were liquidated short positions.

Regarding the situation in Iran, U.S. President Trump said on April 1 local time that U.S. troops would soon withdraw from the fighting in Iran. He also said that Iran had “just requested a ceasefire from the United States,” but only when the Strait of Hormuz is open would the U.S. “consider” it.

On the same day, Iran’s Islamic Revolutionary Guard Corps said that the situation in the Strait of Hormuz is under the navy of Iran’s Islamic Revolutionary Guard Corps’ “firm and absolute” control, and that it will not be opened to Iran’s “enemies.” In addition, according to a report from Iran’s state television on April 1, Iran’s Foreign Ministry Spokesperson Baghaei said that the so-called statement posted by U.S. President Trump earlier on social media about “a new Iranian regime’s president requesting a ceasefire” was entirely false information. So, where will the Iran situation go?

**　　A broad rally **

On Wednesday, the three major U.S. stock indexes continued to rise. As of the time of this report, the Dow is up 0.60%, the Nasdaq is up 1.13%, and the S&P 500 index is up 0.70%. In the prior trading day, affected by remarks from U.S. President Trump hinting that the Middle East conflict would end quickly, the main stock indexes logged their largest single-day gains in nearly a year.

Chip stocks strengthened again. As of the time of this report, the Philadelphia Semiconductor Index jumped more than 3%. Intel is up 8.46%, Micron Technology is up 8.18%, Micron Technology is up more than 7%, Applied Materials and ARM are up more than 4%, and Lam Research, ASML, and Koda Semiconductor all gained more than 3.50%.

Large technology stocks also rallied across the board: Google is up more than 2%, Nvidia, Tesla, Amazon, and Facebook are up more than 1%, Apple is up 0.33%, and Microsoft is up 0.37%.

On the news front, according to a report by CCTV News, on April 1 local time, U.S. President Trump said the U.S. will “soon” withdraw from Iran (amid the fighting), but if needed it will carry out “targeted strikes.” Trump said that U.S. military actions have made Iran “unable to possess nuclear weapons,” and he added that after withdrawal, if conditions change, the U.S. may still re-enter.

When discussing NATO, Trump voiced strong dissatisfaction, accusing the alliance of failing to support the U.S.’s goals on Iran-related matters, and saying that the “absolute” is considering pushing for the U.S. to withdraw from NATO.

Trump also said there is no clear timetable yet for when the war with Iran will end, but the U.S. will not stay long-term.

The day before, Trump and U.S. Secretary of State Rubio both said the Iran war may be nearing its end. This suggests that the U.S. may hold direct talks with Iran’s leadership, and may also gradually end the conflict without reaching an agreement. On Wednesday, Trump also said on social media that Iran had “just requested a ceasefire from the United States,” but only if the Strait of Hormuz is open would the U.S. “consider.” Trump is scheduled to deliver a nationwide address at 9:00 p.m. Eastern Time on Wednesday.

UBS Global Wealth Management analysts said: “Although signals of willingness to negotiate are positive, obstacles remain until the conflict truly ends. The restoration of energy transportation may take longer. If the conflict ends suddenly while the status of the Strait of Hormuz remains unclear, energy prices may stay high for a longer period as well.”

Currency market participants currently believe there is a zero chance the Federal Reserve will cut rates this year. The reason is that the Iran war has triggered energy-driven inflation concerns, making the rate outlook uncertain. Previously, the market expected two rate cuts.

Jay Woods, Chief Market Strategist at Freedom Capital Markets, said: “Market focus will still be on news related to oil prices and the situation in the Middle East. Tensions in the region rise and fall, and market performance will move along with it.”

Wolf von Rotberg, an equity strategist at Bank J Safra Sarasin, said: “Since the start of the Iran war, the correlation between Brent crude oil prices and global stock markets has been unusually strong. This indicates that for global stock markets to return to their prior highs, the Strait of Hormuz needs to reopen, and oil prices also need to fall significantly. Declaring that the risk is over may still be premature.”

**　　Crypto rises, with more than 110,000 liquidations **

The rebound in risk appetite is also reflected in the crypto market, which has strong speculative attributes.

On Wednesday evening, Bitcoin’s 24-hour gain at one point exceeded 3%, and the price at one point neared $68,800; Ethereum at one point rose more than 4%, and the price at one point broke above $2,150. As of the time of this report, Bitcoin is up 2.90% to $68,500, Ethereum is up 3.90%, and Cardano (ADA), XRP, and Solana are up more than 3%.

According to CoinGlass data, over the past 24 hours, there were 114,500 liquidations worldwide, with total liquidation amounts of $350 million. Of this, $215 million were liquidated from short positions, and $135 million were liquidated from long positions.

Bitcoin’s cumulative gain in March was 2.2%, marking its first monthly rise since September of last year. This leads some market participants to be optimistic that crypto assets may be emerging from the “crypto winter” that began with the price crash in October last year. In March, U.S. ETF funds recorded $1.2 billion in net inflows, providing support for Bitcoin and ending four consecutive months of net outflows.

Rachael Lucas, an analyst at BTC Markets, said that Bitcoin needs to keep its price in the $70,000 to $72,000 range to build investors’ confidence. “The market has gotten used to 12 months of policy back-and-forth,” she said. “Bitcoin’s price action shows the problem: even with big stock market swings under Trump’s remarks, Bitcoin is still being compressed into a narrow trading range.”

Ryan Rasmussen, Research Head at Bitwise Asset Management, is even more optimistic about the outlook. He said, “Once headwinds at the geopolitical and macro levels fade, we believe the multi-year bullish momentum brought by institutional adoption and clearer regulation will drive Bitcoin to new all-time highs.” He said that after five consecutive months of declines, the positive price action in March indicates investors are recognizing this, and Bitcoin is about to break out of crypto winter.

（Source: Securities Times China）