IRAN: IRGC Confronted US Oil Tanker Trying To Transit Hormuz

The S&P(ESM6) range overnight  was 7177.00 - 7223.25, SPX closed +0.12%, Asia is currently trading around 7215. The S&P(ESM6) continues to drift higher making new highs as the market continues to look through a positive lens. Solid corporate earnings are adding to its tailwinds while the bulls look for a resolution in the Middle-East to reassert the upward momentum. This Wednesday 4 of the Mag 7 names are reporting. I suspect while we wait for any clear signs of how this conflict is going to move forward, the market could probably remain constrained, though until proven wrong looks likely to remain supported on dips. The world and the US needs this crisis to be over and Iran now has its own time sensitive problem in that it is running out of Oil storage capacity. Let's see who blinks first in this game of chicken, but for the moment it feels like we are in limbo. This morning US futures opened higher thanks to reports the US is considering a counter to the Iranian proposal, E-minis(S&P) +0.15%%, NQZ5 +0.10%. On the day, I suspect the market will continue to consolidate and look to react when and if we get confirmation of new peace talks or a resumption of the conflict. I continue to err on the side of a resolution having almost been priced in already and feel the bigger risk is the two sides resuming the fighting but tough to argue with the price action as the bulls make new highs. 

• Gregory Brew on X: “Forget all this stuff about shut-ins, floating storage, tanks at Kharg, and all that. Ultimately, the discussion going on inside Trump's natsec team is probably some version of: Will the blockade force the Iranians to make concessions, and facilitate a better deal, and can that be achieved quickly enough to avoid more pain from Hormuz remaining closed?”
• @Pentosh1 on X: "Global equities could 3-5x from here this year if we continue reopening the strait daily with new peace deals" 
• The Great Martis on X: "the broader commodity complex is firing on all cylinders: nickel, zinc, copper, aluminium, and the agriculture ETF (DBA) have all broken out strongly in recent weeks. This widespread strength across metals and soft commodities points to inflationary pressures that go well beyond crude oil alone." 
• Adam Taggart on X: “When it comes to the US economy (but *not* necessarily the financial markets), it's not that I'm becoming fully bullish...but it's that I'm having more & more trouble finding reasons to be bearish. All this of course is subject to change. If the data starts changing in a different direction.”
• The S&P 500 Index Average True Range(ATR) for the last 10 Trading days:  69 Points

Fig 1: S&P 500 Index Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 4.25% 21 December 2035, issue #TB171. The line was last sold on 3 December 2025 for A$1000mn. Today’s auction is likely to be shaped by several key factors: 

• The current yield is ~40bps higher than at the previous auction and hovering just below its cycle high.
• However, the 3/10 yield curve is around 30bps flatter versus the previous auction despite bouncing off the lowest level since mid-2024.
• Investor sentiment toward longer-dated global bonds remains skittish amidst Middle East war headlines.
• Notably, this bond is included in the XM futures basket, which may lend additional support to demand.
• Overall, firm pricing is still anticipated at today’s auction, given the higher yields and other favourable factors.
• Results are due at 0200 BST / 1100 AEST.

"JAPAN FINMIN KATAYAMA: VOLATILITY IN CRUDE OIL FUTURES MARKET AFFECTING FOERX, READY TO TAKE DECISIVE ACTION

JAPAN FINMIN KATAYAMA: WILL CLOSELY COORDINATE WITH US, WILL ACT WHEN NECESSARY

JAPAN FINMIN KATAYAMA: STANDING BY AROUND THE CLOCK" - RTRS

USD/JPY is a little lower so far in Tuesday trade, last 159.35, but broader USD sentiment is a touch softer. The FinMin comments, which are repeating recent rhetoric hasn't shfited the sentiment needle.