IRAN: Kuwait Army: Dealing With Intense Iran Attacks

Gilts are off early lows, but the bulk of the aggressive bear flattening move seen at the open is intact.

• Crude has extended its multi-session move higher, with WTI & Brent both holding above $100 after a pullback from Asia-Pac highs. Crude production cuts in the Middle East and source reports signalling the potential for U.S.-Israel special forces action in Iran underpin the latest rally in oil.
• Attempts to fade the hawkish moves seen over the last week or so have been quickly countered by extensions higher in crude & hawkish geopolitical news flow.
• Appetite to engage in fresh longs has clearly diminished at this stage, with the longevity of the Iran conflict and any potential further escalation now eyed.
• Futures as low as 88.80 before a bounce to 89.40 last. Bears deepen technical control with the break of key support at 89.79.
• Yields 4-24bp higher.
• 2s trade above 4.10%, hitting the highest level seen since April. Next upside area of interest at 4.20%, psychological resistance, and the nearby April ’25 top (4.201%). Benchmark on track for largest rise since the Truss mini-Budget.
• 10s ~4.75%, September ‘25 top located at 4.845%.
• GBP STIRs flip to pricing hikes on the move in oil. 14bp of tightening priced through year-end vs.  just under 10bp of easing being priced through the Summer late on Friday. SONIA futures flat to -25.0, off lows alongside gilts.
• The situation in the Middle East will continue to dominate local matters.
• Source reports have suggested that G7 finance ministers will discuss a joint release of oil from emergency reserves coordinated by the IEA (phone call reportedly set to start at 12:30 London/08:30 NY).

A volatile impulsive bull wave in WTI futures remains intact. The contract continues to appreciate and the breach of the psychological $100.00 handle strengthens a bull theme. Note that the contract is in an extreme overbought condition and that volatile activity is likely to remain in place for now. Attention is on the next psychological hurdle at $120.00. First support is today’s intraday low of $98.00. Gold is unchanged and continues to trade below $5419.11, the Mar 2 high. For now, a short-term bullish theme remains intact following recent gains. The metal has cleared all key retracement points of the sharp sell-off between Jan 29 - Feb 2. This strengthens the short-term bullish theme and signals scope for an extension towards key resistance and the bull trigger at $5595.5, the Jan 29 high. Initial firm support to watch lies at $5083.0, the 20-day EMA. 

• WTI Crude up $12.11 or +13.32% at $102.85
• Natural Gas up $0.19 or +5.84% at $3.368
• Gold spot down $45.45 or -0.88% at $5125.59
• Copper down $1.6 or -0.28% at $578.2
• Silver down $0.19 or -0.23% at $84.3794
• Platinum down $18.09 or -0.84% at $2132.29

A clear bear cycle in EuroStoxx 50 futures remains intact and the latest impulsive sell-off reinforces the current bearish theme. The recent breach of both the 20- and 50- day EMAs highlighted a stronger reversal. Sights are on the next key support at 5500.00, the Nov 21 ‘25 low. A clear break of this level would strengthen the bear cycle. Initial firm resistance is at 5833.00, the Mar 6 high. S&P E-Minis have traded sharply lower today as the contract begins the week on a bearish note. The break of 6751.50, the Feb 6 low, confirms a range breakout and highlights a stronger short-term reversal. Sights are on 6583.00, the Nov 21 ‘25 low and a key medium-term support. A clear breach of this level would strengthen the bear theme and open 6534.52, a Fibonacci projection. Initial firm resistance is 6751.50, the Feb 6 low. 

• Japan's NIKKEI closed lower by 2892.12 pts or -5.2% at 52728.72 and the TOPIX ended 141.09 pts lower or -3.8% at 3575.84.
• Elsewhere, in China the SHANGHAI closed lower by 27.591 pts or -0.67% at 4096.603 and the HANG SENG ended 348.83 pts lower or -1.35% at 25408.46.
• Across Europe, Germany's DAX trades lower by 567.72 pts or -2.41% at 23021.56, FTSE 100 lower by 181.87 pts or -1.77% at 10103.13, CAC 40 down 195.7 pts or -2.45% at 7797.79 and Euro Stoxx 50 down 151.05 pts or -2.64% at 5568.85.
• Dow Jones mini down 597 pts or -1.26% at 46932, S&P 500 mini down 72 pts or -1.07% at 6672.75, NASDAQ mini down 292.25 pts or -1.18% at 24383.5.