Market Overview — 14.04U.S. DOLLAR / CHINESE YUANFX_IDC:USDCNYTylerWhite_Alright guys, let’s break down what’s happening in the market right now. The situation is actually pretty interesting. I think you’re seeing the same thing as I am: both European and U.S. indices are pushing higher, up around +1.5% again. At the same time, oil has been dropping since the U.S. session closed — now trading below $100. Diesel has also corrected quite sharply, down to around $1100. And of course, the media is doing what it always does — trying to fit a narrative to the outcome. Some say the market reacted positively to U.S.–Iran talks… even though they didn’t lead to anything. Others claim prices dropped because of the U.S. blockade — but no one can really explain how that would work. In my view, it’s much simpler. Oil is falling not because supply has increased, but because demand is weakening. And the key factor here is China. If you look at the latest data, things are pretty weak: strong deflation, falling exports, and a shrinking trade balance. And deflation is not a “good thing,” as some people think — it’s a clear sign of weak demand in the economy. Then the classic spiral kicks in: prices fall → companies earn less → layoffs begin → people have less money → demand drops even further. And the cycle continues. And don’t forget, China consumes around 11–13 million barrels of oil per day. That’s massive. Even a small drop in demand from China can significantly impact the global balance. So yes, supply may have been disrupted due to geopolitical issues, but demand is also falling. In the end, the market is simply rebalancing. Now, about the Strait of Hormuz. There’s an interesting situation with a “double blockade” from both Iran and the U.S. The logic was: if a tanker pays Iran — the U.S. blocks it; if it doesn’t — Iran blocks it. But in reality, this morning a Chinese tanker passed through without any issues. And that’s an important signal. It suggests the situation might start easing. It looks like the U.S. could gradually step away from this conflict without a deal. And if shipping starts to normalize, that would actually be a positive scenario for the market. Because a significant volume of oil could return, easing supply tensions. Today is also packed with important data. First, we have the U.S. Producer Price Index. Last week’s inflation data came in weak — let’s see what PPI shows. If it’s weak again, it could signal that prices may start rising further down the line through the supply chain. Second, the International Energy Agency is releasing its monthly report for March. That should give us a clearer picture of supply, including how much has been lost due to the conflict. And we’ll also get an IMF report, which will give us insight into the health of global economies and their ability to sustain demand. Because it’s important to understand: energy crises are often followed by economic crises. We saw this in the 1970s after consecutive oil shocks, including the one triggered by the Iranian revolution. This time, the process could play out even faster: high energy prices → pressure on businesses → declining profitability → bankruptcies → economic slowdown. So we could see a lot of volatility today around these reports. Stay alert — we’ll break down anything important during the sessions. As always, we stick to the plan. See you all in the sessions. Have a great day 👍