Trump's Speech "Lacks Clear De-escalation Signal," Leaving Market "Very Disappointed"
Markets had expected President Trump's national televised address to signal de-escalation, but instead, they heard escalating threats: he announced that in the next two to three weeks, the U.S. would launch "extremely fierce strikes" against Iran. Nomura, NAB, and other institutions pointed out that the speech did not offer a clear de-escalation signal, and the blockade of the Strait of Hormuz is unlikely to be resolved in the short term, meaning global oil prices may remain under upward pressure until late April. Trump's speech was "truly disappointing."
On the morning of April 2nd, Beijing time, U.S. President Trump delivered a national televised address on the Iran conflict. The market had bet on him releasing a de-escalation signal, but instead, they were met with new threats.
Trump declared in his speech that the conflict with Iran would achieve a "quick, decisive, overwhelming victory," and explicitly stated, "In the next two to three weeks, we will carry out extremely fierce strikes against them," issuing an ultimatum: "If there is no agreement, we will launch fierce strikes against every power plant in Iran." He gave no answer as to when the Strait of Hormuz would be reopened.
Oil prices provided the market's initial reaction: Brent crude oil briefly broke through $105 per barrel intraday, with a daily increase of 4%. Asia-Pacific stock markets were under pressure across the board, with the Nikkei 225 index extending its decline to 1.1%, the Seoul Composite Index falling by 2.1%, and S&P 500 futures down 0.6%.
Nick Twidale, Chief Market Analyst at AT Global Markets, stated, "Investors clearly aren't buying it, and global markets may have more downside today." He added, "Although he said the war was ending, that key message – that there will still be strikes on Iran in the coming weeks – is extremely negative for the market."
Institutional Interpretations: Pressure Strategy, Not De-escalation
Several institutions quickly offered their assessments after the speech, with core conclusions being highly consistent: this was not the signal the market wanted.
After Trump's remarks, the market seemed to focus more on the view that the war with Iran was not over.
Robert Subbaraman, Head of Global Markets Research at Nomura Securities, said Trump's address "did not send the clear signal of de-escalation that the market had hoped for." He pointed out that in foreign exchange markets, Asian currencies could weaken against the dollar, and central banks might increase intervention if volatility becomes too rapid. This could also put upward pressure on government bond yields. The Bloomberg Dollar Spot Index rose 0.2% after the speech.
Rodrigo Catril, a strategist at National Australia Bank (NAB) in Sydney, commented, "The market seems to be focused on the view that the war is not over." He stated, "The U.S. is seeking escalation, hoping to force Iran to reach an agreement, but this strategy is not without risk – oil prices need to be watched closely."
Dilin Wu, a research strategist at Pepperstone Group, was more direct, calling Trump's speech "truly disappointing." She noted that Trump's earlier remarks about withdrawing from the Middle East "now seem more like an attempt to appease the market while retaining options for pressure." "He clearly still favors a strategy of applying pressure first and then easing tensions, rather than a straightforward de-escalation."
Market Interpretation: Lack of Ceasefire Details, Nothing New
As the speech lacked substantive details to resolve the core supply chain crisis, market concerns are intensifying.
Derek Wallbank, a senior editor at Bloomberg, commented: "If you've been listening to the President over the past week, there wasn't a lot new tonight."
He pointed out that Trump completely failed to mention the fact that Iran currently controls the traffic through the Strait of Hormuz. This situation, which gives Iran "de facto veto power," is difficult for many Gulf nations to accept. Furthermore, according to U.S. officials, a third U.S. carrier strike group departed Virginia on Tuesday for the Middle East, indicating that military buildup is continuing.
Columnist Clara Ferreira Marques stated that Trump provided no new details or lasting solutions for the Strait of Hormuz, instead urging other countries to find "late courage" to solve the problem, a statement that "will unsettle the crude market."
From a longer-term investment perspective, the market is pricing in "energy disruption" over the long term. Analyst Abhishek Vishnoi noted that Trump's remarks asking other countries to look after the Strait of Hormuz themselves increase the probability of a persistent risk premium in the crude oil market.
