Global Market Brief: Iran Tensions Return as Investors Eye NFP

Main Focus

Tensions between the US and Iran have flared up again. Following an Iranian attack on US destroyers transiting through the Strait of Hormuz, the US Navy launched strikes on Iranian targets on Thursday. In an interview with ABC News, President Trump described the strike as a “love tap,” saying that the ceasefire with Iran is still technically “in effect,” but warning that Tehran would face a much harsher response if it does not reach an agreement soon. 

According to a Wall Street Journal report, the US is preparing to restart Operation Project Freedom, which Trump had paused on Tuesday after citing “major progress” in negotiations with Iran.

Another key diplomatic development came from Beijing, where China hosted Iranian Foreign Minister Aragchi this week for the first time since the war began. US Treasury Secretary Scott Bessent said Iran will be on the agenda at the Trump-Xi summit scheduled for May 14–15. Meanwhile, after meeting with European Commission President Ursula von der Leyen, Trump posted on Truth Social that he was giving a deadline until the 250th anniversary of the United States, otherwise tariffs would rise sharply. That added layer of uncertainty could weigh on European equities.

In the UK, local elections delivered a heavy blow to Prime Minister Keir Starmer. Labour lost significant seats across 136 English councils, while Nigel Farage’s Reform UK emerged as the biggest winner, with the Greens and Liberal Democrats also making gains. Former Shadow Chancellor John McDonnell said a leadership change should now be “on the table.” UK borrowing costs had already climbed to their highest level since 1998 ahead of the vote, reflecting not just political stress but growing market pressure as well.

Macro Framework

Friday’s session is shaping up as a broad profit-taking day. US markets closed lower on Thursday, with the Dow down 0.6% after once again failing to reclaim the 50,000 level, while the S&P 500 lost 0.4% and the Nasdaq slipped 0.1%. The Wall Street Journal report suggesting that Project Freedom may be restarted changed the tone of the session. 

In Asia, the MSCI All Country Index fell 0.3%, and Asian equities pulled back 1.2% from record closing levels, although the region is still on track for a fifth consecutive weekly gain. US futures were modestly higher in early trading, up around 0.2%, suggesting that this move still looks more like profit-taking than a structural reversal.

The main volatility event today is the US nonfarm payrolls report. Expectations are for 53,000 to 55,000 jobs added, down sharply from the previous 178,000. If that softer labor view is confirmed, it would strengthen the case for a more dovish shift in Fed expectations. Santiment.net data suggests there is a meaningful chance of a downside surprise. A weak print would likely deepen dollar weakness and support both gold and risk assets.

 A stronger report, however, could reinforce a more hawkish Fed stance when combined with lingering inflation pressure tied to Iran-related energy disruption. Michigan Consumer Sentiment at 10:00 ET, along with earnings from Toyota and Nintendo, will also be on the radar.

Coinbase also disappointed after the US close on Thursday, with shares falling 5% in after-hours trading. The company reported a loss of $1.49 per share, versus expectations for a $0.27 profit, while revenue came in at $1.41 billion, below the $1.52 billion consensus. Lower crypto prices and declining volatility weighed heavily on spot trading volumes. Still, Coinbase said its share of global crypto trading volume rose to a record 8.6%, while derivatives revenue grew 169% over the past 12 months. Earlier this week, the company also announced plans to cut 14% of its workforce, or around 700 employees, citing AI restructuring and the broader crypto slowdown. Altogether, the update highlights just how cyclical the sector remains, even on the institutional side.

Crypto

Bitcoin traded at $79,614 during Friday’s Asian session, down 1.6% over the past 24 hours, though still up 3.3% on the week. The pullback from Wednesday’s $81,500 high toward the $79,000 area came after the US strikes on Iranian targets. Ether fell 2% to $2,278, while Dogecoin dropped 3.8% to $0.1063, making it the worst-performing major coin on the seven-day board. XRP was down 1.7% to $1.38, and BNB slipped 0.7% to $638.

According to K33 Research, negative funding rates in Bitcoin futures have now stretched to 67 consecutive days, the longest such streak in the past decade. Negative funding means short positions are paying longs on a recurring basis, and for roughly two and a half months shorts have been paying while price has continued to move sideways to higher. That setup creates the classic conditions for a short squeeze if BTC can break above $83,200, which is the 200-day simple moving average. A sharp move through that level could force short sellers to cover and accelerate the rally.

FxPro strategist Alex Kuptsikevich noted that BTC’s Wednesday test of $82,800 failed to break the 200-day moving average, while daily RSI moved above 70. The last three similar overbought setups — in August, October, and January — were followed by sharp pullbacks. QCP Capital, meanwhile, notes that one-month implied volatility remains around 41%, with put demand still firm. That suggests traders are staying constructive overall, but are continuing to hedge downside risk. 

XWIN Japan is maintaining a medium-term target of $93,000, based on a CME futures gap closure thesis.

Structurally, the backdrop remains supportive. Tether’s market capitalization has grown by $5.9 billion over the past 60 days, reversing the $2 billion monthly outflow trend seen in February and March and signaling renewed capital entering the crypto space. 

Another notable development came from the cross-border redemption of tokenized US Treasuries through the Ondo Finance, JPMorgan Kinexys, Mastercard, and Ripple partnership. The OUSG redemption was completed on XRP Ledger in under five seconds and outside traditional banking hours, offering a tangible example of institutional blockchain infrastructure in action. Headlines around the World Liberty Financial–Justin Sun case and comments from Donald Trump Jr. at the Consensus conference have remained active in crypto media, but their direct market impact has been limited.

Commodities

Brent crude rose 1.2% to around $101 as tensions with Iran escalated again, although it is still down roughly 6% on the week and on track for its weakest week since late February. WTI is trading in the $95–96 range. The conflict in the Strait of Hormuz remains difficult to price cleanly, with both sides blaming the other for the latest escalation. Trump’s threat of a more forceful response is keeping a short-term risk premium in place, but the broader market still appears to be treating the US-Iran ceasefire as generally intact, which helps explain the weekly downtrend. 

US crude inventories have now fallen for a third straight week, preserving the broader supply tightness story. Uncertainty ahead of the May 14–15 Trump-Xi summit is likely to keep oil volatile.

Gold is extending its rally for a fourth consecutive day, rising more than 1% to $4,727 per ounce. The key technical development is that gold has reclaimed its 50-day EMA at $4,724, and for the first time in weeks the metal is attempting to close above this important medium-term level. Marex analyst Edward Meir expects gold to trade in a broad $4,600–5,100 range in the near term. The dollar remains weak against all G10 currencies, while the US 10-year yield is down 0.6% on the week. That combination continues to support non-yielding assets such as gold. For today, the NFP report is the single biggest directional catalyst.

Spot silver has surged 2.58% to $80.49, with an intraday high of $80.70, putting the market right up against the $80.80 horizontal resistance level. A breakout looks increasingly likely. Copper has also moved sharply higher, rising 2.64% to above $6.29 and clearing the key $6.20 resistance area. The combination of AMD’s earnings surprise and the growth momentum implied by the broader Asian chip rally is now feeding directly into industrial metals.