Future(s) was bright just before Trump’s 5-day ‘pause war’ post
Contracts corresponding to at least 6 million barrels of Brent and West Texas Intermediate were sold in the two minutes from 6:49 a.m. in New York on Monday, according to exchange data. The average for the same time period over the previous five trading days was about 700 lots-or 700,000 barrels. Trump’s Truth Social post was published at around 7:05 a.m.
A similar increase in activity in US stock futures was observed on the S&P 500 with about 6,000 contracts traded, representing more than $2 billion in notional value.
That was a sharp spike against an otherwise quiet premarket session.
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The unusual trading volume pattern was visible across multiple other financial futures contracts, such as Germany’s DAX Index Futures, the Euro Stoxx 50 Index Futures and in contracts on the Nasdaq Index and Russell 2000 Index. Another spike is visible in contracts for natural gas.
Trump said in the post that the US would postpone strikes against Iranian energy infrastructure for five days.”Yesterday, we were counting down the hours until Trump started ‘obliterating’ Iranian power plants; today we are counting down the days before a ‘deal’ with Iran,” said Robert Rennie, head of commodity and carbon research at Westpac Banking. “The problem for traders is that we have a whole lot of risk and volatility to manage between those two extremes.”
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Brent oil prices plunged as much as 14% on Monday after the post. Stock markets in the US and Europe jumped about 4% from their session lows to intraday highs.
It’s not known whether the contracts were part of a wider strategy involving other derivative instruments like timespreads or options, nor whether some of the volume was follow-up trading sparked by the initial moves.
The identities of the counterparties were also not immediately clear.
