This morning, the market panicked for only 20 minutes

—The “dead calm” after 20 minutes into the trading session is not because the market lacks direction, but rather because capital has chosen to keep all chips steady, holding back until Wednesday’s Waller speech and Thursday’s Nonfarm Payrolls.

There were minor surprises when global markets opened on Monday:

- Oil prices opened with a gap to the upside, then quickly gave back some gains;

- The dollar index opened lower, then promptly recovered its losses;

- Gold prices opened lower and then continued to decline rapidly;

- US stock futures performed best, jumping at the open and continuing higher, testing the intraday highs seen last Friday.

First, this time there is no apparent logic to the market moves; it’s not the familiar “escalating conflict leads to higher oil, everything else drops.” Oil prices gapped up at the open due to tit-for-tat retaliatory actions between the US and Iran over the weekend. On the other hand, US stock futures rose because both sides agreed to pause military actions and will meet on Tuesday in Doha (according to Axios citing unnamed US officials).

Second, all the volatility was concentrated in the first 20 minutes after the opening, after which the market sank into a state of dead calm. In just 20 minutes, both bulls and bears quickly priced in both “the weekend conflict” and “Axios’s exclusive report about the Doha meeting.” For the rest of the session, the market is likely to evolve along the lines of “emotional recovery dominates, awaiting Tuesday’s Doha meeting.”

However, what will really impact the market still depends on—economic data and Federal Reserve officials’ remarks. This Wednesday (21:30 GMT+8), Fed Chair Waller will deliver his second speech in office at the ECB Forum, and on Thursday (20:30 GMT+8), the US will release Nonfarm Payrolls data. Based on timing, by Waller’s Wednesday speech, the Fed will have already seen the initial Nonfarm data for Thursday evening. According to Powell’s “pre-emptive stability” logic, if the Nonfarm report is expected to trigger market declines, the Fed would deliver market-friendly commentary the day before (to cushion the blow). The opposite also holds. But now it’s Waller calling the shots; the first time, he used hawkish communication to shift market expectations. For the second time, he will need to answer whether that hawkish stance was a one-off or signals a new communication framework. (Wall Street Intelligence Community)