Daily market report Thursday 2 April

Power and gas prices remain pressured by geopolitical optimism

Gas and power

Power and gas prices continued to decline yesterday, with optimism around a potential de escalation in the Middle East supported by further comments from President Trump suggesting the US could be out of Iran within “two to three weeks.” Additional, though unverified claims that Iran’s “new regime president” had requested a ceasefire also helped reinforce the softer tone. However, markets were hesitant to unwind too much risk, as participants remained cautious amid conflicting remarks from the President and awaited a self described “major announcement” expected overnight. 

Adjacent markets

The British pound strengthened against the dollar on Wednesday as easing tensions around the Iran conflict supported broader risk sentiment, while comments from Andrew Bailey pushed back on market expectations that investors may be getting ahead of themselves in pricing in two rate cuts this year. US equities also edged modestly higher, reflecting the improved tone across risk assets. Overall sentiment remained cautiously optimistic, though markets stayed alert to further geopolitical headlines.