Good morning. US equities began the week by selling off yesterday following the commencement of US military strikes on Iran. However, after being down >1%, the decline was once again halted at the 100-day moving average and the index managed to end the day slightly higher, also at another key technical level, the 50-day. Small caps outperformed as the Russell finished almost 1% higher, despite a sharp spike in yields. Dollar strength was as expected, but there was no haven bid for treasuries as yields ripped higher.

This morning US futures are under pressure again as global markets are sharply lower led by South Korea. S&P futures are close to 2% lower, weakening as we approach the Open. Iran has been retaliating, including firing on ships in the Straight of Hormuz and attacking energy and infrastructure targets across the Middle East. Asian markets were sharply lower. South Korea’s high-flying market came back from a holiday and went limit down. Samsung and SK Hynix fell 10%. Major European indexes are down ~3%.

Treasury yields are higher again across the curve though off their highs. The US Dollar Index continues to climb, breaching 99 and all three major moving averages as it strengthens against the major crosses, including Yen and Swiss Franc havens.

Crude and natural gas are jumping again. Dutch TTF is up another 25% today after adding ~40% yesterday. Precious metals are getting hit including gold and crypto is down as well with degrossing/Dollar raising action likely occurring.