Oil Breaks Above $90 as Risk Sentiment Deteriorates

Risk sentiment in global markets is deteriorating rapidly due to renewed US-Iran tensions and higher oil prices. On Friday, the price of oil broke above the $90 level, sparking concerns about inflation and demand. As a result, equities are taking a hit, with the S&P 500 falling below its 7,650 support level.

The Dow Jones and DAX indices are also moving lower, which could lead to further downside and profit-taking in the broader market. However, cryptocurrency markets seem surprisingly resilient, with Bitcoin holding steady despite weaker equities and a stronger dollar.

One key signal to watch is whether the S&P 500 can reclaim its 7,650 level. If not, the correction could gain momentum and pull other indices, including crypto, lower. The New Zealand Dollar has also weakened after the RBNZ rate hike, indicating that higher rates alone are not supporting the Kiwi in this risk-off environment.

The combination of geopolitical tensions, higher oil prices, and weakening equities creates a less favorable environment for risk assets. Market participants will be watching closely to see how the situation unfolds and whether the correction gains momentum or reverses course.