Deal is Bullish But Risk-Reward Poor: 3-Minute MLIV

Mark Cudmore discusses the short-term market implications of the prospective US-Iran deal. He sees a positive risk-on bias for this week, driven by the deal, a successful IPO, and passive flows, but cautions that the trade is not exciting because much good news is already priced in. He also notes that central bank policy expectations remain largely unchanged. - US-Iran deal momentum seen as short-term positive for risk sentiment. - European stocks expected to bounce on deal hopes and supportive flows. - Risk-reward is deemed poor because the deal was largely priced. - No negative catalysts present to justify a bearish stance this week. - The deal only marginally helps central banks look through inflation. - ECB and BOE are still expected to hike rates further this year. - The Fed remains in a tough spot and may ultimately need to hike.