"Black Monday" specter: Funds pouring madly into the US dollar, Australian dollar, Rand plummeting by 1%, stock market and crude oil sharply diverging.

Notice that the United States and Iran failed to reach a peace agreement over the weekend, affecting market sentiment and increasing demand for safe-haven assets, leading to the U.S. dollar strengthening against major currencies in early trading. Risk-sensitive currencies led the decline, with the Australian dollar and South African rand each falling by 1%. Crude oil futures surged after the U.S. took action to block the Strait of Hormuz, while Asia-Pacific stock market indexes declined. Bond yields and gold also saw declines. Analysts point out that if investors believe that these negotiations represent only a temporary setback in the hope for peace, the market reaction may be limited. Andrew Ticehurst, Senior Strategist at Nomura Securities, stated that in the past week, the market has begun to focus more on the negative consequences of high oil prices on growth, rather than just its implications for inflation and central bank hawkishness. Negotiations still have a path to progress, and with the 14-day deadline set by President Trump still leaving time for dialogue, there may still be some hope for progress. Elias Hadad, Global Market Strategy Director at Brown Brothers Harriman Bank, believes that Trump's decision to announce a naval blockade of the Strait of Hormuz will reignite risk aversion this week. Oil prices may recover some of the losses from last week's ceasefire expectations, and the heightened tensions between Iran and China, a major buyer of Iranian oil, will also increase market uncertainty. The energy shock may not be over yet, but we believe the worst may have passed. If so, interest rate differentials between the U.S. and other major economies will continue to anchor the dollar index in the range of 96.00-100.00 over the next few months. Kenneth Wu, Senior Director of Private Wealth Management at Great Eastern Management, stated that the failure to reach an agreement keeps geopolitical risk premiums in the market elevated. Historically, such breakdowns in negotiations tend to lead the market towards safe-haven assets at the opening, which means both the U.S. dollar and U.S. bonds will find buying support. The key question on Monday is whether the market interprets this as a temporary breakdown in negotiations or a structural breakdown of the ceasefire framework. This difference will determine whether risk aversion quickly fades or extends further.