Welcome to today's market roundup. Let's dive into the key developments.

Cryptocurrency markets have taken a sharp hit. Bitcoin is down 2.53%, Ethereum is off 3.22%, and Ripple has fallen 4.18%. According to CoinGlass data, more than 150,000 traders have been liquidated across the crypto market in the last 24 hours.

Trump Warns of Strong Military Action if Iran Talks Fail

On April 27, US President Donald Trump stated that the US is currently engaged in "deep talks" with Iran. However, he warned that if diplomatic efforts fail, the US will resume "strong military action." Trump revealed that he had postponed a planned military strike on Iran on April 24 to allow room for diplomacy, a decision made at the request of several mediating countries in the Middle East. He emphasized that the window for a diplomatic breakthrough with Iran is "very short."

Iran's Armed Forces Warn Against US Naval Blockade

On the same day, the central headquarters of Iran's Khatam al-Anbiya Air Defense Base issued a statement. It accused the US of exacerbating regional insecurity through an illegal naval blockade, which has threatened commercial ships and oil tankers in Iranian coastal and territorial waters over the past three days. The statement warned that such US actions will be seen as an escalation of war in the region, and Iran's armed forces will not tolerate any US threats and will respond accordingly.

Trump Claims Living Costs Are Falling Rapidly

The Federal Reserve is set to hold its policy meeting on July 28-29. When asked about the upcoming meeting, Trump claimed that living costs are falling rapidly. According to the CME FedWatch Tool, the probability of the Fed holding interest rates steady in July is 63.7%, while the chance of a 25-basis-point hike is 36.3%. Looking ahead to September, the probability of rates staying unchanged is 18.5%, with a 55.7% chance of a 25-basis-point hike and a 25.8% chance of a 50-basis-point hike.

Morgan Stanley on Position Trends

Morgan Stanley strategists, citing data, reported that investors have increased their long dollar and short sterling positions ahead of the Federal Reserve and Bank of England meetings this week. "Options pricing indicates investors have added long dollar index positions and short sterling positions," strategists Molly Nickolin, David Adams, and Andrew Watrous wrote. They noted that options data point to long dollar positions, a trend also supported by futures market data. Asset managers are primarily long euro and short sterling, while leveraged funds are long sterling and short the New Zealand dollar.

Geopolitical Risk Premium Fades, Container Shipping Index Falls

Following signs of easing tensions in the Middle East, the Shanghai Containerized Freight Index (SCFI) for the European route futures fell on Monday. The main August 2026 contract dropped 1.04%, while the October 2026 contract fell 6.38%. The Shanghai Shipping Exchange's post-market report on Monday showed the SCFI for the European route at 3,718.93 points, down 3.5% week-on-week, while the US West Coast route fell 15.9% to 3,617.66 points.

Lei Yue, head of the shipping research team at Haitong Futures, noted that last week's rally in container shipping futures was driven by geopolitical risk premiums, not fundamental improvements. The renewed US-Iran conflict and the Houthis' blockade of Saudi-linked maritime activities led to expectations of reduced effective capacity on Middle East routes, creating a spillover effect on global shipping markets. However, with signs of a Middle East detente, the accumulated risk premium is rapidly unwinding, leading to a price decline.

Lei explained that the market structure shows far-month contracts are more volatile than near-month contracts. Near-month contracts are more anchored to spot market fluctuations, while far-month contracts (from September onward) are more sensitive to geopolitical expectations. "The current market follows a dual-driver logic: near-term contracts depend on spot prices, and far-term contracts depend on geopolitical factors," Lei said. The spot market has entered a price-cutting cycle, but initial declines are modest. The average spot price for the 31st week is around $4,820/FEU, with actual booking prices at $4,200-$4,500/FEU, down from recent highs. Far-month contracts will need to focus on whether the Middle East situation can continue to ease and the navigability of the relevant waters.

Wu Jialu, a shipping analyst at CITIC Futures, added that beyond geopolitical cooling, the European route fundamentals are transitioning from peak season to off-season. The SCFI has fallen for three consecutive weeks, with rates on most routes declining except those directly affected by geopolitical factors. The latest Maersk quotation for WK32 from Shanghai to Rotterdam is $4,600/FEU, down $200/FEU from the previous rate.

Wu also highlighted uncertainty from US trade policy. Previously, tariff policy windows created some front-loading demand, which supported US routes. If the US raises tariffs further, US route volumes could be pressured, dragging down overall shipping demand. Looking ahead, Wu advised the market to monitor the pace of spot rate declines, developments in the Middle East, and changes in US trade policy, while also keeping an eye on Maersk's latest opening rates. Other factors to watch include August European route capacity, port congestion, and the European heatwave.