Trump says no U.S. attack on Iran before the midterm election

What happened

President Donald Trump said the United States would not attack Iran before the midterm election. He described contacts with Tehran as productive, according to a report.

The report noted that the war with Iran has pushed oil and gas prices higher, while public support for the conflict has declined.

Why it matters

Statements from a U.S. president about military action in the Middle East feed directly into the energy risk premium, because the region is central to global crude supply and shipping routes. Signals that strikes are off the table for a period, or that negotiations are under way, change how traders price that risk, and the adjustment can be quick and two-sided.

Energy prices also feed into inflation expectations, which in turn touch rate expectations, the dollar and equity indices. Gold is commonly used as a hedge against geopolitical and policy uncertainty, so shifts in the conflict outlook and in domestic political dynamics ahead of a national vote tend to register across oil, currencies, metals and stock benchmarks.

What to watch

Further statements from Trump and from Tehran on the state of their talks, any change in the stance on military action, and the approach of the U.S. midterm election referenced in the report.