Iranian Parliament speaker Mohammad Bagher Ghalibaf resigned from Tehran’s negotiating team, according to Israel’s N12 News. The report said the resignation followed an intervention by the Islamic Revolutionary Guard Corps (IRGC).
Ghalibaf had recently said there are no radicals or moderates in Iran and described all as “Iranian” and “revolutionary”. Israel’s Channel 12, citing US officials, also reported that US President Donald Trump is not eager to resume the war, but may not have a choice.
Markets Turn Risk Off
After the Ghalibaf headline, market mood moved towards risk-off and US equities turned negative. The US Dollar Index (DXY) rose 0.26% to 98.85.
WTI oil gained more than 4% and moved towards $97.00 per barrel. Gold extended losses to 0.70% and moved towards $4,700.
“Risk-on” and “risk-off” describe whether markets favour higher-risk assets or safer ones. Risk-on is linked with rising shares, most commodities and some commodity-linked currencies, while risk-off is linked with stronger bonds, gold and safe-haven currencies such as the US Dollar, Japanese Yen and Swiss Franc.
The resignation from Iran’s negotiating team suggests a hardliner takeover of the talks, dramatically increasing geopolitical risk. We are seeing an immediate shift to a risk-off sentiment, similar to what we witnessed during the initial escalations in 2025. Derivative traders should prepare for heightened volatility in the coming weeks, as the CBOE Volatility Index (VIX) has already jumped over 15% to 22.5, signaling rising fear in the equity markets.
Oil Currency And Volatility Outlook
This tension directly impacts oil markets, with WTI crude already pushing past $97 a barrel. Any further escalation threatens passage through the Strait of Hormuz, a chokepoint for nearly 20% of global oil supply, creating a scenario where prices could rapidly approach the $110 highs from last year. Traders should consider buying near-term call options on major oil ETFs to capitalize on this potential price spike.
In the currency markets, we are seeing a classic flight to safety, with the US Dollar Index (DXY) approaching the psychologically important 99.00 level. This strength is driven by investors seeking the liquidity and security of US Treasurys. We expect this trend to continue, favoring long positions on the dollar against commodity-backed currencies like the Australian and Canadian dollars, which suffer from a dimming global growth outlook.
This risk-averse environment makes commodity currencies particularly vulnerable. The Australian Dollar is already down 0.8% against the Japanese Yen, a traditional safe-haven currency. We view shorting pairs like AUD/JPY or NZD/CHF as an effective way to express a bearish view on global risk sentiment.
Gold’s initial dip toward $4,700 is being driven by the surge in the US dollar, which makes the metal more expensive for foreign buyers. However, this is likely a temporary effect, as sustained geopolitical fear typically fuels demand for gold as a true safe-haven asset. This short-term weakness may present a valuable opportunity to purchase call options, betting that underlying security concerns will soon overtake the impact of dollar strength.
