Next week might be the week that determines the direction of Q4. The big variable is still oil prices. WTI. The agreement between Iran and Saudi Arabia doesn’t mean the Strait of Hormuz will reopen. For Iran to reopen the Strait of Hormuz, the U.S. needs to resume fulfilling its commitments under the 'Islamabad Memorandum of Understanding.' WTI. This means that even if tomorrow’s meeting reaches some kind of agreement, it still depends on the U.S. If the U.S. continues to block and strike, then the strait still won’t be expected to reopen, oil prices will remain high, and might even rebound above $100. Look at today—on Binance, oil prices slightly rebounded from $95 to over $96. The 24/7 volatility of $BTC inevitably triggered some downward movement too. Let’s hope the U.S. can take a step back next week and let oil prices gradually come down. As of this post, the probability of a rate hike in September is already close to 87%. If Trump compromises next week and there’s an expectation of the strait reopening, WTI oil prices could gradually fall to $93 or even below $85. Even if there’s a rate hike, the market would interpret it as dovish, at least not as the start of a continuous rate hike cycle. If it’s just a one-off in September, then once it’s done, the negative sentiment would be priced in, and the market could rebound. If there’s no rate hike and oil prices drop, that would be even more of a boost for risk markets. But if Trump refuses to compromise, continues the strikes and blockades, oil prices will stay in the $95–$98 range or even higher. Whether or not there’s a rate hike in September, this would still be bearish sentiment. It might even lead the market to expect the start of a rate hike cycle, which would be the worst-case scenario, as mentioned before. But these high oil prices aren’t just unbearable for the U.S.—the whole world is feeling it. Since February, WTI has stayed above $100 for no more than 21 days in total (we’ve calculated this before). Once it goes above $100, inflation pressure is inevitable. And now that we’re halfway through September, the midterm elections are getting closer. Is Trump really not going to compromise at all?