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Good morning. Financial markets are rallying on hopes for a renewal of diplomatic engagement in the Middle East, with some media outlets reporting that US and Iranian negotiating teams could return to Islamabad for talks later this week. Oil prices are retreating, Treasury yields are coming under renewed pressure, equity markets are setting up for a positive open, and most major foreign exchange pairs...
Hopes for a swift resolution to the war in the Middle East were shattered over the weekend when US-Iran peace talks collapsed and President Trump announced plans to blockade the Strait of Hormuz. Tehran reportedly baulked at several American red-line demands during Saturday’s negotiations, refusing to dismantle uranium-enrichment facilities, halt funding for regional proxies, or guarantee free...
• US/Iran conflict. Weekend talks ended without an agreement. Energy prices jumped this morning. USD firmer. AUD & NZD lose ground.• Macro risks. US threatens to blockade the Strait of Hormuz. Downside risks to global economy remain. Volatility expected to continue for a while yet.
Global Trends
Market sentiment was underpinned last week by the US/Iran ceasefire news. There was a solid rebound...
Headline consumer price growth jumped by the most since June 2022 in the United States last month while measures of underlying pressure remained tame, underscoring the challenge facing the Federal Reserve as it struggles to balance labour market vulnerabilities against war- and tariff-related inflation risks. According to data published by the Bureau of Labor Statistics this morning, the all-items...
Markets are giving back some of yesterday’s gains as doubts mount over Tuesday’s US-Iran ceasefire agreement, with Israel pressing its assault on targets in Lebanon, Tehran showing no sign of easing its grip on the Strait of Hormuz, and all sides remaining far apart on basic terms. Both the Brent and West Texas Intermediate global crude oil benchmarks are knocking on the $100 threshold once again,...
• Holding up. Markets held onto yesterday’s gains stemming from the US/Iran ceasefire news. However there wasn’t much additional follow through in FX.• AUD & NZD. AUD near top of its ~2-week range. But lingering issues are a headwind. RBNZ’s ‘hawkish’ vibes may help NZD recoup more lost ground.
Global Trends
Risk sentiment has remained positive over the past 24hrs...