USD

Good morning. Financial markets are staging a muted recovery as the selloff in US technology stocks eases and tensions in the Middle East ratchet lower. Major indices are on course to extend yesterday’s advance at today’s open, and risk-sensitive assets are catching a bid, giving the euro, pound and yen room to gain against the dollar. Oil prices are slipping from their highs as the conflict in the Middle East shows tentative signs of improvement. Iranian authorities announced an end to military operations against Israel, and Prime Minister Netanyahu said Israel would pause its strikes in return. President Trump told...

Good morning. The dollar is trading near a two-month high, lifted by three forces pulling in the same direction: a blockbuster payrolls report that has triggered a hawkish reappraisal of the Federal Reserve’s likely policy trajectory, a meltdown in technology stocks, and an intensifying conflict in the Middle East that is raising inflation risks further. Treasury yields are holding at elevated levels after Friday’s payrolls print convinced investors that inflation remains a bigger risk than unemployment*. The economy added 172,000 jobs in May—more than double the consensus forecast of 85,000—and the unemployment rate ticked lower. Diffusion indices showed more industries...