EUR/USD, USD/JPY, DXY flows - still low vol summer usd/risk versus Iran standoff
Better risk/usd tone holds in, amid low vol and equity resilience
The question mark remains for how long as both US and Iran play the long game stand off
Still that twin-track thin summer trend right now: with the dollar leaking out, especially vs risk counters, with the Fed bet retreats, and amid the low volatility and firm equity tone; while at the same time energy prices hold on the firm side, albeit slightly checked by recent higher inventories than expected. Still no sign of any relent in the battle of attrition with Iran calling on the US to accept defeat if they want the Strat open and Trump seemingly refocusing on the not very promising avenue of waiting out Iran economic pressure and for Americans to accept a little bit higher gasoline as a price.
None of this is really suggesting any impetus or desire to be expediting things before the Us elections. Crack spreads remain an issue with diesel prices, for instance, up at levels when oil was last up at the $110~ highs but otherwise recent energy upside slightly checked by current supply-demand holding better than feared, for now. It’s an environment where the current low vol usd/risk mood is holding but you wonder how long out of the summer doldrums.