EUR/USD, USD/JPY flows - Deal rejection; dollar stays propped but stretched
Trump rejects Iran deal, though talks continue. Brent dials back to nearer $110 than $100
Yields just off last week's highs, dollar stays propped but largely inside days after stretched run
Another week, another hyped deal comes and goes, at least for now. Brent up another $2 with the front month back to nearer $110 than $100 again (last $107.60) after Trump rejects the Iran proposal. Trump tells Axios that he expects negotiators to continue to talk this week so it remains within the realms of hard balling. The market for now does have to dial down the probabilities of a deal getting across the line soon all the same. US yields remain poised just off last week’s highs and equities are a little softer, Nasdaq off around 0.8%.
Minutes to the July meeting (when rates paused), showed some members discussing the need for rate hike to speed up and to move nearer neutral although nothing really new there (especially with one of the members likely Takata, who has already spoken at length of the need for nimble policy). Summary of Opinions to the hiking Sep meeting Thursday will be watched much more closely for any fresh direction.
US-Iran aside, Monday’s a relatively quiet day on the calendar. Dollar has a touch of support but largely trading fairly tight inside days on most pairs so far today, consolidating some speedy runs towards stronger levels. High profile US data releases this week including PCE and payrolls, and the market reactions out of them, will be the next big test.