USD, GBP/USD flows: Still exchanging Iran threats; Mansion House non-event
Iran-US continue to exchange threats, Bab el-Mandeb Strait highlighted
Quiet morning; last night's Mansion House speech largely uneventful
Pretty tight consolidation overnight. Iran news continues to bubble as they threaten to close the Bab el-Mandeb Strait to put further pressure on oil prices, while Trump threatens energy strikes as a last resort. Oil prices holding pretty steady around the marked-up levels ($85~ on Brent front month), with the market still ultimately skewing towards scenarios where Iran come back to negotiation table again.
It’s a quiet calendar this morning, Eurozone industrial production expected to come in around 0.2% on the month to see the yr/yr rate slip back negative. US PPI data and the BoC meeting due later. BoE Bailey’s Mansion House speech last night meanwhile was not especially GBP sensitive, mainly talking against a ‘reductive’ argument for further deregulation, while also discussing the regulation risk around AI. GBP/USD like EUR/USD sitting on the high side of recent consolidation.