Europe Summary and Highlights 22 Sep
Brent tests below $100 with eyes on UN meeting Iran diplomacy
Press reports float Iran proposal to open Strait in exchange of ease in blockade
USD/JPY re-tests 157 support after earlier look up in range
Europe
All eyes on Iran and Middle East news with the focus on diplomatic efforts at the UN meetings. After initially opening slightly higher, Brent has broken just below $100, down $1 and with a day low of $98.60~.
Driving the action was a Kyodo News report suggesting Iran had offered to open the Strait within 7 days on condition of the US easing its blockade. Devil will be in the details, but plays generally to the notion that the UN meet provides the window for possible renewed deal making efforts. Trump could certainly do with a pre-midterm “victory” with polls down at extreme lows.
USD/JPY initially looked a little higher in the 157-8 band but now back to re-testing through support. Japan on holiday early week, wary of MoF gatekeeping. Oil dip is also a net Japan positive, if also bolstering risk. US10s also -2bp and edging off the 5% level against this backdrop
NZD sees a ½% bounce. RBNZ’s Breman somewhat hawkish (albeit with oil key), and move is reactive after steep recent selloff towards 3month lows.
Various central bank speakers due but main focus remains on the leaks, rumours and reports out of the Iran talks.