Europe Summary and Highlights 24 June
The USD sell off in Asia with the decline in oil prices and reduction in global risk, has not followed through in Europe with the USD consolidating.
The USD sell off in Asia with the decline in oil prices and reduction in global risk, has not followed through in Europe with the USD consolidating. Traders believe that the Iran/Israel ceasefire will likely hold, but the focus is shifting to look at the Fed again with hawk Bowman having hinted at a July Fed rate cut. While the market bias is for further small USD losses in the next 24/48 hours, traders feel that Powell may not want to shift too radically from the stance at last week's FOMC meeting at today’s semi-annual testimony.
Some traders are also focusing on NATO expected announcement of a hard military spending target of 3.5% of GDP by 2025, which is seen as EUR positive in geopolitical terms.
Asia session
After Trump public announcement on his social media that he has brokered a ceasefire deal between Israel and Iran, it has been officially confirmed by Israel and Iran officials in the past two hours. The last round of rocket exchanges seem to be done for now and we see USD softens. USD/JPY slipped 0.42% to 145.51 with JGB yields outperform U.S. counterpart.
Major equity indexes are gaining strongly on the ceasefire between Israel and Iran. Iranian officials have explained the last wave of missiles against Israel were fired before the supposedly deadline. It seems to suggest they have not taken a hardliner attitude for now. AUD/USD is trading 0.57% higher at 0.6496, NZD/USD is trading 0.57% higher at 0.6011 while USD ISD/CAD slips 0.12%. Else, EUR/USD is up 0.28% and GBP/USD is up 0.31%.