Europe Summary and Highlights 15 Jun
Oil cements further pullback to $80~ mark, risk firms and front end yields off
Uncertainties remain, but that is a given
EUR/USD sits at 1.16~, USD/JPY around 160~, key central bank meetings ahead
NOK/SEK sees further pullback, CHF gets through referendum risk-event
European morning session
Not a hue amount of follow through momentum on show in the European morning, at least in FX – the positivity on the planned deal signing on Friday remains from overnight, albeit as does some uncertainty over some of the fudge elements (Israel in Lebanon, nuclear details, exact nature of the Strait opening and so on).
Still, determination to reach the exit ramp on show and oil is -$4 ½ on front month Nymex around $80. EUR/USD sits on the regained 1.16~ level. NOK/SEK sees further measured profit-taking retracement. Nasdaq future +2% amid generally firmer risk and lower bond yields (DE2 -6bp and back towards May range lows for instance).
At the weekend, the Swiss votes no on the cap-the-population referendum (around 55% against), heading off potential EU conflict and CHF risk. USD/CHF -0.5%, rolling back from recent 0.8~ resistance, EUR/CHF also leaning lower.
Asia session
After weeks of back and forth bombing, U.S.-Iran have finally come to an agreement to ceasefire and reopen the Strait of Hormuz. While the details maybe ambiguous in future negotiations, the Strait of Hormuz and U.S. naval blockade will be lifted within 30 days. There will also be a sanction relief for Iranian oil & petrochemical sales and half of frozen asset will be released before the next round of negotiation. Market is cheering yet Trump is pouring cold water by says US will resume Iran strikes if it can't reach a nuclear accord. Nevertheless, major equities are happy, so as precious metal. AUD/USD is trading 0.43% higher at 0.7075. NZD/USD is trading 0.37% higher while USD/CAD slips 0.12% with oil down more than three dollar/b.
The market is expecting the BoJ to hike by 25bps in June with the central bank likely lock and loaded. The hike has been teased for months and mostly being priced in, the bond purchase program and forward guidance would be more closely watched. USD/JPY is trading 0.1% lower at 160.03. Else, EUR/USD is up 0.37% and GBP/USD is up 0.3%.