COMMODITIES: Crude Rallies On Iran Tensions, Gold Gains
Jun-11 18:24
- Crude has moved higher today, with the risk-premium rising after Trump doubted progress towards a nuclear deal with Iran and Reuters reporting that the US plans to evacuate its embassy in Iraq.
- Meanwhile, US-China trade talks appeared constructive, adding support.
- WTI Jul 25 is up by 3.9% at $67.5/bbl.
- Trump said on a podcast released today that he was less confident around an Iran deal. Iran’s Foreign Minister had earlier posted on X that a nuclear deal was “within reach” and could be “achieved rapidly.”
- Iran has threatened to target US bases if nuclear talks fail, heightening fears of military conflict, Reuters said.
- Today’s gain has seen WTI futures piercing resistance at $67.14, a Fibonacci retracement. A clear break of this level would open $71.10 next, the Apr 2 high and key resistance.
- It is still possible that the recovery since early May is a correction. Moving average studies are in a bear-mode position, highlighting a dominant medium-term downtrend. Support to watch lies at $59.74, the May 30 low.
- Meanwhile, spot gold has rebounded by 0.6% to $3,344/oz after softer-than-expected US CPI data prompted further weakness in the US dollar.
- Analysts at Saxo Bank said that gold was supported by the benign inflation print, which lifted the prospect for a US rate cut, perhaps sooner than the October date currently priced.
- A bullish theme in gold remains intact, with attention still on $3,435.6 next, the May 7 high. A break of this hurdle would strengthen bullish conditions.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: EGBs-GILTS CASH CLOSE: Bear Flattening On Sino-US Trade Truce
May-12 18:23
European curves bear flattened Monday, with periphery / semi-core EGBs outperforming.
- A tentative trade war truce between China and the US saw Bund and Gilt yields gap higher at the start-of-week reopen as equities soared in relief.
- Bear steepening was the order of the day, as ECB/BOE rate cuts were priced out, pressuring the short end.
- Elsewhere, headlines from the BOE Watchers' conference were prevalent following last week's 3-way split (ultimately 5-4 in favour of a 25bp cut).
- Lombardelli called the decision to cut 25bp "finely balanced"; Greene said she would still have voted for a 25bp cut if she knew about the US and UK/China trade developments; Taylor, who had voted for a 50bp cut, noted that he could reconsider support for lower rates if "there was a surprising amount of progress on the international trade war situation".
- Bunds underperformed Gilts. Periphery / semi-core spreads narrowed by around 2bp across the board.
- Tuesday's agenda includes UK labour market data - MNI's preview is here. We also get US CPI data.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is up 12.8bps at 1.913%, 5-Yr is up 12.3bps at 2.222%, 10-Yr is up 8.6bps at 2.648%, and 30-Yr is up 6.2bps at 3.081%.
- UK: The 2-Yr yield is up 9.2bps at 4%, 5-Yr is up 9.9bps at 4.126%, 10-Yr is up 7.6bps at 4.643%, and 30-Yr is up 4.5bps at 5.391%.
- Italian BTP spread down 1.8bps at 102.9bps / French OAT down 2.3bps at 68.1bps
US: FED Reverse Repo Operation
May-12 18:08
RRP usage inches up to $147.505B this afternoon from $142.272B Friday, total number of counterparties at 34. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B.
MNI: US APR TREASURY BUDGET $258.4B
May-12 18:00
- MNI: US APR TREASURY BUDGET $258.4B
