IRAN: Mehr News-Military Drills Launched Focusing On Monitoring Enemy Movement
Jun-12 10:01
Islamic Revolutionary Guards Corps (IRGC)-linked Mehr News reports that the country's armed forces are launching military drills with a "focus on [monitoring] enemy movements". Amid speculation that Israel could launch strikes on Iranian nuclear facilities "within days", and with the US evacuating non-essential personnel from embassies in the region, the prospect of an outbreak of inter-state armed conflict is as high as it has been since the tit-for-tat airstrikes between Iran and Israel that ran from April to October 2024.
- The current situation would appear to present greater risks to regional stability and security, given that Israel could strike Iran's nuclear sites, viewed as a major escalation compared to previous attacks on military facilities.
- IRGC Major General Mohammad Bagheri, Chief of Staff of the Armed Forces, stated that the purpose of holding these exercises is to enhance the defence and deterrence capabilities of the armed forces and assess their readiness.
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BOE: Pill: Remain concerned about structural change in price and wage behaviour
May-13 10:01
- Pill was asked in the Q&A for his speech about whether the MPR forecasts could be used as an endorsement of market rates. He replied that is a "logical set of conclusions" but that "both individual members of the MPC and the collective view of the MPC have looked at things beyond that forecast."
- "I remain concerned that we have seen a sort of structural change in price and wage bevaiour, may be driven by the type of things that were embodied in the models... from the 70s and 80s.... due to real income resistance, both in the entrepreneurial sector...and in the labour sector in terms of wages... if you believe that, not only does that mean inflation, it would mean, in response to new shock, it may be more and it may mean that the response ensure that we get back to our target within a reasonable time needs to be somewhat more aggressive."
US NFIB APR SMALL BUSINESS INDEX 95.8
May-13 10:00
- US NFIB APR SMALL BUSINESS INDEX 95.8
FOREX: Closely Monitoring 50-Day EMA Support for EURUSD
May-13 09:52
- The Euro has been unable to garner much support on Tuesday, spending the majority of the session consolidating just above the 1.11 mark, up 0.2% on the session. The single currency relatively underperforms the likes of AUD, NZD and CHF in G10. The de-escalation in global trade tensions remain the primary driver behind the repositioning in EURUSD, however, stalled negotiations between the EU/US are likely providing an additional EUR headwind.
- From a trend perspective, recent EURUSD weakness appears corrective as key signals remain bullish. However, the pair has breached the 20-day EMA and pierced 1.1082, the 50-day EMA. A clean break of the average would strengthen a bear threat and signal scope for a move towards 1.1026, the 38.2% retracement of the Feb 3 - Apr 21 bull cycle.
- BBVA have noted that even if there is additional USD strength in the short term, they view these levels as good opportunities for long positions in EUR to hedge against the medium- to long-term rise that they expect for the pair.
- In similar vein, Nordea point out that fiscal stimulus and targeted investment policies will support economic growth next year. With global portfolios still heavily concentrated in US assets, even a modest rotation toward Europe could provide meaningful support to the euro.
- Nordea expect a broader diversification of assets and currencies to unfold over several years. They believe EURUSD will move up toward the 1.20 level by the end of 2026, but would not be surprised if it could play out even faster.
- ING think EURUSD has completed a first leg in a sequence of what could be a multi-year bull trend. They imagine this current corrective dip will find good buyers in the 1.1030/50 area, with outside risk of a move down to 1.0850. This week's decline makes ING feel more comfortable about their year-end target of 1.13, which otherwise had looked too conservative.
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