MNI ASIA MARKETS ANALYSIS: US/Iran Tensions Simmer, CPI
HIGHLIGHTS
- Another round of cautious optimism on a peace deal in Iran prompted some modest weakness for the US dollar early on Tuesday, with the USD index slipping back below 100 to a session low of 99.68.
- Sky News Arabia reported that the draft agreement has been sent to the American side for its review, with confirmation that the draft is preliminarily acceptable to the American administration.
- Risk sentiment for stocks evaporated after earlier IDF headlines (re: prepared to return, strike Iran again) and again after Trump posted the need to respond militarily to the downing of a US attack helicopter near the Strait of Hormuz.
- US CPI highlights the data calendar on Wednesday, alongside the BOC decision. Focus then shifts to the ECB decision on Thursday, where the GC is expected to deliver a 25bp hike.
US TSYS
MNI US TSYS: Tension Flares, Trump Warns Iran After Chopper Downing, CPI up Next
- Treasuries look to finish near midsession highs after some two-way geo-pol related volatility Tuesday. Sky News Arabia reported that the draft agreement has been sent to the American side for its review, with confirmation that the draft is preliminarily acceptable to the American administration.
- However, crude bounced off session lows after President Trump posted on Truth Social to say he would respond to the Iranian downing of a US helicopter, threatening to raise tensions. While it may contradict Trump’s statements earlier of progress to a deal, the US may think it can take some form of limited action without completely derailing the talks.
- Weekly ADP private employment increased an average 29.0k per week in the four weeks to May 23, slightly moderating from 30.5k in the prior week (a new value for the weekly series but one that chimed with the monthly series released instead that week) and an unrevised 35.75k the week before that.
- Focus on CPI tomorrow morning, inflation expected to moderate to a still elevated pace in May, with MNI unrounded consensus pointing to 0.51% M/M for headline CPI and 0.23% M/M for core CPI. It should see headline CPI jump further to 4.2% Y/Y with a risk of 4.3% (either strongest since Apr 2023) whilst core CPI would see a more modest acceleration to 2.8-2.9% Y/Y (strongest since Sep 2025).
- TYU6 trades +5.5 after the bell to 109-06.5 (108-27.5 low). Resistance to watch is 110-04, the 50-day EMA. The bear trigger lies at 108-08+, the May 19 low. Clearance of this level would confirm a resumption of the downtrend.
- Today's 3Y Note sale (91282CQV6) tailed slightly: 4.192% high yield vs. 4.190% WI; 2.64x bid-to-cover over the 5-auction average of 2.616x.
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.63% (+0.00), volume: $3.115T
- Broad General Collateral Rate (BGCR): 3.61% (+0.00), volume: $1.298T
- Tri-Party General Collateral Rate (TCR): 3.61% (+0.00), volume: $1.254T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.62% (+0.00), volume: $108B
- Daily Overnight Bank Funding Rate: 3.62% (+0.00), volume: $233B
FED Reverse Repo Operation
RRP usage at $0.577B with 13 counterparties this afternoon vs. $1.832B Monday. Compares to last year's highest excess liquidity measure: $460.731B on June 30.
US SOFR/TREASURY OPTION SUMMARY
SOFR & Treasury options trade outlined below: flow mixed overall after leaning toward upside SOFR & Tsy call structures. Underlying futures modestly higher - near early Monday highs. Projected rate pricing (hike) looks steady to mildly cooler vs late Monday levels (*) with Dec still projected first 25bp hike: Jun'26 at +.7bp (+.7bp), Jul'26 at +3.9bp (+3.9bp), Sep'26 at +11.5bp (+13bp), Oct'26 at +16.4bp (+17.9bp), Dec'26 +25.5bp (+27.6bp).
SOFR Options:
+5,000 SFRQ6 96.18/96.31/96.37 put flys 1.25
+4,000 SFRU6 95.87/95.93/96.31/96.37 call condors 4.5
+2,500 SFRZ6 96.00/96.12/96.25 call flys, 1.0
+10,000 2QM6 96.00 puts, 2.0 vs. 96.06/0.24%
7,500 SFRU6 96.25 puts, 12.25
+8,000 SFRH7 96.25/96.875 2x1 put spds, 9.75 vs. 95.95/0.26%
+4,000 SFRZ6 95.87/96.00/96.12 put trees, 1.5 ref 96.05
+4,000 0QN6 96.00/96.12/96.19 call trees, 0.5
over 30,000 SFRU6 96.06/96.18/96.31/96.43 put condors
1,000 SFRU6 96.12/96.25/96.37/96.50 put condors ref 96.20
1,400 SFRU6 96.00/96.50 strangles, ref 96.20
3,700 SFRU6 96.25/96.31/96.37 call trees, 0.0 ref 96.20
4,700 SFRZ6 96.25/96.37/96.43 broken call trees ref 96.045
+8,000 SFRZ6 96.18/96.25/96.37/96.43 call condors, 2.0 ref 96.045 to -.04
1,000 SFRU6 95.93/96.06/96.18 1x3x2 put flys, .75 ref 96.19
2,500 SFRZ6 96.31/96.43/96.56 call flys ref 96.02
Treasury Options:
5,000 TYU6 114.5 calls, 5 ref 109-02.5
6,000 TYQ6 109 puts, 46 ref 109-04
+9,900 TUQ6 103.5 calls, 5
+6,500 TYN6 109.25/110 1x2 call spds, 7 ref 109-05.5
+13,000 USN6 110 puts, 20 ref 111-21
+55,000 TYN6 110 calls, 10 ref 109-05 to -04.5 (adds to some +75k yesterday, OI +26.5k)
4,000 TUN6 103.12/103.37 2,3 call spds ref 103-00.75
9,700 TYN6 109.5/110/111 broken call flys, 3 net ref 109-03.5
5,200 Wed wkly TY 108.75 puts, 4 ref 109-02 to -02.5, exp tomorrow
-4,000 TYN6 109/110.5 1x2 call spds, 23 ref 109-02/0.40%
Block, 5,000 TYN6 110/110.25 call spds, 3 ref 109-02
-2,000 FVN6 106.25 puts, 11.5 vs. 106-22.25/0.08%
1,500 wk3 TY 108.75/109.5 2x5 call spds, 11 net (exp 6/18)
-3,000 wk2 TY 109.25 calls, 10
7,100 TYN6 111.5/112 call spds vs. 3,550 113.5 calls, 0.0 net
EGBS
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 4.7bps at 4.331%, 5-Yr is down 4.4bps at 4.46%, 10-Yr is down 4bps at 4.903%, and 30-Yr is down 3.3bps at 5.591%.
- UK: The 2-Yr yield is down 4.7bps at 4.331%, 5-Yr is down 4.4bps at 4.46%, 10-Yr is down 4bps at 4.903%, and 30-Yr is down 3.3bps at 5.591%.
- Italian BTP spread vs Bunds is down 1.6bps at 75.8bps
MNI FOREX: Initial Dollar Weakness Reverses as Equities Slump
- Another round of cautious optimism on a peace deal in Iran prompted some modest weakness for the US dollar early on Tuesday, with the USD index slipping back below 100 to a session low of 99.68. However, this optimism then dissipated and as the major equity benchmarks extended to fresh pullback lows, the DXY edged back to unchanged levels on the session.
- With risk sentiment dented, Scandinavian currencies are the weakest performers across the G10, closely matched by the Australian dollar.
- For AUDUSD, spot levels around 0.7015 represent 8-week lows for the pair. The sharp sell-off on Friday highlighted a clear break of the 50-day EMA (intersecting now around 0.7120), and the break of this average has prompted a deeper retracement. The next downside levels of note are 0.6986, the Apr 13 low and 0.6938, the 76.4% retracement of the Mar 30 - May 6 bull leg.
- Relative underperformance compared to its antipodean counterpart has seen AUDNZD move 0.4% lower on the session. Potentially assisting this theme was a change of call by analysts at National Australia Bank (NAB), who no longer expect the RBA to hike by 25bp in Aug, and believe the next move for the cash rate is likely to be down.
- USDJPY made a fresh post-intervention high of 160.45 today, further narrowing the gap to the pre-intervention highs of 160.72 and placing further pressure on the MoF. The BOJ will consider halting its quarterly reductions in bond buying from April 2027 according to matching overnight sources reports. This would be a dovish move, keeping JGB yields artificially low, which could add to pressure on the yen over the medium-term.
- In emerging markets, the Peruvian sol has surged 3%, extending a sharp turnaround following Sunday’s second round runoff vote. Prediction markets lean heavily towards the market friendly candidate Fujimori prevailing.
- US CPI highlights the data calendar on Wednesday, alongside the BOC decision. Focus then shifts to the ECB decision on Thursday, where the GC is expected to deliver a 25bp hike.
MNI US STOCKS: Late Equities Roundup: Off Lows Amid Geo-Pol Headline Driven Vol
- Equities are mixed late Tuesday, off midday lows after some sharp geo-political related headline volatility. Though well ahead of month end positioning - June quarterly index rebalancing was also cited as a potential factor behind equity indexes retreating to early May levels before rebounding in late trade: the DJIA +.11%, SPX emini -0.45%, Nasdaq -1.1%.
- Risk sentiment for stocks evaporated after earlier IDF headlines (re: prepared to return, strike Iran again) and again after Trump posted the need to respond militarily to the downing of a US attack helicopter near the Strait of Hormuz.
- Striking a more realistic tone, Anadolu wrote: "Reaching agreement to end war between US and Iran within next few days is 'unlikely' due to ongoing 'complex situation,' Pakistani government sources told Anadolu. Sources cite Israel’s 'non-stop' ceasefire violations in southern Lebanon".
- IT and Energy sector shares continued to lead late session declines, AI-infrastructure demand cooling as Coherent Corp trades -11.2%, followed by Lumentum Holdings, QUALCOMM, Super Micro Computer, Corning and ServiceNow - all down 7.5-9.0%.
- The Energy sector is weighed down by oil and gas shares as crude prices retreat (WTI -3.25 at $88.05/bbl): APA Corp, Valero Energy, Halliburton Co, SLB Ltd and Devon Energy Corp trade -2.5-4.0%.
- On the positive side, estate management shares buoyed the Real Estate sector: with CBRE Group +3.9%, CoStar Group +1.7% at the moment.
MNI EQUITY TECHS: E-MINI S&P: (M6) Pullback Considered Corrective
- RES 4: 7652.24 3.618 proj of the Apr 23 - 28 - 29 price swing
- RES 3: 7632.25 High Jun 1
- RES 2: 7591.00 Hugh Jun 5
- RES 1: 7467.60 20-day EMA
- PRICE: 7370.50 @ 1445 ET Jun 9
- SUP 1: 7247.25 Intra-day low
- SUP 2: 7285.93 50-day EMA
- SUP 3: 7200.00 Round number support
- SUP 4: 7131.25 Low Apr 29
The trend in S&P E-Minis is bullish and short-term pullback’s appear corrective. Friday’s move down resulted in the break of an important short-term support at 7467.60, the 20-day EMA. The clear breach of this average suggests scope for a deeper short-term retracement towards 7285.93, the 50-day EMA. Note that the 50-day EMA is considered a key support. Key resistance and the bull trigger is 7632.25, the Jun 1 high.
MNI COMMODITIES: Crude Falls on US-Iran Deal Hopes, Precious Metals Decline
- Crude oil has fallen sharply on Tuesday as hopes around a US-Iran deal have risen again amid reports that the US has been sent a new draft agreement and that Hezbollah could agree to a comprehensive ceasefire.
- WTI Jul 26 is down by 3.1% at $88.4/bbl.
- Sky News Arabia reported that the draft agreement has been sent to the American side for its review, with confirmation that the draft is preliminarily acceptable to the American administration.
- However, crude bounced off session lows after President Trump posted on Truth Social to say he would respond to the Iranian downing of a US helicopter, threatening to raise tensions.
- While it may contradict Trump’s statements earlier of progress to a deal, the US may think it can take some form of limited action without completely derailing the talks.
- From a technical perspective, the trend condition in WTI futures remains bullish and recent weakness appears corrective.
- The contract has traded through a key area of support at $90.51, the 50-day EMA. A clear breach of this would highlight a top and the start of a stronger correction, opening $77.22, the Apr 17 low.
- Meanwhile, precious metals have also pulled back today, with spot gold down by 1.4% at $4,269/oz and silver declining by 4.0% to $65.5/oz.
- A bear theme in gold remains intact, with scope seen for an extension towards the next key support at $4,099.2, the Mar 23 low.
WEDNESDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 10/06/2026 | 0600/0800 | ** |  SE | Private Sector Production m/m |
| 10/06/2026 | 0600/0800 | *** |  NO | CPI Norway |
| 10/06/2026 | 0700/0300 | *** |  CZ | Czech Republic Final CPI |
| 10/06/2026 | 0800/1000 | * |  IT | Industrial Production |
| 10/06/2026 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 10/06/2026 | - | *** |  CN | Money Supply |
| 10/06/2026 | - | *** | CN | New Loans |
| 10/06/2026 | - | *** | CN | Social Financing |
| 10/06/2026 | 1200/0800 | * | US | NY Fed SOFR |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1230/0830 | *** | US | CPI |
| 10/06/2026 | 1300/0900 | * | US | NY Fed EFFR |
| 10/06/2026 | 1345/0945 | *** |  CA | Bank of Canada Policy Decision |
| 10/06/2026 | 1430/1030 | CA | BOC press conference | |
| 10/06/2026 | 1430/1030 | ** | US | US DOE Petroleum Supply |
| 10/06/2026 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 10/06/2026 | 1700/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 10/06/2026 | 1800/1400 | ** | US | Treasury Budget |
| 10/06/2026 | - |  TR | Central Bank of Republic of Turkiye Meeting |
