MNI EUROPEAN OPEN: Oil Spikes on Iran Conflict
EXECUTIVE SUMMARY
- US HAS CARRIED OUT 'SUCCESSFUL' ATTACKS ON IRAN - BBC
- FED's MONETARY POLICY REPORT UPBEAT - MNI
- YEMENI'S HOUTHIS WILL TARGET US VESSELS - BBG
- GREECE GOVERNMENT CAUTIONS SHIP OWNERS ON TRANSITING STRAIT OF HORMUZ - BBG
Fig 1: WTI Spikes on Escalation of Iran Conflict
MIDDLE EAST
US/IRAN (BBC): “President Donald Trump says the US has carried out a "successful" bombing attack on three nuclear sites in Iran and they have been "obliterated".”
US/IRAN (BBG): “The unprecedented US airstrikes on Iran have set traders and governments worldwide on edge, as the Islamic Republic warns of retaliation and Israel shows no sign of letting up in its assault.”
SHIPPING (BBG): “Yemen’s Houthis said they will target US vessels and battleships in the Red Sea if the the Trump administration gets involved to support the Israeli attack on Iran, according to a statement published on a Houthi spokesperson’s official Telegram account.”
IRAN (POLITICO): “Iran’s Foreign Minister Abbas Araghchi on Sunday announced he will travel to Moscow in the coming hours for urgent talks with Russian President Vladimir Putin, shortly after the United States launched airstrikes against three Iranian nuclear sites. Araghchi emphasized the “strategic partnership” between Iran and Russia.”
IRAN (BBG): “The Iran Nuclear Regulatory Authority says they had taken precautionary measures in anticipation of attacks on nuclear sites and there was no sign of radiation contamination, state-run IRNA news reports.”
MIDDLE EAST (BBG): “Iran's Arab neighbors, including Saudi Arabia, Qatar, and Oman, have urged restraint and warned of devastating implications for the region after US strikes on Tehran's nuclear program.”
SHIPPING (BBG): “Two supertankers both capable of hauling about 2 million barrels of crude U-turned in the Strait of Hormuz after US airstrikes on Iran raised the risk of a response that will ensnare commercial shipping in the region.”
IAEA (BBG): “The head of the United Nations atomic watchdog called for a return to diplomacy after the US strikes on Iran's nuclear program, saying there's "a window of opportunity" to return to dialogue.”
UK
GEOPOLITICS (BBC): “Sir Keir Starmer has spoken to Donald Trump in the wake of US strikes on Iran's nuclear sites, Downing Street has said. The prime minister and US president discussed the need for Iran to return to the negotiating table as soon as possible and make progress on a lasting settlement, a No 10 spokesman said.”
ENERGY (BBC): “Lowering energy costs for thousands of businesses by scrapping green levies will form a central part of the government's new 10-year industrial strategy. The plan, which may slash energy bills by up to 25% for more than 7,000 UK businesses, is set to be unveiled on Monday alongside other measures hoped to boost growth.
ISRAEL (BBC): “The UK government is organizing a chartered flight next week for British nationals who want to leave Israel.”
EU
SHIPPING (BBG): “Greece has cautioned its ship owners to reassess passage through the Strait of Hormuz until the situation normalizes, advising them to wait in nearby safe ports.”
TRADE (BBG): “The US is demanding what EU officials see as unbalanced, unilateral concessions in ongoing trade talks, which may lead to a tough decision on countermeasures if the terms of any deal don't improve.”
ECB (BBG): “The European Central Bank needs to provide the euro-area economy with "further stimulus", according to Governing Council member Mario Centeno.”
UKRAINE (BBG): “Ukraine's commander-in-chief Oleksandr Syrskyi estimates that Russia has 695,000 troops deployed across an expanded front line and 121,000 in strategic reserve. President Volodymyr Zelenskiy claims that Ukraine has evidence that Russia is preparing new military operations on European territory, citing a report by Ukraine's defense intelligence chief.”
UKRAINE (BBC): “Ukraine's top military commander says its forces are still defending a small area of territory inside Russia that it captured almost a year ago.”
NATO (POLITICO): “NATO allies have reached a deal on setting a new defense spending target of 5 percent of gross domestic product that allows Spain to spend less, two alliance officials told POLITICO on Sunday.”
NATO (BBG): “The US will present its military review after the June 24-25 summit, which may spell out significant reductions in Europe, causing concern among allies who have been kept in the dark about the plans.”
EU (POLITICO): “Von der Leyen faces political crisis after groups threaten to withdraw support. Socialists and liberals outraged that EPP sided with far right in pulling “greenwashing” legislation and could now block EU’s law-making process.”
DEFENCE (POLITICO): “The European Commission’s plan to supercharge the continent’s defense industry through a new joint funding tool may violate EU treaties, according to a legal analysis by Germany's parliament obtained by POLITICO.”
FRANCE (POLITICO): “French Prime Minister François Bayrou's pensions "conclave" is set to conclude Monday. The closed-door talks aimed at modifying the country's unpopular 2023 retirement reform were supposed to have ended last week.”
US
FED (MNI): “The Federal Reserve's latest Monetary Policy Report to Congress released Friday sounded an upbeat note on the state of the economy, arguing the current stance of monetary policy leaves the central bank well positioned to wait for more clarity on the outlook for inflation and economic activity, and to respond in a timely way to potential economic developments.”
FED (BBG): “Federal Reserve Bank of San Francisco President Mary Daly said she sees the central bank’s monetary policy stance as “in a good place” currently, with risks to its US employment and price stability mandates as roughly equal.”
SECURITY (BBG): “The US State Department issued a “Worldwide Caution” alert for American citizens, flagging the potential of travel disruptions and demonstrations following the US strikes on Iranian nuclear facilities.”
POLITICS (BBG): “The strike has divided Trump's base, with some supporting the action and others opposing it, and Trump has signaled that the US could be in for a long haul in Iran.”
NATO (POLITICO): “President Donald Trump said Friday that the U.S. shouldn’t have to abide by the same defense spending standards as the rest of NATO — potentially antagonizing leaders from the rest of the alliance days before he’s to meet with them in The Netherlands.”
GEOPOLITICS (BBG): “Belarusian President Alexander Lukashenko released 14 imprisoned opposition activists after meeting with US presidential envoy General Keith Kellogg.”
MEDIA (BBC): “Hundreds of journalists for Voice of America (VOA) - most of its remaining staff - have been fired by President Donald Trump's administration, effectively shutting down the US-funded news outlet.”
OTHER
EM (MNI INTERVIEW): “Emerging market economies have become more insulated to Federal Reserve interest rate moves than in the past, in part because of constructive reforms in fiscal, monetary and FX policy, Steve Kamin, former head of the Fed Board's Division of International Finance, told MNI.”
IMF (BBG): “IMF Managing Director Kristalina Georgieva warns that US strikes on Iran could have broader impacts beyond energy channels, adding to global uncertainty.”
CREDIT (BBG): “A selloff in risk assets pushed up credit spreads as investors brace for Iran’s response after US strikes, but several borrowers still marketed bonds in a sign that debt markets remain open in the absence of further escalation.”
ALUMINIUM (BBG): “Aluminum spiked to a three-month high on concerns that the escalating conflict in the Middle East conflict fuels supply concerns.”
AUSTRALIA (BBG): “Australia’s deputy prime minister said the nation will base defense spending on national interest, amid calls by President Donald Trump for US Indo-Pacific allies to increase military budgets.”
SOUTH KOREA (BBG): “South Korea's early trade data for June showed a 4.3% increase in exports to the US, the biggest rise this year, possibly due to front-loading ahead of a July deadline that will see broad tariffs rates more than double.”
PHILIPPINES (BBG): “Philippine Vice President Sara Duterte criticized President Ferdinand Marcos Jr. for leaning towards the US and allowing an American missile system on Philippine soil, which has angered Beijing.”
THAILAND (BBG): “Thai leader Paetongtarn Shinawatra is poised to stay on despite speculation that a key party in her ruling alliance was pushing for her resignation, with a cabinet expansion to keep her coalition intact.”
CHINA
GEOPOLITICS (SCMP) ; China sharply criticised the United States and Israel on Sunday, calling on them to de-escalate their conflict with Iran, prioritise civilian safety and adhere to international law as Mideast anxiety intensified following the US attack on three Iranian nuclear facilities using massive “bunker buster” bombs.
ECONOMY (ECO DAILY): “China should boost services consumption through promoting better supervision and consumer rights, as buyer confidence was undermined by increased disputes in culture and tourism, housekeeping, elderly care and education training sectors, said Economic Daily in a commentary.”
FINANCE (PEOPLE’S DAILY): “Mainland and Hong Kong monetary authorities on Sunday launched a new connect programme to facilitate cross-border payments, the People’s Daily reported.”
FINANCE (YICAI): “The Beijing Municipal Finance Bureau will allocate special purpose bonds (SPB) towards government investment guidance funds for the first time nationwide, Yicai.com reported.”
FINANCE (POLITICO): “The Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) — established in 2013 alongside China’s Belt and Road Initiative — aims to use the new London office to draw in funding to support the bank’s global development projects, two people familiar with the plans told POLITICO.”
MNI: PBOC Net Drains CNY21.5 Bln via OMO Monday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY220.5 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY21.5 billion after offsetting the maturity of CNY242 reverse repo today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.4357% at 09:32 am local time from the close of 1.4941% on Friday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 45 on Friday, compared with the close of 51 on Thursday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1710 Mon; +1.19% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1710 on Monday, compared with 7.1695 set on Friday. The fixing was estimated at 7.1938 by Bloomberg survey today.
MNI: China CFETS Yuan Index Up 0.43% In Week of Jun 20
The CFETS Weekly RMB Index was 95.92 on Jun 20, up 0.43% compared with 95.49 as of Jun 13.
The gauge, which compares the yuan to a basket of currencies from China's 24 major trading partners, has decreased 5.47% this year, when compares with 101.47 on Dec. 31, 2024.
MARKET DATA
AUSTRALIA S&P GLOBAL JUNE FLASH COMPOSITE PMI 51.2; MAY 50.5
AUSTRALIA S&P GLOBAL JUNE FLASH SERVICES PMI 51.3; MAY 50.6
AUSTRALIA S&P GLOBAL JUNE FLASH MFG PMI 51.0; MAY 51.0
JAPAN JIBUN BANK JUNE FLASH SERVICES PMI 51.5; MAY 51.0
JAPAN JIBUN BANK JAPAN JUNE FLASH COMPOSITE PMI 51.4; MAY 50.2
JAPAN JIBUN BANK JUNE FLASH MFG PMI 50.4; MAY 49.4
SOUTH KOREA JUNE FIRST 20 DAYS IMPORTS +5.3% Y/Y; MAY -2.5%
SOUTH KOREA JUNE FIRST 20 DAYS EXPORTS +8.3% Y/Y; MAY -2.4%
MARKETS
US TSYS: Asia Wrap - Yields Edge Higher Led by the Long-End
The TYU5 range has been 110-25+ to 111.04 during the Asia-Pacific session. It last changed hands at 110-27+, down 0-04 from the previous close.
- The US 2-year yield has edged higher trading around 3.916%, up 0.01 from its close.
- The US 10-year yield has bounced higher trading around 4.392%, up 0.02 from its close.
- (Bloomberg) -- “Treasuries may benefit from demand for haven assets and concerns over an economic slowdown unless oil prices rise dramatically, according to Nomura Securities Co.”
- Lance Roberts on X: “While the Fed is quietly sitting on the hands as economic data slows and tariff inflation remains non-existent, other central banks are rapidly cutting rates with the Swiss restarting NIRP. The Fed is likely going to be too late once again adjusting monetary policy which is its history.”
- The 10-year yield continues to find decent supply back towards its 4.30/35% support, this area needs to hold if yields are to move higher. The range looks to be 4.30% - 4.60% for now a break either side would provide a clearer direction.
- Data/Events: S&P Global US PMI’s, Existing Home Sales
JGBS: Modestly Cheaper But Off Worst levels
JGB futures are cheaper, -17 compared to the settlement levels, but well above session lows.
- No. of condominium units supplied in Tokyo and surrounding areas fell 16.9% from a year earlier to units in May.
- “Japan's manufacturing activity expanded in June, crossing the 50 threshold, likely due to front-loading of output ahead of a scheduled increase in US tariffs next month.” (BBG)
- Cash US tsys are 1-2bps cheaper in today's Asia-Pac session as the markets digest the possible implications of a longer and more sustained US involvement in the Middle East conflict and how Iran might react to this, potentially blocking the Strait of Hormuz.
- Cash JGBs are flat to 2bps cheaper across benchmarks today, with the 20-year outperforming ahead of tomorrow’s supply. The benchmark 20-year yield is -0.4bps lower at 2.345%
- "Although 20-year bond issuance will be reduced by 1.8 trillion, the decline in yields from the peak in May suggests that it's already priced in. Meanwhile, Tokyo inflation is set to land on Friday after a hot Japan print last week." (per BBG)
- The swaps curve has bear-steepened, with rates 1-4bps higher. Swap spreads are mostly wider.
- Tomorrow, the local calendar will see Dept Sales data alongside 20-year supply.
AUSSIE BONDS: Cheaper With US Tsys, CPI On Wed
ACGBs (YM flat, XM -3.5) are weaker, reversing modest gains seen early in today’s session following US airstrikes on Iranian nuclear sites over the weekend.
- Cash US tsys are 1-2bps cheaper in today's Asia-Pac session.
- “As international investors pivot out of the U.S., another part of the world — and its bond market in particular — is gaining attention, according to Bank of America. The analysts pointed to Australia's bond market as a potential beneficiary of the dollar losing its safe-haven status.” (CNBC via BBG)
- Cash ACGBs are flat to 3bps cheaper with the AU-US 10-year yield differential -18bps.
- The bills strip has cheapened slightly, with pricing flat to -3.
- RBA-dated OIS pricing is modestly softer across meetings today. A 25bp rate cut in July is given an 84% probability, with a cumulative 74bps of easing priced by year-end.
- Tomorrow, the local calendar will be empty ahead of May CPI data on Wednesday. Consensus expects it to ease to 2.3% y/y from 2.4%. Trimmed mean ticked up to 2.8% y/y in April and has been around 2.7-2.8% since December, suggesting a stalling in disinflation. The next RBA meeting is July 7-8.
- The AOFM plans to sell A$1000mn of the 3.50% 21 December 2034 bond on Wednesday.
BONDS: NZGBS: Unhanged, Digest Greater US Involvement In Middle East Conflict
NZGBs closed little changed, reversing early modest gains following US airstrikes on Iranian nuclear sites over the weekend.
- Cash US tsys are 1-2bps cheaper in today's Asia-Pac session as the markets digest the possible implications of a longer and more sustained US involvement in the Middle East conflict and how Iran might react to this, potentially blocking the Strait of Hormuz. Today's US calendar: S&P Global US PMI's, Existing Home Sales.
- (Bloomberg) - "New Zealand's dollar is particularly vulnerable in the event of a haven rally in the US currency should the conflict between Iran and Israel pose constraints on oil supply, according to Bank of America Corp."
- Swap rates closed flat to 1bp lower.
- RBNZ dated OIS pricing closed flat to 4bps softer across meetings. 4bps of easing is priced for July, with a cumulative 28bps by November 2025.
- Tomorrow, the local calendar will be empty, ahead of trade balance data for May on Wednesday.
- On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$175mn of the 4.50% May-35 bond and NZ$50mn of the 1.75% May-41 bond.
FOREX: Asia FX Wrap - Reasons For A USD Correction Mount
The BBDXY has had a range of 1211.64 - 1215.21 in the Asia-Pac session, it is currently trading around 1214.80. The BBDXY has opened higher this morning, breaking through the 1213.00 area in reaction to the US bombing and the implications of potential extended US involvement in the conflict. The Market is caught short USD’s and the reasons for a retracement are beginning to mount. Brian Sullivan on X: ”It's not just the price of oil that's a concern, but also the cost of SHIPPING oil. Oil Brokerage Ltd. tells me that VLCC (very large crude carrier) ship rates near Persian Gulf could hit $100/k per day if disruption in Straight of Hormuz. For comparison, it was $24k/day just 10 days ago.”
- EUR/USD - Asian range 1.1456 - 1.1508, Asia is currently trading 1.1495. EUR has rejected the move above 1.1600 but dips should continue to find demand, first support back towards the 1.1400 area then 1.1100/1200. Price action does suggest we could test the support, the EUR has outperformed against both the AUD and NZD in Asia.
- GBP/USD - Asian range 1.3400 - 1.3442, Asia is currently dealing around 1.3415. The GBP continues to hold just above its support around 1.3400 after failing to break the Weekly 1.35/36 pivot. A sustained move back below 1.3400 and we could see a deeper correction unfold.
- USD/CNH - Asian range 7.1799 - 7.1921, the USD/CNY fix printed 7.1710. Asia is currently dealing around 7.1875. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
- Cross asset : SPX -0.25%, Gold $3360, US 10-Year 4.39%, BBDXY 1215, Crude oil $75.25
- Data/Events : Ger HCOB PMI's, FRA HCOB PMI's, EZ HCOB PMI's
Fig 1: GBP/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
JPY: Asia Wrap - USD/JPY Eyes Oil And Is Challenging A Market Long JPY
The Asia-Pac USD/JPY range has been 146.15 - 146.91, Asia is currently trading around 146.90, +0.55%. USD/JPY has broken through the 146.50 area this morning in reaction to the US bombing and the implications of potential extended US involvement in the conflict. The Market is caught long JPY and the implications of even higher oil prices as Iran contemplates blocking the Strait of Hormuz is challenging their conviction.
- “Pimco has been buying long-term JGBs to take advantage of a “dislocation” in the market, Andrew Balls told the FT, adding there’s a strong case for authorities to “issue more in the parts of the curve where the demand is.”(BBG)
- "HAYASHI: NOT TRUE US DEMANDED 3.5% GDP ON DEFENSE SPENDING" - BBG
- USD/JPY price action continues to point to a market that is positioned long JPY.
- "Asian currencies are likely to see further downside in the near-term, amid rising vulnerability to oil prices"(BBG).
- USD/JPY price action continues to point to a market that is positioned long JPY.
- Having broken above 146.50 this morning the market will be closely watching the oil price for short-term clues.
- The market is positioned for a move lower in USD/JPY and with this positioning at extremes we have seen the risk of pullbacks increase. A sustained break above 146.50/147.00 would begin to challenge the conviction of these shorts and focus will return to the 150.00/151.00 area.
- Options : Close significant option expiries for NY cut, based on DTCC data: 145.50($323m).Upcoming Close Strikes : 144.50($1.34b June 25)
- CFTC data shows Asset managers maintained their already extensive JPY longs, while leveraged funds have pared back their own longs that had just begun to be rebuilt.
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUD: Asia Wrap - Breaks Below 0.6450, Looking Towards 0.6350 Support
The AUD/USD has had a range of 0.6398 - 0.6449 in the Asia- Pac session, it is currently trading around 0.6405. The AUD has remained under pressure after gapping lower on the Asian open, -0.70%. The market is digesting the implications of a longer and more sustained US involvement in the conflict and how Iran might react to this, potentially blocking the Strait of Hormuz.
- AUSTRALIA DATA: Pickup In June Activity But Manufacturing Environment Difficult. The preliminary June S&P Global PMIs showed that services activity in Australia ended Q2 on a more positive note with the index up to 51.3 from 50.6. Manufacturing was stable at 51.0 as the global market becomes more challenging, which left the composite up to 51.2 from 50.5, the highest since March. The Q2 average composite PMI was 50.9 down slightly from Q1’s 51.1, signalling that growth was little changed and remained positive but lacklustre.
- "FITCH RATINGS: AUSTRALIAN MORTGAGE ARREARS SHOW SHARPER THAN EXPECTED RISE, AUSTRALIA MORTGAGE ARREARS RISE IN 1Q.”(BBG)
- The AUD/USD looks likely to have a look back towards its 0.6350/0.6400 support.
- Price remains in the wider 0.6350 - 0.6550 range for now. After failing to break higher, the focus will now turn to whether the support can hold, a close back below 0.6350 is needed to challenge the newly formed uptrend.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6510(AUD397m). Upcoming Close Strikes : 0.6500(AUD1.21b June 26), 0.6450(AUD553m June 26).
- CFTC Data shows Asset managers maintaining their shorts, the Leveraged community though have again added to their shorts.
- AUD/JPY - Today's range 93.85 - 94.38, it is trading currently around 94.00. Choppy price action as the pair establishes a range between 92.00 - 96.00. A break back below 91.50/92.00 is needed to see the move lower regain momentum and the focus turn back to the year's lows again. The move higher in oil and a market already very long JPY is preventing this pair moving lower in reaction to a souring risk backdrop for now.
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD: Asia Wrap - NZD/USD Fails Above 0.6000 As The USD Bounce Builds Momentum
The NZD/USD had a range of 0.5918 - 0.5966 in the Asia-Pac session, going into the London open trading around 0.5925,-0.70%. The NZD has remained under pressure after gapping lower on the Asian open. The market is digesting the implications of a longer and more sustained US involvement in the conflict and how Iran might react to this, potentially blocking the Strait of Hormuz.
- (Bloomberg) - “New Zealand’s dollar is particularly vulnerable in the event of a haven rally in the US currency should the conflict between Iran and Israel pose constraints on oil supply, according to Bank of America Corp.”
- “Among Group-of-10 commodity currencies, the Kiwi “is the only energy importer and most vulnerable if Middle East oil supply is impacted more severely,” wrote Bank of America.”
- The NZD could not get back above 0.6000 on Friday and this morning has seen another wave of selling as the market digests the weekend's news and the implications of what further US involvement might imply.
- Technically while the support around 0.5850 holds in NZD/USD it is still in an uptrend but should risk start to come under more significant pressure the market is likely to test this.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5830(NZD300m June 23). Upcoming Close Strikes : 0.5690(NZD621m June 25)
- CFTC Data showed Asset managers paring back their shorts slightly once more over the week, the leverage community did likewise.
- AUD/NZD range for the session has been 1.0797 - 1.0828, currently trading 1.0810. The cross is struggling to get any momentum back above 1.0800 for now, it needs to hold above here and start extending higher to put a higher low in place. The longer it fails to extend higher the more likely it begins to drift lower again, a break sub 1.0750 will see downward momentum return.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: Major Bourses Down on Rising Tensions
Many of the major regional bourses all fell today as the escalating situation in the Iran weighed heavy on investor appetite. Regional currencies fell against the USD and even bond markets were down as oil prices jumped and uncertainty grew.
- China has had a mixed day with the Hang Seng starting the week lower by -0.13% and the CSI 300 following suit, down -0.20%. Shanghai Comp bucked the trend and is up modestly be +0.15% and Shenzhen is up +0.21%.
- The TAIEX in Taiwan fell heavily today by -1.38% wiping out last week's gains.
- After a very strong week last week, the KOSPI couldn't avoid the regional weakness and is down -0.50%
- The FTSE Malay KLCI was one of the few outliers, clinging onto gains of +0.44%.
- The Jakarta Composite was under pressure falling -1.85%
- The FTE Straits Times in Singapore is down -0.41% whilst the PSEi in the Philippines is down -2.06% for its biggest fall since early April
- The NIFTY 50 is down -0.97% having closed Friday strongly with gains of +1.29%
OIL: Crude Trends Lower After Initial Spike, Already Contains Risk Premium
Oil prices spiked at the start of today’s trading after the US struck Iranian nuclear facilities. The market is nervous about how Iran will respond and is concerned by a further escalation in the conflict that could significantly impact oil infrastructure in the region. Since the initial reaction though, crude has trended lower as prices already contain a risk premium. WTI is at $74.70/bbl following a peak of $78.40 to be up 1.2% today and Brent is 1.4% higher at $78.07/bbl after rising to $81.40. The USD index is up 0.3%.
- Iranian TV reported that parliament voted to close the Strait of Hormuz but Bloomberg notes that would ultimately require Ayatollah Khamenei’s approval. Even a brief disruption could drive oil prices sharply higher.
- The Greek government warned its shipping to reassess the need to travel through Hormuz and suggested vessels wait for clarification, according to Bloomberg. The EU and Joint Maritime Information Center have increased the risk level of an attack in the region.
- Around 30% of seaborne crude travels through the Strait and shipping rates have risen and some firms are not taking new bookings. Two tankers had to reverse course and head south again as they entered Hormuz as the US attacked Iran.
- Goldman Sachs believes that if seaborne traffic through Hormuz were cut in half then Brent could reach $110/bbl, reported by Bloomberg.
- Later the Fed’s Waller, Bowman, Goolsbee, Williams and Kugler as well ECB President Lagarde speak. US and European preliminary S&P Global/HCOB June PMIs are released.
GOLD: Prospect Of On Hold Policy Sees Gold Fall Despite Geopolitical Risks
Gold prices jumped to $3395.07 at the start of today’s APAC trading, the highest since mid-June, on flight-to-quality following US action in Iran. However, the prospect that the conflict will lead to higher inflation through energy prices thus delaying central bank easing is weighing on non-interest bearing gold with it now down 0.3% to $3357.9 after a low of $3352.1. The stronger US dollar (USD BBDXY +0.3%) and slightly higher US yields are also pressuring bullion.
- Gold continues to trade between initial support at $3338.8 and resistance at $3451.3.
- With positions in gold so long (well above 2016 and 2020 levels), silver and palladium have become safe-have substitutes. Silver is up 0.1% to $36.05 today following a high of $36.20 and a low of $35.84, holding above initial support at $35.43. A bull wave persists with initial resistance at $37.32, 18 June high.
- Middle Eastern developments have driven a pullback in risk with the S&P e-mini down 0.3%, KOSPI -0.5% and Hang Seng -0.1%. Oil prices are higher with WTI +1.7% to $75.09/bbl. Copper is down 0.3%.
- Later the Fed’s Waller, Bowman, Goolsbee, Williams and Kugler as well ECB President Lagarde speak. US and European preliminary S&P Global/HCOB June PMIs are released.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 23/06/2025 | 0700/0300 |  US | Fed Governor Christopher Waller | |
| 23/06/2025 | 0715/0915 | ** |  FR | S&P Global Services PMI (p) |
| 23/06/2025 | 0715/0915 | ** | FR | S&P Global Manufacturing PMI (p) |
| 23/06/2025 | 0730/0930 | ** |  DE | S&P Global Services PMI (p) |
| 23/06/2025 | 0730/0930 | ** | DE | S&P Global Manufacturing PMI (p) |
| 23/06/2025 | 0800/1000 | ** |  EU | S&P Global Services PMI (p) |
| 23/06/2025 | 0800/1000 | ** | EU | S&P Global Manufacturing PMI (p) |
| 23/06/2025 | 0800/1000 | ** | EU | S&P Global Composite PMI (p) |
| 23/06/2025 | 0830/0930 | *** |  GB | S&P Global Manufacturing PMI flash |
| 23/06/2025 | 0830/0930 | *** | GB | S&P Global Services PMI flash |
| 23/06/2025 | 0830/0930 | *** | GB | S&P Global Composite PMI flash |
| 23/06/2025 | - | GB | BOE Bailey At Insurance Chairs Dinner | |
| 23/06/2025 | 1300/1500 | EU | ECB Lagarde At ECON Hearing | |
| 23/06/2025 | 1345/0945 | *** | US | S&P Global Manufacturing Index (Flash) |
| 23/06/2025 | 1345/0945 | *** | US | S&P Global Services Index (flash) |
| 23/06/2025 | 1400/1000 | *** | US | NAR existing home sales |
| 23/06/2025 | 1400/1000 | US | Fed Vice Chair Michelle Bowman | |
| 23/06/2025 | 1530/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 23/06/2025 | 1530/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 23/06/2025 | 1720/1320 | US | Chicago Fed's Austan Goolsbee | |
| 23/06/2025 | 1830/1430 | US | Fed Governor Adriana Kugler | |
| 24/06/2025 | 0800/1000 | *** | DE | IFO Business Climate Index |
| 24/06/2025 | 0800/0900 | GB | BOE Bailey At Gold Standard Conference | |
| 24/06/2025 | 0845/1045 | DE | 2025 Budget Press Conference | |
| 24/06/2025 | 0900/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 24/06/2025 | 0900/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 24/06/2025 | 0930/1030 | GB | BOE Green On CB Balance Sheet Mgmt | |
| 24/06/2025 | 1000/1100 | ** | GB | CBI Industrial Trends |
| 24/06/2025 | 1115/1315 | EU | ECB de Guindos At XLII APIE seminar | |
| 24/06/2025 | 1230/0830 | *** |  CA | CPI |
| 24/06/2025 | 1230/0830 | * | US | Current Account Balance |
| 24/06/2025 | 1230/0830 | ** | US | Philadelphia Fed Nonmanufacturing Index |
| 24/06/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 24/06/2025 | 1300/1500 | ** |  BE | BNB Business Confidence |
| 24/06/2025 | 1300/0900 | ** | US | S&P Case-Shiller Home Price Index |
| 24/06/2025 | 1300/0900 | ** | US | FHFA Home Price Index |
| 24/06/2025 | 1300/0900 | ** | US | FHFA Home Price Index |
| 24/06/2025 | 1300/1500 | EU | ECB Lagarde Accepts De Sanctis Award "Europa" | |
| 24/06/2025 | 1315/0915 | US | Cleveland Fed's Beth Hammack | |
| 24/06/2025 | 1335/1435 | GB | BOE Ramsden At Barclays-CEPR MonPol Forum | |
| 24/06/2025 | 1355/1555 | EU | ECB Lane Keynote At Barclays-CEPR MonPol Forum |
