MNI EUROPEAN OPEN: Powell Sees USD Remain Reserve CCY
EXECUTIVE SUMMARY
- POWELL SEES USD REMAINING RESERVE CURRENCY - MNI
- FED WELL POSITIONED TO WAIT ON A RATE MOVE - MNI
- THE EU PLANNING RETALIATORY TARIFFS ON US - BBG
- BOJ'S TAMURA MAKES HAWKISH COMMENTS - MNI
- AUSTRALIA CPI FALLS BELOW EXPECTATIONS - MNI
Fig 1: Australian CPI Below Expectations.
Source: MNI - Market News/Bloomberg/Refinitiv.
MIDDLE EAST
IRAN (BBG): “The International Atomic Energy Agency is urging fresh inspections of the sites, with its chief saying that the country's atomic program "has been set back significantly" but it's hard to specify whether that means months or years.”
US/IRAN (BBC): “The Islamic Republic's stockpile of enriched uranium was not eliminated in Saturday's bombings, sources familiar with the Defense Intelligence Agency evaluation told the BBC's US partner CBS. The White House said the "flat-out wrong" assessment was leaked by "a low-level loser in the intelligence community".”
UK
DEFENCE (BBC): “A British aircraft carrier has docked in Singapore on a rare Pacific deployment which will see it call on Australia, Japan, Korea and take part in several multinational exercises.”
DEFENCE (BBC): “The UK government is to purchase 12 new fighter jets which can be equipped with nuclear bombs, and join Nato's airborne nuclear mission. The decision will be announced by the prime minister at the Nato summit taking place this week in the Netherlands.”
EU
TARIFFS (BBG): “The European Union plans to impose retaliatory tariffs on US imports, including on Boeing Co. aircraft, if President Donald Trump puts a baseline levy on the bloc’s goods as many expect. EU officials expect the US to keep some duties in place, even after trade negotiations are concluded. Until now, the European Commission, which handles trade matters for the EU, hasn’t indicated if that would trigger retaliation from the bloc.”
EU (POLITICO): “On Wednesday, EU competition chief Teresa Ribera will unveil a new rulebook on state subsidies for clean energy, laying out exactly how national governments can channel public money into companies to help them decarbonize.”
EU (POLITICO): “The Socialists are not just rebelling against European Commission President Ursula von der Leyen's attempts to water down the EU's green agenda — they are also out to stop her cutting budget funds for training young people and the unemployed.”
FINANCE (POLITICO): “In his invitation to national government heads, European Council President António Costa said Thursday’s meeting would be “a good opportunity to consider how to further strengthen the international role of the euro” — code for the long-term goal of making the euro a global reserve currency to rival the dollar.”
POLITICS (POLITICO): “European Commission President Ursula von der Leyen never pushed to withdraw an anti-greenwashing bill and still supports it, according to a Commission official familiar with von der Leyen’s stance. “The president’s support for the Green Claims has not changed,” the official told POLITICO on Tuesday.”
UKRAINE (POLITICO): “Ukrainian President Volodymyr Zelenskyy is forcefully pushing Kyiv’s NATO bid as he gears up for a high-stakes meeting with Donald Trump in The Hague on Wednesday.”
US
FED (MNI BRIEF): Fed Well Positioned To Wait On Rate Move - Barr. Federal Reserve Governor Michael Barr said Tuesday the Fed can wait to see how tariffs affect the economy before adjusting interest rates. His comments largely echoed those of Fed Chair Jerome Powell in Congressional testimony earlier in the day.
FED (MNI BRIEF): Williams Backs 'Modestly Restrictive' Fed Stance. The Federal Reserve has time to assess the effects of tariff policies and other changes on the economy while keeping interest rates at current levels, New York Fed President John Williams said Tuesday.
FED (MNI BRIEF) : Powell Sees USD Remaining Global Reserve Currency. Federal Reserve Chair Jerome Powell said Tuesday the U.S. dollar will remain the world's reserve currency and Treasury markets are functioning well. Asked about speculation that foreign investors were dumping Treasuries during market turmoil in April and comments that Treasuries are losing their safe-haven status, Powell said: "We need to be careful about these narratives that pop up quickly. We're the world's reserve currency and the world's greatest democracy and the dollar is always going to be for a long time the reserve currency and the place where people want to be."
FED (BBG): "Federal Reserve Bank of Kansas City President Jeff Schmid suggests the US central bank should wait to see how tariffs and other policies impact the economy before adjusting interest rates. Schmid believes the current "wait-and-see" monetary policy posture is appropriate, given the economy's resilience."
OIL (BBG): “President Donald Trump announced on social media that China can continue to purchase oil from Iran, potentially undermining years of US sanctions on Iran.”
POLITICS (BBG): “Andrew Cuomo conceded to Zohran Mamdani in the Democratic primary for New York City mayor, with Mamdani leading in preliminary results with 43.5% of the vote.”
ENERGY (BBG): “New York's grid operator briefly issued a rare energy warning due to a heat wave, but power supplies are now stable.”
OTHER
JAPAN DATA (MNI BRIEF): Japan May Services PPI Rises 3.3% Vs. Apr 3.4%. Japan’s Services Producer Price Index (SPPI) rose 3.3% y/y in May, slightly easing from a revised 3.4% in April, indicating that firms are continuing to pass on higher costs, preliminary Bank of Japan data showed Wednesday.
JAPAN BOJ (MNI) : BOJ Opinions: Steady JGB Cut; Decisive Policy Change. A few Bank of Japan board members supported steadily reducing the Bank’s JGB holdings, though concerns over moving too quickly were also raised, according to the summary of opinions from the June 16-17 policy meeting released Wednesday.
JAPAN BOJ (MNI): “Bank of Japan board member Naoki Tamura signaled a more hawkish stance on Wednesday, suggesting the Bank’s 2% inflation target could be achieved earlier than expected and calling for a steady normalisation of monetary policy and the BOJ’s balance sheet.”
JAPAN (BBG): “Japan's ruling party's policy chief, Itsunori Onodera, emphasizes that the country should focus on enhancing its defense capabilities rather than just increasing military spending.”
AUSTRALIA (MNI BRIEF) : Aussie Monthly CPI Falls 20bp Below Expectations. Australia’s monthly Consumer Price Index (CPI) indicator rose 2.1% y/y in May, 20 basis points below expectations, while the annual trimmed mean measure fell 40bp to 2.4%, data from the Australian Bureau of Statistics showed Wednesday.
SOUTH KOREA (BBG): “MSCI Inc. kept South Korea in the emerging-market category, citing limited foreign exchange reforms and restricted availability of investment instruments.”
INDONESIA (BBG): “Indonesia’s finance minister expects the budget deficit this year to come in at 2.5% of gross domestic product, as initially projected and well below the 3% ceiling mandated by law.”
INDONESIA (BBG): “Indonesia has reduced its spending plans for a free meals program targeting 83 million people, with forecasted spending of 350 trillion rupiah next year, a 22% drop from earlier plans.”
CHINA
MNI China Press Digest June 25: Real-estate, MOFCOM, GDP
CONSUMPTION POLICY (CHINA DAILY) : “The People's Bank of China and five other departments released guidelines aimed at strengthening financial support for consumption on Tuesday, taking a pragmatic, coordinated step toward expanding consumption in a sustainable way.”
CONSUMPTION (BBG): “Premier Li Qiang expressed confidence that China can turn consumption into a driver for the economy, making it a "mega-sized consumer powerhouse" that will bring vast markets to enterprises from all countries.”
GEOPOLITICS (BBG): “President Xi Jinping will not attend the BRICS leaders meeting in Rio de Janeiro, marking the first time he has skipped the summit since taking power.”
GLOBAL TRADE (CHINA DAILY) : “ Premier Li Qiang called on Tuesday for resolute efforts to defend free trade and true multilateralism and uphold the stability of global industrial and supply chains, reiterating China's commitment to working with various countries in the joint pursuit of modernization through pragmatic and mutually beneficial cooperation.”
ECONOMY (SECURITIES TIMES): “China’s economic growth rate is expected to remain above 5% in the second half of the year, said Huang Yiping, dean at the National School of Development at Peking University.”
PROPERTY (YICAI): “Frontline staff at real-estate agents in certain cities are hiring actors to pose as prospective high-value homebuyers, according to the Yicai news agency.”
AUTOS (SHANGHAI SECURITIES): “The Ministry of Commerce will promote new energy car sales in rural areas from July to December, offering subsidies up to CNY20,000 for each buyer who replaces a qualified used car with an electric vehicle, Shanghai Securities News reported.”
INDUSTRY (BBG): “Chinese copper smelters, including Jiangxi Copper Co. and Tongling Nonferrous Metals Group Co., are planning to export at least 30,000 tons of copper to LME warehouses in Asia to cover their positions on the London Metal Exchange.”
HONG KONG (CHINA DAILY) : “The milestone Payment Connect program launched in China on Sunday offers a more convenient and cost-effective solution for cross-boundary transactions, said experts and residents, who highlighted its significance in boosting connections, promoting the internationalization of the renminbi and reinforcing Hong Kong's position as a financial hub.”
MNI: PBOC Net Injects CNY209 Bln via OMO Wednesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY365.3 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY209 billion after offsetting the maturity of CNY156.3 reverse repo today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5746% at 09:36 am local time from the close of 1.6684% on Tuesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 47 on Tuesday, compared with the close of 51 on Monday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Higher At 7.1668 Weds; +1.26% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.1668 on Wednesday, compared with 7.1756 set on Tuesday. The fixing was estimated at 7.1745 by Bloomberg survey today.
MARKET DATA
NZ EXPORTS NZD MAY 7.68bn, PRIOR 7.70bn REVISED
NZ IMPORTS NZD MAY 6.44b, PRIOR 6.421bn REVISED
NZ TRADE BALANCE NZD MAY $1,235m, PRIOR 1,285m REVISED
NZ TRADE BALANCE 12mth YTD NZD -$3,790m, PRIOR -$4,965m REVISED
AUSTRALIA CPI Y/Y MAY 2.1%, EST 2.3%, PRIOR 2.4%
AUSTRALIA CPI TRIMMED MEAN Y/Y MAY 2.4%, PRIOR 2.8%
JAPAN MAY SERVICES PRODUCER PRICES +3.3% Y/Y; EST. +3.1%; APR. 3.4%
JAPAN FINAL APRIL LEADING INDEX 104.2; MAR. 107.6
JAPAN FINAL APRIL COINCIDENT INDEX 116.0; MAR. 115.8
SOUTH KOREA RETAIL SALES MAY 7.0% Y/Y, PRIOR 7.0%
SOUTH KOREA DEPARTMENT STORE SALES Y/Y MAY 2.3%, PRIOR -2.9%
SOUTH KOREA DISCOUNT STORE SALES Y/Y MAY 0.2%, PRIOR -3.1%
MARKETS
US TSYS: Asia Wrap - Front End Yield Extends Lower
The TYU5 range has been 111-17+ to 111.22 during the Asia-Pacific session. It last changed hands at 110-19+, down 0-01+ from the previous close.
- The US 2-year yield has moved lower trading around 3.79%, down 0.03 from its close.
- The US 10-year yield is relatively unchanged around 4.30%.
- This has seen the yield curve steepen: 2s10s +3.61 at 50.143
- (Bloomberg) - US bond investors are too complacent about inflation and the Fed’s fears it will reaccelerate. Expectations for the decline in yields to accelerate look optimistic given that President Trump’s tax-and-spending bill may boost supply. Inflation is also likely to accelerate ahead of the next Fed meeting. Both this week’s core PCE print for May and the June Core CPI data due in the middle of next month are forecast to show higher readings.
- FED - FOMC sitting member Schmid, Kansas Fed, affirmed Chair Powell’s comments to the Senate that it is best to watch and wait to assess the impact of tariffs and policy on the economy given its resilience, especially the labour market, rather than rushing to ease monetary policy.
- The 10-year yield was again seriously testing the 4.30% support overnight, a sustained move back below here is likely to see the move pick up momentum. 10-year yields would need to get back above 4.45/4.50% again to alleviate this downward pressure.
Data/Events: MBA Mortgage Applications, Building Permits, New Home Sales
Fig 1: US 10-Year Yield Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
JGBS: Holding Gains Despite Hawkish BoJ Speak, Tokyo CPI On Friday
JGB futures are stronger, +14 compared to settlement levels, hovering just below session bests.
- A few Bank of Japan board members supported steadily reducing the Bank’s JGB holdings, though concerns over moving too quickly were also raised, according to the summary of opinions from the June 16-17 policy meeting released Wednesday.
- One member noted that excess reserves remained abundant, making it appropriate for the Bank to “proceed steadily with the reduction of its purchase amount of JGBs, and thereby normalise its balance sheet.”
- BoJ board member Naoki Tamura signalled a more hawkish stance, suggesting the Bank’s 2% inflation target could be achieved earlier than expected and calling for a steady normalisation of monetary policy and the BoJ’s balance sheet. Tamura said he does not view the 0.5% policy rate as a ceiling, citing both rising inflation and changes in bank lending rates compared to the previous rate-hike cycle.
- Cash US tsys are modestly mixed in today's Asia-Pac session.
- Cash JGBs are 1-3bps richer across benchmarks, with the 20-year leading.
- Swap rates are 1-3bps lower. Swap spreads are mixed.
- Tomorrow, the local calendar will see Weekly International Investment Flow data alongside 2-year supply. Tokyo CPI is due on Friday.
AUSSIE BONDS: Moderately Richer, July Rate Cut At 95% After CPI Data
ACGBs (YM +2.0 & XM +2.5) are trading modestly stronger.
- May headline CPI inflation was flat on the month, driving a 0.3pp moderation in the annual rate to 2.1% driven by a broad-based easing across major components. The trimmed mean moderated to 2.4% y/y from 2.8%, the lowest since November 2021. However, CPI ex volatile items and holiday travel was only down 0.1pp to 2.7% y/y. The RBA decision is on July 8 and this data is likely to increase expectations of another rate cut but the Board prefers the quarterly CPI (due July 30) and updated staff forecasts are not provided until August.
- Cash US tsys are modestly mixed in today's Asia-Pac session after yesterday's modest gains.
- Cash ACGBs are 2bps richer with the AU-US 10-year yield differential at -16bps. At -16bps, the differential is positioned in the bottom half of the +/- 30bps range that has held since November 2022.
- The bills strip has bull-steepened, with pricing +1 to +7.
- RBA-dated OIS pricing is softer across meetings after today’s data. A 25bp rate cut in July is given a 95% probability (84% pre-data), with a cumulative 83bps of easing (78bps pre-data) priced by year-end.
- Tomorrow, the local calendar will see Job Vacancies data.
BONDS: NZGBS: Closed On A Strong Note, Tracking US Tsys & ACGBs
NZGBs closed on a strong note, with benchmark yields 4-5bps lower. NZ-US and NZ-AU 10-year yield differentials were little changed.
- Cash US tsys are modestly mixed in today's Asia-Pac session after yesterday's modest gains. Yesterday, FOMC sitting member Schmid, Kansas Fed, affirmed Chair Powell's comments to the Senate that it is best to watch and wait to assess the impact of tariffs and policy on the economy, given its resilience, especially the labour market, rather than rushing to ease monetary policy. Today’s US calendar: MBA Mortgage Applications, Building Permits, New Home Sales.
- (Reuters) -New Zealand on Wednesday released a draft 30-year national infrastructure plan, which highlighted a need for the country to invest more in hospitals and electricity production and to prepare to spend more on responding to national disasters.
- Swap rates also closed 4-5bps lower, with the 2s10s curve steeper.
- RBNZ dated OIS pricing closed flat to 6bps softer across meetings. 4bps of easing is priced for July, with a cumulative 33bps by November 2025.
- Tomorrow, the local calendar will be empty apart from the NZ Treasury's planned sale of 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 - BBDXY Finds Some Demand Towards 1200, For Now
The BBDXY has had a range of 1200.25 - 1202.09 in the Asia-Pac session, it is currently trading around 1202. The BBDXY has found some demand back towards the 1200 area in a very quiet Asian session, +0.04%%. The BBDXY extended its move lower again overnight, the price action was very revealing and points to a market that is very quick to reinstate USD shorts with conviction pretty high for a move lower. “The BOE’s Andrew Bailey and Dave Ramsden warned that the labor market is cooling and pay pressures are easing in one of the strongest signs yet that the central bank is on course to cut rates again this summer”(BBG).”Goldman said the dollar will extend its worst start to a year as foreign investors boost FX hedges.”(BBG)
- EUR/USD - Asian range 1.1605 - 1.1631, Asia is currently trading 1.1615. The EUR remains well supported on dips, potential USD demand today with corporate month-end. While the USD remains on the back foot the EUR will continue to be supported first support back towards 1.1500.
- GBP/USD - Asian range 1.3611 - 1.3629, Asia is currently dealing around 1.3615. The GBP again found solid demand around its 1.3400 support and has made new highs above 1.3600 looking for the momentum to carry it through its weekly pivot.
- USD/CNH - Asian range 7.1604 - 7.1711, the USD/CNY fix printed 7.1668. Asia is currently dealing around 7.1680. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
- Cross asset : SPX -0.01%, Gold $3327, US 10-Year 4.297%, BBDXY 1202, Crude oil $65.20
- Data/Events : Spain GDP & PPI, France Consumer Confidence
Fig 1: GBP/USD Spot Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
JPY: Asia Wrap - USD/JPY Finds Support Back Towards 144.50 As Oil Stabilises
The Asia-Pac USD/JPY range has been 144.61 - 145.04, Asia is currently trading around 144.90. USD/JPY found some demand back towards the 144.50 area when market tested lower on Hawkish comments from BOJ board member Naoki Tamura. The capitulation in oil also seems to have seen its momentum stall for now. The price action suggests any bounces will be met with sellers, corporate month-end USD demand might give them that opportunity.
- (Bloomberg) - “BoJ board member Naoki Tamura signaled a more hawkish stance on Wednesday, suggesting the Bank's 2% inflation target could be achieved earlier than expected and calling for a steady normalisation of monetary policy and the BoJ's balance sheet.”
- “A few Bank of Japan board members supported steadily reducing the Bank's JGB holdings, though concerns over moving too quickly were also raised, according to the summary of opinions from the June 16-17 policy meeting released Wednesday.”(BBG)
- An ugly daily shadow points to a potential top being in place now and highlights how quick the market is to return to selling USD’s, we are testing the support this morning around 144.50 where some demand was seen overnight.
- Price now back in its wider 142.00 - 148.00 range, I am not sure that the brief spike higher would have seen positioning altered too much so the long JPY trade remains alive and well.
- Options : Close significant option expiries for NY cut, based on DTCC data: 144.50($1.88b).Upcoming Close Strikes : 142.00($1.32b June 26), 143.00($1.41b June 26)
Fig 1 : USD/JPY Spot Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUD: Asia Wrap - CPI Print Finds Bids Sub 0.6500
The AUD/USD has had a range of 0.6489 - 0.6508 in the Asia- Pac session, it is currently trading around 0.6500, +0.15%. The AUD attempted to move lower on the CPI print but found bids sub 0.6500 and clawed back all its losses. A quiet session sees AUD/USD continue to trade with an underlying bid tone. We are approaching the corporate month-end and this normally results in a demand for USD's so perhaps better levels could be seen for AUD buyers.
- AUSTRALIA DATA: Trimmed Mean Inflation Lowest Since 2021 Raising Cut Hopes. May headline CPI inflation was flat on the month, seasonally adjusted, driving a 0.3pp moderation in the annual rate to 2.1% driven by a broad-based easing across major components. The trimmed mean moderated to 2.4% y/y from 2.8%, the lowest since November 2021. The RBA decision is on July 8 and this data is likely to increase expectations of another rate cut but the Board prefers the quarterly CPI (due July 30) and updated staff forecasts are not provided until August.
- The AUD/USD bounced hard off its support and is now back to potentially testing the top end of its range as the USD comes back under pressure.
- We are approaching the corporate month-end and this normally results in a demand for USD’s so perhaps better levels could be seen over the course of the next day or so for those wanting to express a long AUD position.
- Price remains in the wider 0.6350 - 0.6550 range for now. The AUD needs a sustained break above 0.6550 to potentially start building towards a move higher.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.6500(AUD2.11b June 26), 0.6425(AUD776m June 30).
- AUD/JPY - Today's range 93.98 - 94.28, it is trading currently around 94.20. Choppy price action as the pair establishes a range between 92.00 - 96.00. Should risk build on this move, focus could turn back to the 96.00 area.
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD: Asia Wrap - NZD/USD Builds On Momentum Above 0.6000
The NZD/USD had a range of 0.6004 - 0.6040 in the Asia-Pac session, going into the London open trading around 0.6030, +040%. The NZD has drifted higher all through the Asian session, taking us back to the overnight highs. We are approaching the corporate month-end and this normally results in a demand for USD's this could provide some very short-term headwinds.
- NZ's trade surplus narrowed to NZ$1.235b in May from a revised +NZ$1.285b in April. 12 months ytd trade deficit narrowed to NZ$3.790b from a revised -NZ$4.965b in April.
- “Goldman said the dollar will extend its worst start to a year as foreign investors boost FX hedges.”(BBG)
- A huge bounce from sub 0.5900 and the NZD is now trying to establish a foothold above 0.6000, corporate month- end could provide some headwinds but for now dips look likely to be well supported.
- Technically while the support around 0.5850 holds in NZD/USD it is still in an uptrend. This area held perfectly and should risk continue to move higher then the focus will turn once again back to the 0.6050/0.6100 area.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.6040(NZD373m June 26)
- AUD/NZD range for the session has been 1.0770 - 1.0809, currently trading 1.0780. The cross seems to have failed in its attempt to push higher above 1.0800, a sustained break back below sub 1.0750 would see the downtrend reengaged.
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: Most Major Bourses Post Decent Gains
Following on from yesterday's positive day, most major bourses moved higher today led by Taiwan. In Hong Kong EV stocks got a boost from news that the Ministry of Commerce will require local governments to implement trade in policies with subsidies for EVs. In Korea a strong rally from Korea Electric Power on Middle East truce wasn't enough to keep the KOSPI from dipping marginally.
- In China the Hang Seng lead the way rising +0.77% whilst the CSI 300 was up half of that at +0.35%. The Shanghai Composite is up +0.28% and +1.2% in the last five days of trading whilst the Shenzhen Comp rose +0.51%
- In Taiwan the TAIEX was one of the strongest of the major markets rising +0.95%.
- The KOSPI was one of the fallers today down -0.16% in what appeared to be little more than profit taking with limited news and the index being up over 4% in the last week.
- The FTSE Malay KLCI rose +0.42% and the Jakarta Composite went the other way falling -0.50%.
- In Singapore the FTSE Straits Times is up +0.47% and the PSEi in the Philippines is up +0.47%
- The NIFTY 50 has had a strong start to the day rising +0.60% following on from yesterday's modest gains of +0.29%
OIL: Crude Higher After US Inventories Fall, Also Monitoring Truce
After falling around 12% over the first two days of the week on a de-escalation of Middle East tensions, oil prices are over a percent higher today. They have stabilised as markets generally monitor the Iran-Israel ceasefire which so far today has held. A reported US crude inventory drawdown has also helped. WTI is up 1.4% to $65.24 after a low of $65.00, while Brent is 1.1% higher at $67.89/bbl, just off the intraday high OF $68.16. The USD index is slightly higher.
- With the abatement of concerns that Middle Eastern oil supplies would be impacted by conflict, fundamentals are back in focus. Bloomberg reported that US crude inventories fell 4.28mn barrels last week after declining over 10mn the previous week, according to people familiar with the API data. The official EIA data is out Wednesday. It reported a 11.5mn drop the previous week.
- Also on the supply front, there are tentative indications that restrictions on Iran could eventually be eased following the ceasefire agreement. Unexpectedly, President Trump openly allowed Iran to continue selling oil to China.
- OPEC also meets virtually on July 6 to decide August’s production target. Another +400kbd increase is likely as the group normalises output after reducing it, targets market share and punishes overproducing members.
- On the demand side, the progress of trade negotiations ahead of the July 9 deadline will also be monitored closely. Increased US trade protectionism rattled crude as it feared energy demand would sink.
- Later Fed Chair Powell continues his testimonies. The Fed’s Goolsbee, ECB’s Donnery and BoE’s Lombardelli speak. US May new home sales/permits print.
GOLD: Bullion Stabilizes After Middle East Truce Drives Stronger Risk Appetite
After falling 1.3% on Tuesday, gold rose to a high of $3335.24/oz today as markets stabilised following an easing in tensions in the Middle East which reduced safe-haven flows. They are now monitoring how well Israel and Iran are sticking to the ceasefire. It has been quiet on this front so far today. Bullion has come off its intraday high to be up 0.1% to $3327.2. The USD and US yields are slightly higher from early in the session.
- Gold’s bullish theme is intact and this week’s decline is seen as corrective. Moving average studies are also still in a bull mode signalling a dominant uptrend. The yellow metal will monitor US data closely for signs of negative economic impacts from import duties and any change in the Fed’s “on hold” tone. Initial resistance is at $3451.3, 16 June high, while support is at $3286.2, 50-day EMA.
- Silver has range traded reaching a high of $35.99 and then a low of $35.90. It is currently moderately higher at $35.93. Initial support is at $35.55 and resistance at $37.32. Any sell off is still seen as corrective.
- Equities are mixed with the S&P e-mini flat, Topix down 0.2% but Hang Seng up 0.8%. Oil prices are higher with WTI +1.4% to $65.28/bbl. Copper is 0.4% higher.
- Later Fed Chair Powell continues his testimonies. The Fed’s Goolsbee, ECB’s Donnery and BoE’s Lombardelli speak. US May new home sales/permits print.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 25/06/2025 | 0600/1400 | ** |  CN | MNI China Money Market Index (MMI) |
| 25/06/2025 | 0645/0845 | ** |  FR | Consumer Sentiment |
| 25/06/2025 | 0700/0900 | ** |  ES | PPI |
| 25/06/2025 | 0700/0900 | *** | ES | GDP (f) |
| 25/06/2025 | 0845/0945 |  GB | BOE Lombardelli At BOE MonPol Conference | |
| 25/06/2025 | 0900/1000 | ** | GB | Gilt Outright Auction Result |
| 25/06/2025 | 0900/1000 | ** | GB | Gilt Outright Auction Result |
| 25/06/2025 | 0900/1000 | GB | BOE Pill On Panel At BOE MonPol Conference | |
| 25/06/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 25/06/2025 | 1230/1330 | GB | BOE Lombardelli Chairs Riksbank's Breman Speech At BOE MonPol Conf | |
| 25/06/2025 | 1400/1000 | *** | US | New Home Sales |
| 25/06/2025 | 1400/1000 | *** | US | New Home Sales |
| 25/06/2025 | 1400/1000 | US | Fed Chair Jay Powell | |
| 25/06/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 25/06/2025 | 1530/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 25/06/2025 | 1700/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 25/06/2025 | 1800/1400 | US | Federal Reserve Board Meeting | |
| 26/06/2025 | 0600/0800 | * |  DE | GFK Consumer Climate |
| 26/06/2025 | 0700/0900 | ** |  SE | Economic Tendency Indicator |
| 26/06/2025 | 0830/0930 | GB | BOE Breeden On UK Competetiveness Panel | |
| 26/06/2025 | 0945/1145 |  EU | ECB De Guindos At Deutsch Bank Forum 2025 | |
| 26/06/2025 | 0945/1045 | GB | BOE Greene Chairs Panel On MonPol Communication | |
| 26/06/2025 | 1000/1100 | ** | GB | CBI Distributive Trades |
| 26/06/2025 | 1100/1300 | EU | ECB Schnabel At 'Wirtschaftsrat der CDU' Finanzmarktklausur | |
| 26/06/2025 | 1100/1200 | GB | BOE Bailey Keynote Speech At BCC Conference | |
| 26/06/2025 | 1230/0830 | *** | US | Jobless Claims |
| 26/06/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 26/06/2025 | 1230/0830 | * |  CA | Payroll employment |
| 26/06/2025 | 1230/0830 | ** | US | Durable Goods New Orders |
| 26/06/2025 | 1230/0830 | *** | US | GDP |
| 26/06/2025 | 1230/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 26/06/2025 | 1230/0830 | ** | US | Durable Goods New Orders |
| 26/06/2025 | 1245/0845 | US | Richmond Fed's Tom Barkin | |
| 26/06/2025 | 1300/0900 | US | Cleveland Fed's Beth Hammack |
