IRAN: Reports Iran Accepts Part Uranium Transfer To Third Party Country

• Earlier dollar losses extend as we approach the NY crossover after a report that a US-Iran agreement might be looming. Amid firmer risk sentiment and higher precious metals prices, this lead the DXY to dip below the 98.00 handle, putting the focus on the pre-war close of 97.56 seen on February 27. Should a deal indeed be struck, the index looks likely to move below that level which would reignite prior discussions around USD weakness.
• USDJPY saw a renewed sudden spell of weakness earlier this morning, falling around 270 pips to a session low of 155.04 (lowest level since mid-February) in what will prompt another round of intervention speculation. However, spot has recovered almost half way since, making this the fourth failed attempt below the 156.00 handle since April 30 after analysts had been sceptical if the MoF's attempts for a stronger yen will be long-lasting. This comes as positioning was not stretched ahead of the drop from 160.72 cycle highs and underlying yen-negative fundamentals remain in place, keeping intact trendline support at 155.01. Initial firm resistance to watch is 158.32, the 50-day EMA.
• Firmer risk sentiment also underpins the likes of AUD and NZD. NZDUSD (+1.3%) breaks above the cluster of highs around 0.5925 seen throughout April after data showed the New Zealand labour market to have continued its modest recovery in Q1. Should upside persist, focus would turn onto the 0.6000 handle which closely coincides with a Fibonacci retracement. AUDUSD has meanwhile traded to a fresh cycle high today, confirming a resumption of the uptrend. Sights are on 0.7262 next, a Fibonacci projection.
• MBA Mortgage Applications, monthly ADP employment, and the full US Treasury quarterly refunding announcement are on the calendar while Fed's Musalem, Goolsbee as well as BoC's Macklem and Rogers are scheduled in terms of speakers.

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EXECUTIVE SUMMARY: 

• The Riksbank is expected to hold the policy rate at 1.75% on Thursday, while reiterating a patient but vigilant stance with respect to upside inflation risks. We think the Board will have enough confidence to note that the rate is expected to “remain at this level for some time to come”, with the June decision (where an updated rate path forecast and MPR will be presented) a more appropriate time to consider any revisions.
• Domestic economic developments since the March decision have reinforced our view that, absent the Iran war, the Riksbank may have needed to cut rates in H1 2026. In the current environment, that suggests that the bar to hiking is higher for the Riksbank than the ECB.
• That doesn’t mean a small adjustment later this year can be ruled out, though. We think the March MPR commentary was fairly explicit that if the Board gains confidence that the stagflationary scenario could be playing out, it won’t hesitate to raise rates.
• A no-hike “option” is also still in play if a durable Iran war ceasefire deal is reached and the Strait of Hormuz is reopened in the near future.

SFRU6/H7 paper paid 9.0 on ~4.9K.