EU REAL ESTATE: Vesteda (VESTNL): S&P Off Watch Negative

Iranian foreign minister on X, echoing the sentiment seen throughout this morning:

Seyed Abbas Araghchi
@araghchi
"For immediate attention:The ceasefire between Iran and the US is unequivocally a ceasefire on all fronts, including in Lebanon. Its violation on one front is a violation of the ceasefire on all fronts. The US and Israel are responsible for the consequences of any violation."

• USDJPY is testing an important retracement at 159.38, 76.4% of the sell-off between Apr 30 - May 6.
• A clear break of this level would strengthen the current bullish theme and pave the way for an extension towards 160.72, the Apr 30 high.
• Note too that a continuation higher would also undermine an existing bearish threat highlighted by the large bodied bearish candle on Apr 30.
• While price remains between the open and close of Apr 30 (the candle body), it is possible that the recovery since May 6 is a correction.
• A break of 160.72, the Apr 30 high would cancel this bear threat.
• First important support to watch lies at 158.49.

• The Eurozone unemployment rate was 6.3% in April, a touch above consensus of 6.2% with March’s reading also revised up a tenth. The rate remains close to record lows, and sits two tenths below the EC’s NAWRU (Non-Accelerating Wage Rate of Unemployment) estimate of 6.5%.
• ECB officials have noted that the wage impact of the Iran war-driven energy price shock will only be known later this year, and that waiting for this data risks the Governing Council falling behind the curve. However, assuming an initial hike is delivered as expected in June, wage will become increasingly important in determining whether further tightening is required (and if so, how much tightening).
• The onset of the Iran war has seen a softening of Eurozone employment expectations, which reached a multi-year low in April before rebounding a little in May. Meanwhile, the EC’s labour hoarding indicator moved higher in April and held at those levels in May.
• These sentiment indices suggest that while the war has dampened labour demand, companies are hesitant to respond with layoffs for now (presumably anticipating that the latest energy shock will be temporary).
• This is likely to keep the vacancy rate anchored in the coming quarters, helping to maintain labour market slack and keep wage-led inflation risks in check even if the unemployment rate remains below u*.