Headlines:
- Iran’s armed forces announce end of military operations against Israel
- Trump: Both sides, Israel and Iran, are looking to do an immediate CEASEFIRE!
- Iran is prepared for a prolonged conflict with Israel and for strikes against US interests
- Iran says that US is directly responsible for recent breaches in ceasefire
- Oil prices move back up to start the week as Middle East tensions flare up
- Gold tumbles to fresh monthly lows as strong NFP delivers hawkish Fed reality check
- Euro area investor sentiment recovers slightly in June but dark clouds remain
- German factory orders fall in April as stockpiling, advanced ordering effect dissipates
Markets:
- WTI crude up 1.8% to $92.14
- European indices mixed, little changed
- S&P 500 futures up 0.8%, Nasdaq futures up 1.4%
- NZD leads, USD and CHF lag
- US 10-year yields flat at 4.54%
- Gold down 0.1% to $4,325
It’s a brand new week but the market focus stays the same, with it being all about the US-Iran conflict still.
The latest developments from the weekend saw Iran and Israel exchange missile strikes, with tensions mounting and questions being raised over how this will impact the US-Iran deal overall.
The session started with a further exchange of salvos, with Israel targeting strategic facilities in Iran while Iran moved to target the West Bank and central Israel with its own ballistic missile launches.
That kept oil prices underpinned with the risk mood keeping on edge, as US futures fluctuated between slight gains and losses.
But when US president Trump got up, he called for an end to the hostilities and eventually that led to Iran calling off its military operations against Israel – for now at least.
That helped to see the risk mood pick up as Trump continues to tout that a deal is “very close”. However, we’re still yet to see anything to show for it and this ceasefire also still doesn’t excuse the fact that Israel can break it all by attacking Lebanon as they have been doing.
As such, that is still one key red line that needs to stick in order for the US-Iran deal to hold for the next 60 days once announced.
In any case, markets are recovering some poise after the heavy losses on Friday and from earlier today. Oil prices are still up but off early highs, with WTI crude now up 1.8% to $92.14 – though down from above $95 earlier.
Meanwhile, European indices are lightly changed but paring losses for the most part while US futures are pushing higher. Tech shares are leading the charge, looking to produce a strong rebound from the sharp decline on Friday.
S&P 500 futures are up 0.8% while Nasdaq futures are up 1.4% with semiconductor shares rebounding back. Broadcom shares are up near 3% in pre-market, with Micron shares up over 6% and AMD shares up nearly 3% ahead of the open.
Amid the barrage of headlines, the dollar is down slightly with USD/JPY backing away from 160.20 to just below 160.00 currently. Meanwhile, EUR/USD is up 0.1% to 1.1535 and AUD/USD up 0.3% to 0.7070 on the day.
Looking elsewhere, 10-year Treasury yields are moving back to flat levels at 4.54% and gold has pared deep losses from $4,270 earlier to be down just 0.1% to $4,325 at the moment.
It’s still all to play for though as the conflict drags on for longer and a more hawkish Fed looks to enter the chat.
This article was written by Justin Low at investinglive.com.
