Headlines:
- Iran will not restore Strait of Hormuz status to pre-war level – IRNA
- The US-Iran MoU could be signed as soon as Sunday in Geneva – BBG
- Here is what the US-Iran deal looks set to be like after another TACO moment
- Iran media says that memorandum of understanding draft still not yet finalised
- Oil prices plunge after Iran confirms details of the deal with the US
- The countdown continues ahead of the Wall Street open, all eyes on SpaceX
- ECB policymaker Nagel says keeping all options open for July meeting
- ECB’s Dolenc says current rate level gives enough flexibility to respond to energy shock
- Core inflation confirmed to have picked up in Germany during May
- French inflation accelerates in May as services inflation push up
- Spanish inflation picks up in May, core prices also continue to nudge higher
- UK economy sees marginal contraction in April as services sector cools
Markets:
- WTI crude down 3.5% to $84.60
- US dollar little changed, keeps steadier
- Equities stay optimistic, European indices trade over 1% higher
- S&P 500 futures up 0.5%, Nasdaq futures up 0.5% with eyes on SpaceX debut
- US 10-year yields down 0.2 bps to 4.46%
- Gold down 0.2% to $4,204
- Bitcoin up 0.4% to $63,631
The main story of the session was that Iran has emerged with key details of its deal with the US. And it is either a case of there going to be another major TACO moment or this deal is going to fall apart before it even begins.
The details point to many concessions being offered up by the US with the summarised version here. And if so, it is essentially a reset back to 27 February. Tell me, what was the point of this war again?
As the details surfaced, markets are cheering on the headlines but not taking things all too far. As a reminder, there will still be another 60 days of negotiations after this. And besides the point, we’re still yet to see how Trump can spin this all into a “win”.
Oil prices are down with WTI crude lower by 3.5% to $84.60. The low earlier touched $83.20 before Iran came out to say that they will still be the ones in charge over the Strait of Hormuz pending any final agreement.
Meanwhile, the dollar is keeping steadier after a slight nudge lower on the headlines. EUR/USD is flat again at 1.1575 while USD/JPY sits higher by 0.1% at 160.15 on the day. Besides that, AUD/USD is down 0.1% to 0.7040 on the day.
In the equities space, European indices are posting solid gains in looking to wrap up the week. The DAX is up 1.5% with the CAC 40 up 1.7% currently. As for US futures, the mood music remains bright with all eyes on the SpaceX trading debut later today. S&P 500 futures are up 0.5% with Nasdaq futures also up 0.5%.
As for precious metals, gold raced higher on the US-Iran news early on but saw gains tempered after. The high touched $4,245 before price is dropping back lower to be down 0.3% on the day at $4,200.
Deal or no deal? We can only wait and see. But whatever the case is, just be reminded that it doesn’t mean that this is “the end” of the war. For some context, this is how things may unfold with regards to the Strait of Hormuz:
This article was written by Justin Low at investinglive.com.
