investingLive Americas FX news wrap: Markets whipsaw on conflicting peace deal news

• AUD/NZD experiences the largest single-day decline since 2022 on divergent drivers
• US sells 5-year notes at 4.182% vs 4.181% WI
• Trump: We’re not there yet on Iran deal, not satisfied with it
• Trump says Iran would not get sanctions relief in exchange for giving up enriched uranium
• ECB’s de Guindos says current shock is causing lower economic growth and higher inflation
• Tech sector tumbles: Healthcare and consumer cyclicals lead the charge
• White House on X indirectly denies the Iran’s state TV reported MoU draft
• US Richmond Fed May composite index +13 vs +3 prior
• The major US stock indices open higher on US-Iran deal optimism but gains fade
• Iran’s state TV says it has a draft of the initial unofficial framework for the MoU
• Weekly US ADP pulse 35.75K vs 42.25K prior
• ECB policymaker Makhlouf: I haven’t seen second-round effects on inflation emerging

The main news of the session was an Iran’s state TV report saying that they obtained a draft of the framework for the Memorandum of Understanding (MoU) and that it included the withdrawal of US military forces from vicinity of Iran and lifting of the naval blockade in exchange for the reopening of the Strait of Hormuz to pre-war levels.

This report was then denied by the White House and labeled as “complete fabrication”. They also added that nobody should believe what the Iranian state media is putting out.

In a phone call with PBS news, Trump explicitly stated that Iran would not receive sanctions relief in exchange for giving up its highly enriched uranium. This doesn’t sound like progress to me. Iran wants the removal of sanctions, unfreezing of assets, the lifting of the US blockade and limited compromise on nuclear material. Trump is saying that even if Iran gave up its highly enriched uranium, he won’t remove sanctions.

Lastly, Trump spoke at a Cabinet Meeting and said that they are not there yet on an Iran deal because they are not satisfied with it. He also added that Iran is negotiating on fumes suggesting that Tehran has no leverage and he has the upper hand. He added though that Iran is starting to give things the US demanded and that they are doing well in terms of the talks.

On the data side, we got the US weekly ADP pulse data which continued to point to resilient labour market and the Richmond Fed composite index which showed further improvement. The economic data has been strong and there’s no reason whatsoever for the Fed to cut rates further even if oil prices drop on a deal.

This article was written by Giuseppe Dellamotta at investinglive.com.