The USD is mostly lower as yields retreat as oil retreats, as stocks don’t retreat (they rise) as the war retreats. In the video above I take a look at the 3 major currency pairs to kickstart the trading day in North America. What are the key levels in play and why (I show you too)? What is the bias, the risks for that bias and the targets on where you are going. Be aware. Be prepared.
The biggest development over the weekend was the pause in the U.S. bombing campaign against Iran, ending nearly two weeks of escalating military action and creating an opportunity for renewed diplomacy. President Trump halted additional strikes after military advisers concluded the campaign had largely achieved its objectives while warning that further operations could deplete key munitions with limited additional benefit.
Iran responded by saying it would also refrain from attacks as long as the U.S. maintains its pause, marking the first meaningful de-escalation in days. Tehran, however, reiterated that it remains in control of the Strait of Hormuz and denied actively pursuing direct talks with Washington, although indirect contacts through mediators continue.
Meanwhile, Oman, Qatar, and Pakistan have intensified diplomatic efforts to preserve the current lull in fighting. Despite the pause, major differences over Iran’s nuclear program, regional security, and freedom of navigation through the Strait of Hormuz remain unresolved, leaving the ceasefire fragile.
Looking ahead, the market will closely monitor whether the current pause evolves into substantive negotiations or simply proves to be a temporary break before military operations resume. Netanyahu’s expected meetings with President Trump on Tuesday along with continued diplomatic activity involving regional mediators, are likely to shape the next phase of the conflict.
Othat than the war, the Federal Reserve and Kevin Warsh begins its two-day policy meeting tomorrow, with the interest rate decision due on Wednesday at 2:00 PM ET, followed by Fed Chair Kevin Warsh’s press conference at 2:30 PM ET. This meeting does not include updated economic projections or a dot plot, meaning the focus will fall squarely on the policy statement and Warsh’s comments.
Markets broadly expect the Fed to leave interest rates unchanged, but there is the potential for a change in reaction to the higher inflation (about 36%). Absent a hike, investors will be watching for any changes in the statement’s language, signs of dissent among FOMC members, and Warsh’s assessment of inflation, labor market conditions, tariffs, and the recent impact of higher energy prices tied to Middle East tensions. With expectations for future policy less certain than in prior meetings, even subtle shifts in tone could trigger outsized moves in the dollar, Treasury yields, stocks, and gold.
US yields are lower but hold onto mostly days from last week
- 2 year yield 4.307%, -2.3 basis points .
- 5 year yield 4.391%, -3.4 basis points.
- 10 year yield 4.634%, -4.2 basis points.
- 30 year yield 5.120%, -4.1 basis points.
A snapshot of the major stock indices shows futures are implying:
- Dow industrial average was 487 points
- S&P index was 43 point
- NASDAQ index +277 points
This is one of the busiest weeks of earnings season, with more than one-third of the S&P 500 reporting results. The biggest focus will be on Big Tech, where investors will be watching not only earnings, but also AI spending, capital expenditure plans, and forward guidance.
- Tuesday (Before the Open): Boeing, Coca-Cola, PayPal
- Tuesday (After the Close): Ford, Mondelez, Visa
- Wednesday (Before the Open): Procter & Gamble, ADP, SoFi
- Wednesday (After the Close):Microsoft, Meta Platforms, ARM Holdings, Qualcomm, Lam Research, Robinhood, Starbucks
- Thursday (Before the Open): Mastercard, Bristol-Myers Squibb
- Thursday (After the Close):Apple, Amazon, Coinbase
- Friday (Before the Open):Exxon Mobil, Chevron, AbbVie, Moderna
In other markets
- Crude oil is down $6.05 at $83.26 on the hopes for peace.
- Gold is up $43 or 1.06% at $4095.
- Silver is up $0.87 or 1.5% at $59.05.
- Bitcoin is trading up $476 and $65,089
This article was written by Greg Michalowski at investinglive.com.