Articles

• Japan PM in call with Trump, reiterated Japan’s use on US tariffs
• The S&P, NASDAQ and Dow have worst day since May 21
• Central bank meetings will dominate the economic calendar next week
• Israel warns that Iran will pay a heavy price for its missile attack on populated areas
• Crude oil futures settle at $72.98
• Israel military: Identify missiles launched from Iran. Iran’s response has begun
• Israel Army: We destroyed a Iranian facility for producing uranium
• Kremlin. Putin tells Netanyahu that nuclear issues must be solved through diplomacy
• Iran’s Khamenei: Iranian Armed Forces will leave Israel hopeless
• Iran will not participate in nuclear talks on Sunday with the US
• Baker Hughes oil rig count -3 at 439
• Major European indices close lower for the day as a geopolitical risks weigh on sentiment
• New York Times: Israel has resumed attacks on Iran
• Netanyahu: US knew of the attack ahead of time
• University of Michigan consumer sentiment preliminary for June 60.5 vs 53.5 estimate
• Iran tells UN Security Council they will respond decisively/proportionally
• Canada wholesale trade for April – 2.3% versus -0.9% estimate
• Canada manufacturing sales for April by -2.8% versus -2.0% expected
• Canada Q1 capacity utilization rate 80.1% vs 79.8% expected
• The USD has moved higher after Israel’s strike on Iran nuclear facilities. What next?
• ForexLive European FX news wrap: Dollar gains as Israel and Iran tensions run high
• Trump: Iran has perhaps a second chance

The U.S. dollar moved higher overnight (and coming into the US session), driven by classic flight-to-safety flows following Israel’s strike on Iran. However, U.S. yields did not follow the usual script—instead of falling amid geopolitical stress, they moved higher.

This divergence from the typical Pavlovian response raises questions. It may reflect rising oil prices and the renewed threat of inflation, which can put upward pressure on yields. Alternatively, it could be a technical retracement, with yields rebounding after recently dipping below key benchmarks—4% for the 2-year, 4.5% for the 10-year, and 5% for the 30-year—that had served as rough markers for the yield curve in recent weeks.

Or perhaps it’s something broader: investor fatigue with the constant swings in policy tone from the Trump administration and escalating global tensions. Whatever the reason, markets are behaving less predictably—adding another layer of complexity for traders and policymakers alike.

Regardless of the reason, today yields moved higher.

Looking at the near-closing levels in the US debt market:

• 2 year yield 3.952%, +4.6 basis points.
• 5-year yield 4.008%, +4.9 basis points
• 10 year yield 4.408%, +5.2 basis points.
• 30 year yield 4.901%, +5.9 basis points

The U.S. dollar initially rose on the back of flight-to-safety flows, but those gains began to fade as the day progressed. While the greenback is still closing higher against all major currency pairs, it has pulled back significantly from its intraday highs.

Despite the late-day retracement, a look at end-of-day levels shows the dollar posted gains across the board, finishing stronger versus each of the major currencies.

• EUR 0.38%
• GBP 0.39%
• JPY +0.39%
• CHF +0.15%
• CAD +0.06%
• AUD +0.72%
• NZD +0.96%

For the trading week, although the USD was higher for the day, it was lower for the week:

• EUR -1.79%
• GBP -0.26%
• JPY -0.53%
• CHF -1.26%
• CAD -0.70%
• AUD unchanged
• NZD -0.06%

US stocks fell in trading today and that helped to push the major indices negative for the week:

• Dow -1.79% for the day and -1.32% for the week
• S&P -1.13% for the day and -0.39% for the week.
• NASDAQ index -1.30% for the day and -0.63% of Week.

Looking ahead, geopolitical tensions between Israel and Iran are expected to keep markets on edge, fueling ongoing uncertainty. At the same time, a packed central bank calendar will shape the direction of global monetary policy, with the Federal Reserve taking center stage on Wednesday.

While the Fed is widely expected to keep rates unchanged, the market’s attention will be firmly on the policy statement, economic projections, and the dot plot outlining future rate expectations. This comes on the heels of cooler-than-expected inflation data, which has eased some pressure. However, the potential inflationary impact of tariffs remains a concern, as does the risk of softening labor markets.

Other key central banks will also be in the spotlight. The Bank of Japan will announce its decision on Tuesday—no change is expected as policymakers remain firmly dovish. On Thursday, the Bank of England is also expected to hold rates steady, while the Swiss National Bank is anticipated to deliver a 25 basis point rate cut, potentially lowering its policy rate to 0.00%.

Beyond central banks, the economic calendar is also active, featuring U.S. retail sales, Australian employment figures, and the latest reading on UK GDP—all of which could provide further insight into the global growth outlook.

This article was written by Greg Michalowski at www.forexlive.com.

Japan’s foreign minister says:

• Japan PM in call with Trump reiterated Japan’s view on the US tariff measures
• Concluded to accelerate consultations between the ministers in charge to achieve mutual beneficial agreement.
• Exchange views on response to Israel’s recent attacks against Iran

Trump wants to increase tariffs on autos and other imports from Japan. Trump’s administration also wants Japan to open up their economy for more imported US goods. One problem is Japan is a nation of savers, while the US loves to spend and that makes the dynamics more difficult.

The U.S. is currently imposing tariffs on imported automobiles:

• A 25% ad valorem tariff on fully assembled foreign automobiles has been in effect since April 3, 2025, under a Section 232 national security order

• A corresponding 25% tariff on auto parts (such as engines and transmissions) took effect on May 3, 2025, with USMCA-compliant components temporarily exempted

• President Trump has signaled the possibility of increasing the 25% auto tariffs to further incentivize U.S.-based manufacturing and investment

This article was written by Greg Michalowski at www.forexlive.com.

The S&P, Nasdaq and Dow had their worst day since May 21 as geopolitical risk from Israel’s strike on Iran, and Iran’s counterstrike on Isreal gave traders a reason to sell.

At the close, the major indices are all down by -1.13% or more. A look at the final numbers shows:

• Dow Industrial Average fell -769.83 points or -1.79% at 42197.79. The price is closing below its 200-day moving average at 42502.38, and its 100-day moving average at 42233.09.
• S&P index fell -68.29 points or -1.13% at 5976.97. The S&P tested but held support against its 100-hour moving average at 5964.44. The low price today reached 5963.21, just below that level but bounced modestly into the close.
• NASDAQ index-255.66 or -1.30% at 19406.83. Like the S&P, the index tested its rising 100-hour moving average at 19390.24. The low price extended to 19367.42 but closed above that moving average level.

For the trading week, the major indices are closing lower with today’s the declines:

• Dow Industrial Average fell -1.32%
• S&P index fell -0.39%
• Nasdaq index fell -0.63%

This article was written by Greg Michalowski at www.forexlive.com.

Next week will be a pivotal one for global monetary policy, with key central banks scheduled to announce their latest decisions. The Bank of Japan (Tuesday), Federal Reserve (Wednesday), Swiss National Bank (Thursday), and Bank of England (Thursday) will all hold policy meetings. While the BOJ, Fed, and BOE are widely expected to keep rates unchanged, the Swiss National Bank is projected to cut rates by 25 basis points to 0.0%.

The main spotlight will fall on the Federal Reserve, not only for its rate decision but also for its updated economic projections and the release of its closely watched dot plot, which outlines expectations for future rate moves. President Trump has continued to push for a 100 basis point rate cut, but Fed officials, prior to the pre-meeting blackout period, signaled no urgency to move, citing ongoing uncertainty around tariffs and their unknown impact on inflation, employment and economic growth.

The backdrop for the Fed is increasingly complex. Oil prices are rising, and the Iran-Israel conflict is becoming more intense, amplifying geopolitical risk. Meanwhile, U.S. economic growth remains positive. This environment likely keeps the Fed on hold—for now. However, if there is a surprise, the recent softer CPI and PPI readings may offer a window for a surprise modest rate cut, particularly as other central banks globally have started easing (a cut is in reaction to global spreads?). In contrast, the Bank of Japan appears firmly anchored in its long-standing ultra-loose stance, with little indication of rate hikes on the horizon.

Other key events include:

• US retail sales (Tuesday)
• Australian employment Wednesday/Thursday in Australia.
• UK retail sales on Friday

Geopolitical risk will also take center stage.

With global conflict, you wonder if there will be another week of no tariffs resolution that they Trump administration has been touting since the Saudi Arabia roadshow. Apart from a redo of the China deal, there has been little in the way of progress with other nations.

Monday, June 16

• Time: Tentative – BOJ Policy Rate | Forecast: <0.50% | Previous: <0.50%

• Time: Tentative – Monetary Policy Statement

• Time: Tentative – BOJ Press Conference

Tuesday, June 17

• 8:30am (USD) – Core Retail Sales m/m | Forecast: 0.2% | Previous: 0.1%

• 8:30am (USD) – Retail Sales m/m | Forecast: -0.6% | Previous: 0.1%

Wednesday, June 18

• 2:00am (GBP) – CPI y/y | Forecast: 3.3% | Previous: 3.5%

• 8:30am (USD) – Unemployment Claims | Forecast: 248K | Previous: 242K

• 11:15am (CAD) – BOC Gov Macklem Speaks

• 2:00pm (USD) – Federal Funds Rate | Forecast: 4.50% | Previous: 4.50%

• 2:00pm (USD) – FOMC Economic Projections

• 2:00pm (USD) – FOMC Statement

• 2:30pm (USD) – FOMC Press Conference

• 6:45pm (NZD) – GDP q/q | Forecast: 0.7% | Previous: 0.7%

• 9:30pm (AUD) – Employment Change | Forecast: 19.9K | Previous: 89.0K

• 9:30pm (AUD) – Unemployment Rate | Forecast: 4.1% | Previous: 4.1%

Thursday, June 19

• 3:30am (CHF) – SNB Monetary Policy Assessment

• 3:30am (CHF) – SNB Policy Rate | Forecast: 0.00% | Previous: 0.25%

• 4:00am (CHF) – SNB Press Conference

• 7:00am (GBP) – Monetary Policy Summary

• 7:00am (GBP) – MPC Official Bank Rate Votes | Forecast: 0–2–7 | Previous: 0–1–8

• 7:00am (GBP) – Official Bank Rate | Forecast: 4.25% | Previous: 4.25%

Friday, June 20

• 2:00am (GBP) – Retail Sales m/m | Forecast: -0.5% | Previous: 1.2%

• 2:40am (JPY) – BOJ Gov Ueda Speaks

This article was written by Greg Michalowski at www.forexlive.com.

The IAEA (International Atomic Energy Agency) Grossi is saying:

• Above ground plant where Iran was producing uranium enriched of up to 60% uranium has been destroyed
• No indication of attack on underground enrichment halls at Natanz, but an attack on the power supplies may have damages centrifuges
• There is radiological and chemical contamination inside facilites at Natanz
• Iran says Esfahan nuclear site hit by Israel.

This article was written by Greg Michalowski at www.forexlive.com.

Israel this morning that Iran will pay a heavy price for its missile attack on populated areas:

• Israel may hit energy facilities in response

If Israel attacks Kharg Island, that would be a big thing:

Kharg Island is critically important to Iran’s oil industry—both strategically and economically. Here’s why:

Location & Infrastructure

• Situated in the Persian Gulf, about 25 km off the Iranian mainland.

• It serves as Iran’s largest oil export terminal, handling the vast majority of the country’s crude exports.

• Features include:

  • Massive storage facilities

  • Multiple loading docks for Very Large Crude Carriers (VLCCs)

  • Pipelines connecting to Iran’s southern oil fields

Export Capacity

• Handles over 90% of Iran’s oil exports under normal conditions.

• Daily capacity: up to 6 million barrels per day, though actual volumes vary due to sanctions.

• Crucial for loading and shipping Iranian crude to Asian and global buyers (when allowed).

Strategic & Security Role

• Kharg Island’s position near the Strait of Hormuz makes it vital for maritime oil logistics.

• It has been a target during past conflicts (e.g., the Iran–Iraq War) due to its high strategic value.

• Iran guards the island heavily due to its importance to the national economy and revenue stream.

In Summary

Kharg Island is the backbone of Iran’s oil export system, functioning as a high-capacity, strategically located hub that connects its oil fields to global markets. Any disruption to Kharg Island—through conflict, or sanctions—would severely constrain Iran’s oil export capability and revenue.

Although it is tempting it probably would not happen given the disruption it could have to oil markets.

What the counterattack does open is it gives Israel the opportunity to continue to fight/bomb. We know from Gaza/Hammas that if israal is provoked, they won’t take their foot off the gas pedal. Israel wants to cease all threats of nuclear. I would imagine, that would take negotiations off the table simply because they cannot be trusted.

I may be wrong but when PM Netanyhu has had enough, he has had enough.

What does the US do?

Trump prefers to be the defense supplier vs the aggressor. Part of me thinks he doesn’t mind conflict if it leads to reliance on the US defense industry.

This article was written by Greg Michalowski at www.forexlive.com.

The price of July crude oil futures are settling up $4.94 or 7.26% at $72.98

This article was written by Greg Michalowski at www.forexlive.com.

Major US stock indices are moving to session lows.

• The Dow industrial average is now down around 850 points or -1.98% at 42114.88.
• The S&P index is down -78 points or -1.25% at 5969.73.
• The NASDAQ index is down -283.1-1.44% at 19379.62

Both the NASDAQ and the S&P index are testing their 100-hour moving averages. For the S&P index the 100 hour moving average is at 5962.84. The low price reached 5964.26, just above the 100 hour moving average.

For the NASDAQ index the 100-hour moving average is at 19384.13. The current prices are just above those levels.. The low price just reached 19369.32 – below the level.

This article was written by Greg Michalowski at www.forexlive.com.

Israel military:

• identified missile launched from Iran toward the territory of the state of Israel
• DefenSe systems are operating to intercept the threat.
• The public is instructed to enter a protective space and remain there until further notice

This article was written by Greg Michalowski at www.forexlive.com.

Sky news is reporting Israeli army:

• Destroyed a facility for producing metallic uranium, infrastructure for converting enriched uranium, and laboratories in Isfahan

This article was written by Greg Michalowski at www.forexlive.com.

Russia’s Putin spoke to both Iranian President Pezeshkian and Israeli PM Netanyahu:

• Told Netanyahu that issues surrounding Iran’s nuclear program must be solved through diplomacy
• Told Iran’s Pezeshkian that Russia offers condolences for the dead, denounces Israeli’s actions as being in violation of UN charter

This article was written by Greg Michalowski at www.forexlive.com.

France’s Macron:

• Iran carries heavy responsibility in the destabilization of the region.
• We cannot live in a world where Iran has nuclear weapons.
• France calls on restraint from parties.
• Regrets Iran didn’t take overtures from United States.
• We will be on our partners assigned in the region, including with our armed forces.
• Urges French citizens not to go to the region
• Iran program was close to a critical stage
• France still believes in diplomatic route on Iran
• That is why France didn’t recommend attack from Israel
• I wish today is for diplomatic talks to resume.
• Support Israel is not unconditional or without any limits
• Should Israel be attacked by Iran, France would take part in defense of Israel
• France would not take part in offensive on Iran however.
• Europeans should be included in future talks on Iran nuclear issue, but sees renewed diplomacy as difficult.

This article was written by Greg Michalowski at www.forexlive.com.