Articles

Gold quickly lower on this report from the WSJ.

• Messages passed by Tehran through intermediaries seek a return to talks if the U.S. stays out of the fight

This article was written by Adam Button at www.forexlive.com.

Local media in Iran report the sounds of explosions near Tehran.

This article was written by Adam Button at www.forexlive.com.

S&P 500 futures are up 40 points, or 0.7% ahead of the US weekly open. The rebound is part of a broad market reversal from the moves from late last week when Israel struck Iran, followed by Iranian retaliation.

The conflict doesn’t look like it’s about to end but the US has stayed on the sidelines and that has the market optimistic that the fight won’t spread.

Oil and gold are down today as well in reversals from Friday’s moves.

This article was written by Adam Button at www.forexlive.com.

The G7 meetings in Canada start today and they will be a major focus of markets this week.

There were big hopes for trade deals ahead of time but yesterday, Canada’s minister of US trade Dominic LeBlanc said progress hasn’t come quickly enough.

“I’m hopeful we’ll get there, but it’s not fast enough,” LeBlanc said in an interview with The West Block.

“Our hope was that we would have made more progress before the president
arrives in Alberta for the G7. We haven’t hit that sweep spot.”

Sticky points are on steel and aluminum tariffs, autos and duties on other sectors.

Leblanc said conversations have been “frequent and constructive” but warned that time is running out to make a deal before Canada strikes back.

So far those comments haven’t hurt the loonie, it’s trading at the best levels since October.

This article was written by Adam Button at www.forexlive.com.

• Prior reading was -9.2

Details:

• New orders: -14.2 vs +7.0 prior
• Shipments: -7.2 vs +3.5 prior
• Unfilled orders: -8.3 vs +4.8 prior
• Delivery times: +1.8 vs +1.0 prior
• Inventories: +0.9 vs +4.8 prior
• Prices paid: +46.8 vs +59.0 prior
• Prices received: +26.6 vs +22.9 prior
• Employment: +4.7 vs -5.1 prior
• Average employee workweek: -1.5 vs -3.4 prior

Six-month ahead expectations

• General business conditions: +21.2 vs -2.0 prior
• New orders: +26.1 vs -2.7 prior
• Capital expenditures: -7.3 vs -6.7 prior

Prices paid came down but so did new orders.

This article was written by Adam Button at www.forexlive.com.

Netanyahu says ‘we are on our way to achieve our two main objectives, eliminating the nuclear threat and eliminating the missile threat’.

He also said: “we are telling the citizens of Tehran to evacuate and are taking action'”

There is some optimism today after an earlier report citing sources in Iran but this isn’t exactly encouraging.

This article was written by Adam Button at www.forexlive.com.

• Prior was 278.6K (revised to 280.2K)

USD/CAD was trading at 1.3564 ahead of the release, close to the lowest levels since October. This is a good sign that house construction is continuing despite falling prices in much of the country.

This article was written by Adam Button at www.forexlive.com.

• Expects a ‘sound’ second half for 2025 world economy after it was stronger than expected in H1
• Sees 2026 non-OPEC supply up 730k bpd vs +800k prior
• Sees 2026 US shale output flat
• OPEC+ crude output rose 180K bped in May

Oil is in focus today. WTI rose as high as $77.49 at the open but is all the way back to $71.98, down $1.00 on the day on better signals for peace between Iran and Israel.

This article was written by Adam Button at www.forexlive.com.

The BoJ on Tuesday is expected to keep interest rates unchanged at 0.5% and slow the reduction in its bond purchases from FY2026. The focus will be on the tapering plan.

There are little expectations that the BoJ will make changes to its current tapering plan and will announce changes just for next fiscal year cutting the quarterly taper size to around 200 billion yen.

If the central bank announces changes to the current fiscal year, that will be a surprise and will move the yen a lot. A faster tapering pace would give the JPY a boost, while a slower pace would weaken it.

On the interest rates front, the market is pricing just 17 bps of tightening this year which is basically 50% chance of a 25 bps hike by year-end. The commentary from BoJ speakers has been roughly the same and there have been no hints to a rate adjustment coming anytime soon.

They continue to place a great deal on the US-Japan trade deal and the evolution of inflation. Underlying inflation has been rising steadily in Japan and that should keep the rate hike probabilities high, especially considering that we will eventually get to a trade deal. Therefore, watch out for more clear signals on interest rates changes and the timing.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

China National Bureau of Statistics (NBS) spokesperson:

• Geneva discussions benefit trade relations between China, US

• China online sales promotions boosted retail sales in May

• China trade program boosts retail sales in May
• Many uncertainties in the international environment, foundation of economic recovery needs to be strengthened
• Policy toolkit is well-stocked, has the flexibility to adjust macro policies according to changing circumstances
• Overall level of prices still at a low level, which affects enterprises, employment and incomes
• There is difficulty in recruiting workers in some sectors and a high level of pressure on employment for some groups
• Still some pressure on maintaining stable employment, primarily due to the complex and changing external environment
• Complex external environment impacts China labor market
• Due to factors such as increased uncertainty in trade policies, it has been particularly challenging for China’s economy to maintain stable growth since the second quarter

Data is here:

• China Industrial Output May 2025 +5.8% y/y (expected 5.9%, prior +6.1%)

Retail slaes growth in May was the fastest since December 2023

This article was written by Eamonn Sheridan at www.forexlive.com.

Headlines:

• Crude oil consolidates as supply fears ease
• Israel: We Destoryed One-Third of Iranian Regime’s Missile Launchers
• EU reportedly prepared to accept flat 10% tariffs by US under clear conditions
• India says aiming to sign interim deal with the US before 9 July
• US reportedly pushes Vietnam to reduce reliance on Chinese tech in tariff talks
• How have interest rates expectations changed following the surge in oil prices?
• ECB’s Nagel says not sensible to signal either pause or rate cut for the time being
• ECB’s de Guindos: EUR/USD exchange rate at 1.15 is no big obstacle on inflation target
• Italy May final CPI +1.6% vs +1.7% y/y prelim
• Switzerland May producer and import prices -0.5% vs +0.1% m/m prior
• Eurozone wage costs seen easing in Q1 2025
• China to hold a NPC Standing Committee meeting June 24 to 27

Markets:

• NZD leads, CHF and JPY lag on the day
• European equities higher; S&P 500 futures up 0.6%
• US 10-year yields up 1.8 bps to 4.444%
• Gold down 0.5% to $3,413.62
• WTI crude down 3.4% to $70.45
• Bitcoin up 2.1% to $106,981

As we get into the new week, the fears surrounding the tensions in the Middle East are beginning to ebb. Or at least markets are looking past that and wanting to move on already, especially as concerns surrounding oil supplies are seen easing.

The tensions between Iran and Israel remain high but investors are seeking some cautious optimism in fading the geopolitical situation for now.

Equities are moving higher and the dollar is slightly lower at the balance to start the week.

European indices are seeing modest gains while S&P 500 futures are up 0.6% in trying to start up a bounce back following last week’s decline.

EUR/USD nudged higher from 1.1540 earlier to 1.1575 while AUD/USD is up 0.5% to 0.6520 as buyers seek another attempt to firmly clear the 0.6500 mark. Besides that, there were light changes for USD/JPY, GBP/USD, and USD/CHF with price holding flattish at 144.13, 1.3580, and 0.8111 respectively.

As the market fears ebb, gold is seen down back to $3,413 while oil is falling further as it moves back on approach towards $70.

With market players looking to move on, the focus now slowly shifts back towards upcoming key central bank meetings this week. On the list this week, we’ll have the BOJ, Fed, SNB, and BOE all announcing their respective policy decisions in the coming days.

This article was written by Justin Low at www.forexlive.com.

Iranwire is reporting that “in an exclusive interview, a high-ranking Iranian diplomat revealed that
Iran’s military and political leadership are prepared to give up
uranium enrichment to preserve the regime.”

The diplomat speaking on condition of anonimity said that they need a face-saving solution.

This article was written by Giuseppe Dellamotta at www.forexlive.com.