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NBC is reporting that Trump says:

• Iran officials are calling him to discuss the situation.
• Iran missed opportunity to make a deal, but they might now have another opportunity

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

Despite better than expected University of Michigan sentiment, stocks have moved to new session lows and yields have moved to new session highs. The US bonds have also decoupled from the flight to safety flows normally seen in times of geopolitical stress.

For the NASDAQ index, it is moving closer to its rising 100 hour moving average and 19349.45. The low price just reached 19425.68. The current price is down -231.2 or -1.18% at 19431.

For the S&P index, it is still a decent distance away from its rising 100 hour moving average at 5953.64. The low price reached 5983.83 so far today. The current price is down -0.96% at 5986.81.

The USD moved higher in the normal Pavlovian reaction to geopolitical risks, but has moved lower more recently in the US session.

The EURUSD is trading at 1.1538 after reaching a low near 1.1488. The rising 100 hour moving average comes in at 1.14775. The price briefly moved below the when high from June 5.

The USDJPY is off its high at 144.48 and looks to test its 200 hour moving average at 144.048.

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

• Consumer sentiment last month 52.5
• Current conditions last month 58.9
• expectations last month 47.9
• 1 year inflation last month 6.6%
• 5- year inflation last month 4.2%

This month the survery results are more positive:

• Consumer sentiments 60.5 versus 53.5 estimate
• Current conditions 63.7 versus 59.4 estimate.
• Expectations 58.4 versus 49.0 estimate
• 1-year inflation 5.1% down from 6.6% last month.
• 5-year inflation 4.1% down from 4.2% last month

The Joann Hsu from the University of Michigan commented:

Consumer sentiment improved for the first time in six months, climbing 16% from last month but remaining about 20% below December 2024, when sentiment had exhibited a post-election bump. These trends were unanimous across the distributions of age, income, wealth, political party, and geographic region. Moreover, all five index components rose, with a particularly steep increase for short and long-run expected business conditions, consistent with a perceived easing of pressures from tariffs. Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed. However, consumers still perceive wide-ranging downside risks to the economy. Their views of business conditions, personal finances, buying conditions for big ticket items, labor markets, and stock markets all remain well below six months ago in December 2024. Despite this month’s notable improvement, consumers remain guarded and concerned about the trajectory of the economy.Year-ahead inflation expectations plunged from 6.6% last month to 5.1% this month. Long-run inflation expectations fell for the second straight month, stepping down from 4.2% in May to 4.1% in June. Both readings are the lowest in three months. Consumers’ fears about the potential impact of tariffs on future inflation have softened somewhat in June. Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead.

The final results will be released in 10 or so days from now.

The better than expected data has not materially impacted stock prices. US yields are moving higher despite the data and are near highs for the day:

• 2 year 3.945%, +3.9 basis points
• 10 year 4.398%, +4.2 basis points
• 30 year 4.885%, +4.3 basis points.

Gold remains elevated with gains of $47 or 1.4% at $3433. The high reached $3446.79.

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

Japan’s Prime Minister Ishiba says he has agreed to meet with Pres. Trump in Canada.

His position has not changed and that he wants the removal of US tariffs. Pres. Trump yesterday said that auto tariffs may start soon

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

OPEC Secretary-General says

• There are currently no developments in supply or market dynamics
• Does not see the need for unnecessary measures.

Crude oil prices are sharply higher amid growing concerns over supply disruptions. On the technical front, the daily chart shows a strong breakout above the 200-day moving average, which sits at $68.47. This level had previously capped gains, but the price did close above the MA level yesterday increasing the bullish bias.

Today’s move also saw a break above the 61.8% retracement of the 2025 trading range, located near $70.96—adding to the bullish momentum. Crude is currently trading at $72.91, up $4.09 or 5.94% on the day, after hitting an intraday high of $77.57, the highest level since January 20. For reference, the year’s high remains at $80.73, reached on January 15.

Close support is now seen at the April 2 high price at $72.22. Move below that level and the 61.8% retracement at $70.96 would be targeted.

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

For what it is worth, Iran is threatening a retaliatory attack, in a letter to the UN Security Council, saying:

• Iran will respond decisively, proportionally to Israelis unlawful, cowardly acts.

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

• Prior quarter 79.8% (revised to 79.7%)

The industrial capacity utilization rate is the ratio of an industry’s actual output to its estimated potential output. This is not a market moving release but it shows further improvement, which is what you generally see when the central bank eases monetary policy.

Further details:

The capacity utilization rate in the mining, quarrying, and oil and gas
extraction sector increased by 0.7 percentage points in the first
quarter to 76.7%. This rise coincided with an increase in activity in
the oil sands and in the support activities for mining and oil and gas
extraction.

The capacity utilization rate in the electric power generation,
transmission and distribution sector also increased, going from 83.2% in
the fourth quarter of 2024 to 86.1% in the first quarter. This increase
coincided with a rise in demand for electricity for heating purposes,
stemming from below-normal temperatures being recorded in certain parts
of the country over the course of the first quarter.

The seasonally adjusted capacity utilization rate in the manufacturing
sector slightly decreased by 0.2 percentage points to 77.9% in the first
quarter. This decline can mainly be attributed to petroleum and coal
product manufacturing (-6.9 percentage points) and fabricated metal product manufacturing (-3.1 percentage points).

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

• Prior month -1.4%
• Manufacturing sales for April -2.8% versus -2.0% expected -the largest monthly drop since October 2023 and the lowest level since January 2022.

Details:

• Key contributors to the decline were:

  • Petroleum and coal products: -10.9%

  • Motor vehicles: -8.3%

  • Primary metals: -4.4%

• Excluding petroleum and coal products, manufacturing sales still fell 1.8%.

• Year-over-year, total manufacturing sales declined 2.7% in April.

• On a constant dollar basis, manufacturing sales decreased 1.8%.

• The Industrial Product Price Index fell 0.8% in April.

Feedback from manufacturers in April indicated that recent U.S. tariffs have significantly impacted Canada’s manufacturing sector. About half of respondents reported effects, with one-third citing price increases, one-quarter noting higher costs for raw materials, shipping, or labor, and one-fifth observing shifts in product demand. The transportation equipment, primary metal, and fabricated metal subsectors were hit hardest, with Ontario experiencing the largest tariff-related sales decline.

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

• Prior month +0.2%
• Wholesale trade for April -2.3% versus -0.9% expected

• Sales declined in 6 of 7 subsectors, accounting for 81.6% of total wholesale sales.

• The motor vehicle and parts subsector saw the largest drop: -6.5% to $14.3 billion.

• Year-over-year, wholesale sales were up 0.1% in April.

• In volume terms, wholesale sales (excluding specified categories) decreased 2.2% in April.

Details

• After leading the increase in wholesale sales in March, sales in the motor vehicle and motor vehicle parts and accessories subsector decreased 6.5% in April to reach $14.3 billion.
• In April, seven provinces recorded a decrease in wholesale sales, with Ontario leading the way.
• Wholesale inventories (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) were down 0.2% to $129.4 billion in April.

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

The headline news from Israel and Iran will be continue. The goal is the Iranian enrichment program. Will they give it up? Will they dig in?

Other than that, the University of Michigan consumer sentiment preliminary data for June will be released at 10 AM with:

• Sentiment expected to rise to 53.5 from 52.2.
• Current conditions is expected to rise to 59.4 from 58.9 and the
• Expectations expected to rise to 49.0 from 47.9.

The 1-year inflation expectations last month came at 6.6% while the 5-year was at 4.2%.

Canada data will also be released at 8:30 AM with:

• Capacity utilization for Q1 expected at 79.8 versus 79.8 last month.
• Manufacturing sales -2.0% expected versus -1.4% last month.
• Wholesale trade -0.9% versus +0.2% last month.

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

Headlines:

• Trump: Iran must make a deal before there is nothing left
• Iran pulls out of nuclear talks planned for Sunday
• Iran’s legitimate and powerful response will make Israel regret its foolish act
• Why it’s hard to see Iran starting a full-fledged war against Israel
• Israel is prepared for the possibility of a full-fledged war with Iran – TASS
• Iraq affirms that gas supply flows from Iran were not affected by Israel strikes overnight
• Iran confirms key military casualties, says Israel has crossed all red lines
• Japan expects a trade deal with the US to spare it from higher auto tariffs – BBG
• Japan prime minister Ishiba is reportedly to hold phone call with US president Trump today
• Eurozone April industrial production -2.4% vs -1.7% m/m expected
• Eurozone April trade balance €9.9 billion vs €36.8 billion prior
• Germany May wholesale price index -0.3% vs -0.1% m/m prior
• Germany May final CPI +2.1% vs +2.1% y/y prelim
• Spain May final CPI +2.0% vs +1.9% y/y prelim
• France May final CPI +0.7% vs +0.7% y/y prelim
• China May M2 money supply +7.9% vs +8.1% y/y expected

Markets:

• USD leads, NZD lags on the day
• European equities lower; S&P 500 futures down 1.0%
• US 10-year yields flat at 4.360%
• Gold up 1.1% to $3,419.80
• WTI crude up 5.9% to $72.91
• Bitcoin down 1.0% to $104,898

All eyes are on the Middle East as tensions remain high after Israel’s overnight strikes across Iran. The attacks killed numerous key Iranian military officials and now we’re about to see what the response will be from Iran. Israel has reaffirmed that they will keep up the aggression with Trump even applauding the move. The US president said the attack was “excellent” and that “there’s more to come, a lot more”.

In markets, it’s all about risk-off sentiment dominating the theme. As tensions escalate, oil is staying more bid but off earlier highs on the day. WTI crude is still up nearly 6% just under $73. Meanwhile, gold is bid by about 1% as it holds a push above $3,400 to its highest levels since early May.

In FX, the dollar managed to find back its traditional roots as a haven currency – a rather rare occasion since Trump’s tariffs war started. The greenback is bid across the board with EUR/USD falling back to 1.1500, down 0.7% on the day. Meanwhile, USD/JPY also nudged higher as it climbs up by 0.6% to 144.30 and USD/CHF is also up 0.4% to 0.8135 on the day.

The aussie and kiwi are the two laggards amid the more defensive risk mood with AUD/USD down 0.8% to 0.6480 and NZD/USD down 1.0% to 0.6010 currently.

In the equities space, it’s all red across the board with European indices down over 1% mostly while S&P 500 futures are also down thereabouts as we look towards US trading. In the bond market, yields were looking heavy at the start of the session but have clawed their way back up to be little changed on the day. 10-year yields in the US were down to around 4.32% earlier but are now back up to 4.36%.

Let’s see what the next chapter of the battle will bring before the weekend.

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

• Iran has perhaps a second chance.
• Had given Iran 60 day ultimatum for a deal.

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