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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.

The latest news on the tariffs front is that the EU is reportedly prepared to accept a flat 10% tariff rate by US under certain conditions. The EU has been the most difficult one to deal with and Trump at some point tried to force them to speed up negotiations with a 50% tariff threat.

From a market perspective, tariffs are no longer that much of a deal because a 10% average tariff rate has been already priced in. We also got reports from businesses that they plan with a 10% to 20% tariff rate. But what about the July 8th deadline that was set back in April for trade talks?

US Treasury Secretary Bessent recently said that the deadline can be extended for countries negotiating in good faith with the US. Therefore, the deadline doesn’t matter anymore.

So, we are left with the markets continuing to price in better global growth ahead. There are many positive drivers including trade deals eventually getting done, expansionary fiscal policies and central bank easing.

One risk for the growth picture could be the failure of the Trump’s bill. That would trigger a repricing in growth expectations and weigh on risk assets. But for now, there is very low probability of the bill not passing.

The other risk to keep an eye on is inflation. Although we are still seeing disinflation in the data, keep in mind that inflation is a lagging indicator.

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

More to come..

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

• Bilateral trade talks are progressing
• Sticking to timeline of signing a deal before the fall of 2025

Even without an interim deal, you’d imagine that the US will surely kick the can down the road so long as negotiations are at least still taking place. The TACO trade is on between now and 9 July. 23 days to go. Tick tock, tick tock.

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

That compares with the 4.1% year-on-year reading in Q4 2024. As for labour costs, that is seen at 3.4% year-on-year as well in Q1 2025. Comparatively, labour costs were 3.8% year-on-year in the final quarter of last year. Overall, the trend since last year continues to show further easing in wage pressures and that’s been helpful in supporting the ECB’s easing cycle.

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

Investor Update –

8:55 AM, Greenwich Mean Time (GMT)

Monday, June 16, 2025

Israel’s military spokesperson announced that the IDF has destroyed approximately one-third of Iran’s missile launchers, targeting critical assets tied to the Iranian regime.

This is not only a tactical blow but also a strategic signal, indicating a possible turning point in the pace and direction of the broader conflict.

What This Means if the Trend Continues:

1. Iran’s Retaliatory Capability May Be Eroding:

   • The reported scale of destruction has already slowed the pace of Iran’s response, signaling potential disruption in their operational capacity.

   • With fewer launch capabilities, Iran may lose leverage in further escalation scenarios and find itself under increasing pressure to return to the negotiating table sooner than expected.

2. Potential De-escalation Window Opens:

   • If the missile launcher degradation continues, Tehran may opt for strategic restraint to avoid further losses, opening the door for diplomatic engagement under pressure.

   • This dynamic could reduce the probability of a full-scale regional war, at least in the short term.

3. Oil Prices Could Rebalance:

   • While initial fears drove energy prices higher, a reduction in Iran’s strike capabilities could cool market anxieties, easing upward pressure on oil and related commodities, unless a new actor escalates.

4. Markets May Shift Focus to Political Resolution:

   • Equities in energy, defense, and emerging markets may stabilize if investors begin pricing in a de-escalation phase or negotiations.

   • Risk-on appetite could return selectively, like it has already today on the futures market, especially in sectors hit hardest by initial war concerns.

Strategic Takeaway:

If Israel continues to degrade Iran’s missile infrastructure while avoiding direct provocation of a wider war and increased civilian casualties, this may accelerate diplomatic pressure on Tehran, and curb Iran’s ability to continue symmetrical retaliation. For investors, this could mark a shift from hedging geopolitical risk to positioning for potential relief rallies, especially if backchannel talks or global mediation efforts emerge.

As always, stay vigilant. Even with signs of military degradation, unexpected escalation, by Iran or its proxies, remains a wildcard. And no one has a crystal ball so watch the price action.

This article was written by Itai Levitan at www.forexlive.com.

Rate cuts by year-end

• Fed: 47 bps (99% probability of no change at the upcoming meeting)
• ECB: 19 bps (95% probability of no change at the upcoming meeting)
• BoE: 48 bps (90% probability of no change at the upcoming meeting)
• BoC: 24 bps (78% probability of no change at the upcoming meeting)
• RBA: 74 bps (73% probability of rate cut at the upcoming meeting)
• RBNZ: 27 bps (82% probability of no change at the upcoming meeting)
• SNB: 45 bps (75% probability of rate cut at the upcoming meeting)

*for the SNB, the rest of the probability is for a 50 bps cut

Rate hikes by year-end

• BoJ: 17 bps (100% probability of no change at the upcoming meeting)

The surge in oil prices saw a bit of a hawkish repricing in interest rates expectations. The change is negligible and with the expected de-escalation, we should see a pullback in oil prices.

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

• Prior +1.9%
• HICP +1.7% vs +1.9% y/y prelim
• Prior +2.0%

These are lower revisions to the preliminary figures. It doesn’t change anything for the ECB but continued easing in inflation will keep the doves at the central bank in charge.

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

USDJPY is in focus again this week for foreign exchange traders, as both geopolitical and fundamental factors are set to keep volatility high, and one of the biggest potential movers for the pair is Tuesday’s key interest rate update from the Bank of Japan.

The bank has pulled back from hawkish rhetoric in recent months, with US tariffs increasing uncertainty for Japanese markets, and that uncertainty has increased in the last few days with the conflict in the Middle East between Israel and Iran. Inflation had been a major concern for the bank, but has now taken a back seat to larger economic concerns going forward, and with the market fully pricing in another ‘hold’ at 0.5% from the bank, most FX traders are expecting to see moves in the currency on the back of any forward guidance that we receive from the Monetary Policy Statement and the subsequent Press Conference.

Anything more hawkish from Governor Kazuo Ueda should see the Yen appreciate, with trendline support on the hourly chart around 142.90 likely to provide the initial downside target, whereas a more cautious and less hawkish stance could see the Yen pull back against the dollar, with initial resistance now sitting just under 145.00. Traders are expecting to see substantial moves around the rate call but are also aware that further geopolitical updates could make the impact a more shorter-term opportunity than is normal.

Resistance 2: 145.46 – June High
Resistance 1: 144.96 – Trendline Resistance

Support 1: 142.89 – Trendline Support
Support 2: 142.10 – May Low

The post Trade USDJPY on the Bank of Japan Interest Rate Decision first appeared on IC Markets | Official Blog.

At times, the pair acts as a barometer for risk appetite in markets. As Middle East tensions escalated on Friday, EUR/CHF did fall to a low of 0.9306 but the pair is now up over 100 pips from that currently. The nudge higher today comes as we are seeing risk appetite recover back some ground. European indices are slightly higher on the day with S&P 500 futures up 0.5% currently.

Iran and Israel are still continuing to wage war against one another but broader markets are starting to look past that already. I’d imagine from here even if we did a significant escalation where risk sentiment gets knocked again, the move would be to buy the dip. This is a market that is quick to forget and even quicker to want to move on to the next thing. That especially when it comes to bad news.

In the bigger picture, there’s still that ongoing narrative of corporate selling versus retail buying. But I’d leave that story for another post.

Circling back to EUR/CHF, the bounce fits with the broader theme we’re seeing today that markets are slowly fading the Middle East tensions.

The pair is now back up to 0.9409 but faces key resistance around 0.9425-30 next, as seen on the daily chart. Since the selloff from Trump’s reciprocal tariffs announcement in April, the pair has largely been contained between 0.9300 and 0.9400. So, that represents the range play for price action with the potential for a breakout chase on either side.

To the downside though, there is still key support from the August 2024 low at 0.9210 to consider as well. That helped to arrest previous drops in November last year and in April this year.

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

Oil prices last week surged quickly as the Israel attack against Iran’s nuclear sites triggered supply fears and an increase in the geopolitical risk premium. The market eventually consolidated around the highs as traders started to look towards de-escalation as it generally happened in the past.

In fact, even if
Israel and Iran continue to launch missiles at each other, the whole thing is
already fading in the back because from a market perspective, as
long as the supply of oil is not impaired, the war can go on without any
meaningful macro impact.

Moreover, there are tentative signs
that Iran wants to de-escalate as the Iranian Foreign Minister said
that they would prepare the ground for a return to diplomacy and
negotiations if the Israeli aggression stopped. More news on de-escalation could see more downside for oil in the short-term as profit taking ensues.

On the daily chart, we can see the parabolic rally following the rumors of impending Israel attack against Iran and eventually the actual attack. The price rejected twice a major trendline where the sellers stepped in to fade the geopolitical fears. The buyers will need a break above the trendline to start targeting new highs with the 80.69 level as the first target. A break below the 72.00 support, could see the sellers increasing the bearish bets into the 65.00 level next.

On the 1 hour chart, we can see that we have created a range between the 72.00 support and the 77.00 resistance. The market participants will continue to play the range until we get a breakout on either side.

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

• Eurostoxx +0.4%
• Germany DAX +0.4%
• France CAC 40 +0.5%
• UK FTSE +0.2%
• Spain IBEX +0.7%
• Italy FTSE MIB +0.6%

US futures are also nudging higher with S&P 500 futures now up 0.5%. It’s all about fading the geopolitical tensions now as markets begin to look past the developments from last week. As has been the case before, this is a market that is quick to move on from one thing to the next. Gold is also seen down 0.6% to $3,410 on the day currently.

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