Markets still hoping for a peace deal with Iran

Good morning

Congratulations to Aston Villa for their convincing 3-0 win in the Europa League final yesterday evening, their first European trophy for 44 years. 

Trump continues to threaten Iran but did say he’d prefer to avoid war if it meant waiting a few days, with a suggestion that the final stages of talks were taking place.  The markets responded positively, US equities were up, helped as well by strong Nvidia earnings, and most Asian markets followed suit, with Nikkei leading the way, up over 3%.  Still, European markets are lower on the open this morning. 

The US dollar weakened a little through the afternoon, GBPUSD traded up to 1.3460 from below 1.3400 and EURUSD pushed up from 1.1585 to 1.1645,  Both are off those highs, currently 1.3430 and 1.1605 which puts GBPEUR around 1.1570, its highest level for ten days or so.  USDJPY is holding around 159.00, still no sign of intervention.

Fed minutes yesterday had a hawkish slant as members noted upside risks to inflation, plus warnings that inflation will take longer to return to target.  Incoming Fed chair Warsh is going to have a tough time if he is trying to turn the Fed dovish.  Trump may not be happy!

Aussie employment overnight was weaker than expected with drops in both full and part-time work, while the unemployment rate ticked higher to 4.5%, the highest level since 2021.  AUDUSD dipped from 0.7150 to 0.7100, GBPAUD rallied from 1.8790 to almost 1.8900.   Even AUDNZD dropped from around 1.2200 to 1.2140 as pricing of further RBA rate rises dropped, stronger NZ trade numbers had little impact on their release.

Elon Musk’s SpaceX will be raising some $75bn under plans to list some stock on Nasdaq.  The deal would value the firm at some $2trn.  The IPO would be the largest ever by a big margin, the previous record set by Saudi Aramco in 2019 which raised just under $30bn. 

Today brings PMIs from EU, UK and US.  We’ll hear from BoEs Bailey later this afternoon along with several other central bank officials.  UK retail sales will be released early tomorrow morning. 

Have a great day…

-  09.00 EU manufacturing, services PMIs

-  09.30 UK S&P manufacturing, services PMIs

-  13.00 BoEs Taylor speaks

-  13.30 US philly fed survey, initial jobless claims

-  14.45 US S&P manufacturing, services PMIs

-  15.00 EU consumer confidence

-  16.00 BoEs Bailey speaks

-  16.30 ECBs Elderson speaks

-  17.30 Feds Barkin speaks

-  23.45 NZ retail sales

-  00.01 UK GfK consumer confidence

-  00.30 Japan CPI

-  07.00 UK retail sales