The market spotlight remained on the Israel-Iran conflict and concerns about the ceasefire agreement being already violated.
Still, some improvements in sentiment propped U.S. equity indices higher while crude oil continued to return its recent gains.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- New Zealand Credit Card Spending YoY for May 2025: 2.2% (0.3% forecast; 0.5% previous)
- Germany Ifo Business Climate for June 2025: 88.4 (88.4 forecast; 87.5 previous)
- ECB official de Guindos says that underlying disinflation process has not been derailed at all
- ECB official Kazimir reiterated that they are at target when it comes to neutral interest rates
- U.K. CBI Industrial Trends Orders for June 2025: -33.0 (-32.0 forecast; -30.0 previous)
- Israel accused Iran of firing two missiles hours after the ceasefire began and threatened retaliation in Tehran
- Iran denied firing missiles after ceasefire, says those were the final salvo before agreement took effect
- Canada Manufacturing Sales for May 2025: -1.3% m/m (-0.4% m/m forecast; -2.8% m/m previous)
- Canada Consumer Price Index Growth Rate for May 2025: 0.6% m/m (0.4% m/m forecast; -0.1% m/m previous); 1.7% y/y (1.5% y/y forecast; 1.7% y/y previous)
- Canada Core Consumer Price Index Growth Rate for May 2025: 2.5% y/y (2.6% y/y forecast; 2.5% y/y previous); 0.6% m/m (0.6% m/m forecast; 0.5% m/m previous)
- Canada CPI Median for May 2025: 3.0% y/y (3.0% y/y forecast; 3.2% y/y previous)
- Fed official Bostic mentioned that he doesn’t see the need to cut rates now
- U.S. President Trump says he doesn’t think Iran violated the ceasefire, added he doesn’t think Israel will attack Iran
- U.S. Current Account for March 31, 2025: -450.2B (-450.0B forecast; -380.0B previous)
- U.S. S&P/Case-Shiller Home Price for April 2025: 0.8% m/m (0.8% m/m forecast; 1.1% m/m previous); 3.4% y/y (4.0% y/y forecast; 4.1% y/y previous)
- U.S. House Price Index for April 2025: -0.4% m/m (-0.1% m/m forecast; -0.1% m/m previous)
- U.S. Richmond Fed Manufacturing Index for June 2025: -7.0 (-7.0 forecast; -9.0 previous)
- Fed official Hammack cited that interest rates could stay on hold for quite some time
- ECB official Lane said that they have enough confidence that bringing inflation to target is largely complete
- Iran’s President stated that they will respect the ceasefire only if Israel does
- CB U.S. Consumer Confidence for June 2025: 93.0 (99.0 forecast; 98.0 previous)
- Fed head Powell projected that meaningful effects on inflation from tariffs can be felt by June to August, added there are many possible paths for the economy
- Fed official Williams warned that tariffs impact is likely to grow stronger in the coming months, economy to grow at a slower pace
- U.S. API Crude Oil Stock Change for June 20, 2025: -4.28M (-10.13M previous)
- New Zealand Balance of Trade for May 2025: 1.24B (1.2B forecast; 1.43B previous)
- New Zealand Exports for May 2025: 7.68B (7.84B previous)
- New Zealand Imports for May 2025: 6.44B (6.42B previous)
Broad Market Price Action:
Risk correlations were all over the place, as markets remained mostly anxious about Middle East tensions and ceasefire violations while also holding on to some optimism that the conflict will blow over soon.
WTI crude oil was particularly volatile, tossing and turning to headlines on additional Iranian missiles striking Israeli territory while the ceasefire was in place, followed by Trump’s remarks citing that he didn’t think Iran violated the terms of the agreement.
Gold reflected improving market sentiment, as the safe-haven precious metal continued to shed gains while investors appeared to find reprieve from “no news is good news” a.k.a. the lack of further escalation.
Meanwhile, Treasury yields and the dollar index turned lower after less upbeat remarks from Fed head Powell’s testimony, during which he pointed out that there are many possible paths the economy could take, and Fed official Williams who warned about potentially slower growth and higher inflation.
Bitcoin held on to the $105K level while markets enjoyed a bit of optimism while U.S. equities saw stronger gains on the prospect of Fed interest rates staying unchanged for much longer.
FX Market Behavior: U.S. Dollar vs. Majors:
The Greenback started the day off on bearish footing, particularly against higher-yielding currencies and the yen, as markets held on to “cautious optimism” surrounding geopolitical tensions. Dollar losses, however, were limited against the oil-related Loonie while the energy commodity continued to fluctuate.
Net positive inflation data from Canada led to a bit of a boost for its currency, as the results appeared to dampen the odds of further BOC easing in July.
After that, cautious commentary from Fed officials spurred another turn lower for the U.S. dollar, as Powell and Williams highlighted the possibility of stronger tariffs-related inflationary effects in the coming months while the economy could face weaker growth prospects.
By session’s end, the dollar closed lower across the board, most notably against safe-haven rivals JPY (-0.86%) and CHF (-0.91%) while paring some declines against AUD (-0.48%) and NZD (-0.50%).
Upcoming Potential Catalysts on the Economic Calendar
- Japan Leading Indicators Index at 5:00 am GMT
- France Consumer Confidence at 6:45 am GMT
- Swiss Economic Sentiment Index at 8:00 am GMT
- Swiss SNB Quarterly Bulletin at 1:00 pm GMT
- U.S. New Home Sales at 2:00 pm GMT
- U.S. Fed Chair Powell Testimony at 2:00 pm GMT
- U.S. EIA Crude Oil Stocks Change at 2:30 pm GMT
There’s not much on the docket for today in terms of top-tier economic releases, so dollar traders could turn their attention to Fed Chairperson Powell’s speech for policy-related commentary and his thoughts on how the latest round of market uncertainty could impact their rate outlook.
Apart from that, keep your eyes and ears peeled for geopolitical headlines and global trade updates that could push overall market sentiment around. As always, stay nimble and don’t forget to check out our Forex Correlation Calculator when taking any trades!
