Author: FX
Earnings season so far has come in better than expected and broadly supportive for equities, helping push major indices back toward record highs despite ongoing geopolitical uncertainty. Early reports show that roughly 80%–85% of S&P 500 companies have beaten earnings estimates, a strong beat rate by historical standards, with profits tracking toward double-digit growth of around 13%–16% year-over-year.The strength has been led by technology and AI-related companies, where demand and investment trends continue to surprise to the upside, while financials also started the season on solid footing. At the same time, energy companies have benefited from elevated oil prices tied…
The positive headlines around Iran continue to mount:Witkoff and Kushner headed to Pakistan on Saturday morning, according to the White House“We hope that positive developments will come from this meeting” Leavitt saidIran reached out an asked for an in person meetingVance will be standing by in the USEveryone will be on standby to fly to Pakistan if neededAxios also reported that Witkoff and Kushner would travel “in the coming days” but the details of that report were less encouraging. It says:The diplomatic efforts haven’t made any progress in recent days. The trip is an effort to break the stalemate and…
MUFG’s Derek Halpenny argues that the ongoing United States (US) blockade in the Strait of Hormuz is building a significant inflation shock for the US and globally, with Oil and input costs surging. He notes that President Trump’s strategy of squeezing Iran’s energy revenues is time‑consuming and politically costly, and expects rising inflation and global central bank responses to increasingly shape US Dollar performance.Blockade-driven price pressures and policy risk”The US blockade in the Strait of Hormuz continues with little sign of any progress toward another round of peace talks. President Trump has ordered the US navy to shoot at any…
USDJPY is pressing to fresh session lows, with sellers leaning on the pair and probing below the 100-hour moving average at 159.347. The move comes as US yields edge lower, with the 10-year down around 2 basis points to near 4.303%. While that dip offers some support for the downside in USDJPY, yields remain above the 4.30% level, which continues to act as a floor and limits the extent of the dollar’s decline. In other words, the rate backdrop is helping sellers at the margin, but it is not yet a full green light for a deeper move lower.At the…
Now there is some real smoke around the idea that there is division in the Iranian delegation.Iran state media reports that Ghalibaf is out for including nuclear in negotiations (translated):According to information received by Iran International, Mohammad Bagher Ghalibaf, head of the Islamic Republic’s negotiating delegation with U.S. representatives in Islamabad, has resigned and stepped down from membership in this delegation.Based on this information, Qalibaf has been reprimanded in the Islamic Republic for his efforts to include the nuclear energy issue as part of the negotiation axes with America, and has been forced to resign.According to Iran International’s information, the…
The Australian Dollar (AUD) posts marginal gains against the US Dollar (USD) on Friday, but remains near 10-day lows of 0.7110, with upside attempts capped below 0.7135 so far. A stronger US Dollar amid fading hopes of an imminent peace deal in Iran is keeping speculative traders away from the Aussie.Risk-sensitive assets like AUD are on their back foot on Friday, as tensions in the Middle East escalate. US President Trump urged Tehran to sign a peace deal, while Israel said that it is waiting for a “US green light” to restart its attacks on Iran.Tehran, on the other hand, has…
FUNDAMENTAL OVERVIEWUSD:The US dollar has been gradually strengthening since Tuesday as the US-Iran stalemate led to some profit-taking on bearish dollar bets. There’s still no clear sign of a second round of talks after Iran refused to send a delegation to Islamabad on Tuesday due to the US blockade in the Strait of Hormuz. The only good thing that is holding everything from puking hard is the ceasefire. Just today the Israel and Lebanon ceasefire got extended by another three weeks and the US-Iran ceasefire looks to be open-ended. In the meantime, everyone has been replenishing their military stockpiles, with…
Manufacturing is rebounding for the wrong reasons, services are slowing, and the dollar is the quiet winner in April’s PMI releases. Source link
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Commerzbank’s Michael Pfister discusses how US allies in Middle East and Asia are seeking Dollar swap lines as conflicts curb energy exports and tourism. He notes that US Treasuries held by these allies could be sold if liquidity tightens, and that Treasury-based support via the Exchange Stabilisation Fund may prove insufficient if the Iran conflict drags on, potentially challenging the Dollar over time.Swap line options and Dollar implications”On Wednesday, US Treasury Secretary Scott Bessent addressed US senators, noting that several allies from Asia and the Middle East had requested currency swap lines from the US government. The reason is likely…