Markets continued to unwind positions tied to geopolitical tensions between Israel and Iran, spurring additional volatility for crude oil and risk assets.
In the forex market, a couple of top-tier inflation and central bank releases caused a bit of a stir, yet USD pairs moved mostly in sync to overall sentiment.
Here are headlines you may have missed in the last trading sessions!
Headlines:
- API: Crude oil inventories reduced by 4.27M barrels vs. expected draw of 0.8M barrels
- BOJ Summary of Opinions: Policymakers split on rate outlook given trade policy risks and stronger inflation
- Iran’s Foreign Minister confirmed that country’s nuclear program continues, reports show that nuclear capabilities still intact despite recent strikes
- Australia CPI for May 2025: 2.1% y/y (2.3% y/y forecast; 2.4% y/y previous)
- BOJ official Tamura talked about the possibility of “decisive” rate hikes despite trade uncertainty, as inflation is on track and somewhat stronger than expected
- Japan Leading Indicators Index for April 2025: 104.2 (103.4 forecast; 108.1 previous)
- Reuters report confirmed that Iran’s oil exports and shipments through Strait of Hormuz largely unaffected by latest strikes
- France Consumer Confidence for June 2025: 88.0 (87.0 forecast; 88.0 previous)
- Swiss Economic Sentiment Index for June 2025: -2.1 (-17.0 forecast; -22.0 previous)
- NATO leaders agreed to increase defense spending to 5% of GDP and renewed their “ironclad commitment” to mutual security in response to Russia
- U.S. Building Permits Final for May 2025: -2.0% m/m to 1.39M (-2.0% m/m forecast; -4.0% m/m previous)
- U.S. New Home Sales for May 2025: -13.7% m/m to 0.62M (-5.8% m/m forecast; 10.9% m/m previous)
- U.S. Fed Chair Powell mentioned that they are waiting to see how measured inflation turns out
- U.S. EIA Crude Oil Stocks Change for June 20, 2025: -5.84M (-11.47M previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
A hint of caution was still seen in market price action early in the day, although WTI crude oil found some support thanks to a larger than expected reduction in private oil stockpiles reported by the API.
The energy commodity crawled slowly higher during the Asian session, before the rally hit a peak when Reuters confirmed that Iran’s oil exports and shipments through the Strait of Hormuz were largely unaffected by the latest attacks, spurring an unwinding of the Iran war premium during London market hours.
The oil selloff hit a bottom right around the start of the U.S. session, possibly as the geopolitical spotlight shifted to Russia on reports that NATO agreed to increase its defense spending, with the rebound extended after the EIA also reported a steeper drop in inventories. However, oil wiped out its gains (and more) before the end of the day likely on sustained hopes that Iran and Israel would continue to follow their ceasefire agreement.
Meanwhile, safe-haven gold was slightly elevated early in the day while equity futures moved cautiously. Improvements in risk-taking during the London session spurred a turn lower for the precious metal while bitcoin managed a stronger climb back to the $108K area.
Treasury yields also edged higher then, possibly reflecting profit-taking from risk-off positions as traders dumped government bonds. U.S. equity indices were mixed, with the S&P 500 index and Nasdaq squeezing out some gains thanks to strength in chipmaker companies while the Dow dipped on weaker energy sector shares.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The U.S. dollar picked up on slight bearish vibes during the Asian session, with the yen drawing some support from hawkish BOJ commentary and the central bank’s meeting minutes suggesting a split on interest rate views amid tariffs uncertainty and strong inflation.
Australia’s CPI came in weaker than expected at 2.1% in May versus the 2.3% forecast and the previous 2.4% year-on-year gain, but this didn’t stop higher-yielders AUD and NZD from taking advantage of some risk-on flows during the session.
However, the U.S. currency staged a steady climb for the latter half of the session and throughout the London session, possibly unwinding previous day losses, with USD/JPY leading the climb before peaking around Fed head Powell’s speech.
During his testimony, Powell reiterated their wait-and-see approach, citing that they’d refrain from making policy changes until they get a better idea of how inflation is turning out, triggering some profit-taking from the dollar’s earlier rally. By session’s end, USD closed mostly lower but held on to gains against the yen (+0.25%) while limiting losses against CAD (-0.03%) and CHF (-0.10%).
Upcoming Potential Catalysts on the Economic Calendar
- Germany GfK Consumer Confidence at 6:00 am GMT
- BOE MPC member Breeden’s Speech at 8:30 am GMT
- ECB official Guindos’ Speech at 9:45 am GMT
- U.K. CBI Distributive Trades at 10:00 am GMT
- ECB official Schnabel’s Speech at 11:00 am GMT
- BOE Governor Bailey’s Speech at 11:00 am GMT
- Fed official Barkin’s Speech at 12:00 pm GMT
- Canada Average Weekly Earnings at 12:30 pm GMT
- Canada Wholesale Sales at 12:30 pm GMT
- U.S. Chicago Fed National Activity Index at 12:30 pm GMT
- U.S. Initial Jobless Claims at 12:30 pm GMT
- U.S. Durable Goods Orders at 12:30 pm GMT
- U.S. Retail & Wholesale Inventories at 12:30 pm GMT
- U.S. Final GDP Growth Rate at 12:30 pm GMT
- U.S. Goods Trade Balance at 12:30 pm GMT
- Fed official Hammack’s Speech at 1:00 pm GMT
- U.S. Pending Home Sales at 2:00 pm GMT
- U.S. Kansas Fed Manufacturing Index at 3:00 pm GMT
- Fed official Barr’s Speech at 5:15 pm GMT
- ECB President Lagarde’s Speech at 6:30 pm GMT
- U.S. Fed Balance Sheet at 8:30 pm GMT
- New Zealand ANZ Roy Morgan Consumer Confidence at 10:00 pm GMT
- Fed official Kashkari’s Speech at 11:00 pm GMT
- Japan Tokyo CPI at 11:30 pm GMT
- Japan Core CPI at 11:30 pm GMT
- Japan Unemployment Rate at 11:30 pm GMT
- Japan Retail Sales at 11:50 pm GMT
A couple of central bank heads (BOE Governor Bailey and ECB Chairperson Lagarde) are scheduled to give testimonies today, so keep your eyes and ears peeled for remarks related to monetary policy that could spur volatility for their respective currencies.
After that, we’ve got a few mid-tier data points from Uncle Sam (initial jobless claims, final GDP reading, and durable goods orders) that could also impact dollar direction. Before the session ends, look out for Japan’s data dump (Tokyo and national core CPI readings, unemployment rate, and retail sales) that could shake things up for yen pairs.
Apart from all that, stay on the lookout for geopolitical headlines and global trade updates that could push overall market sentiment around. Don’t forget to check out our Forex Correlation Calculator when taking any trades!
