The USD eases, oil prices weaken, equity markets are mixed, and US yields ease as the Lebanon ceasefire improves optimism about Iran. The U.S. dollar index eased modestly in early trading but remained near a two-month high as renewed hostilities in the Gulf continued to support safe-haven demand for the greenback. Investors are also focused on upcoming U.S. labour market data, with resilient economic indicators and persistent inflation pressures reinforcing expectations that the Federal Reserve will keep interest rates higher for longer. Global equity markets were mixed in early trading, with U.S. futures retreating after Broadcom's disappointing outlook raised concerns that the recent AI-driven rally in technology stocks may have become overstretched. Asian markets were generally weaker, led by losses in semiconductor shares, while European equities were little changed as investors balanced technology sector concerns against ongoing geopolitical uncertainty in the Middle East. Elsewhere, oil and bitcoin prices weakened as investors assessed the outlook for global growth and risk appetite. Gold prices firmed modestly, supported by ongoing geopolitical uncertainty and safe-haven demand. Focus today will be on BoE Governor Bailey's speech, alongside US Initial Jobless Claims, which will help provide direction for currency markets.
News Headlines. S&P 500 futures fall after the index snaps a 9-day winning streak amid rising tensions in the Middle East. SpaceX targets a $135 IPO price at a $1.77 trillion valuation. Israel and Lebanon agree to implement a ceasefire. Republican-led House deals blow to Trump over Iran war. Russia could use drone edge to threaten Baltics, warns Latvian general. Trump's Iran war drains US oil stocks to the lowest level since 2024. Taiwan beefs up anti-ship missile arsenal to counter threat of Chinese invasion. Ontario records steepest drop in labour force since 1976, excluding the pandemic.
In currency markets. Against the USD, the South African rand strengthened as improving risk sentiment and firm commodity prices supported emerging-market currencies. Meanwhile, the Japanese yen remained under pressure near the key ¥160 per dollar level, with traders staying alert for possible intervention from Japanese authorities should further weakness emerge.
In commodity markets. Oil prices weakened 1.2%. Natural Gas prices strengthened 1%. Gold prices advanced 0.75%. Silver, Coffee & Wheat prices are flat. Copper prices firmed 0.15%, while Soybean prices fell 0.4%.
CAD holds near two-month lows in early trading, continuing to underperform its G10 peers as investors weighed the impact of Canada's recession-confirming GDP data, escalating global trade tensions, and renewed hostilities in the Middle East. Although higher oil prices offered some support, uncertainty surrounding proposed U.S. tariffs, the upcoming CUSMA review, and expectations that the Bank of Canada will remain on hold continue to weigh on sentiment toward the loonie.
EURCAD extended its advance to fresh multi-month highs in early trading, breaking through the 1.6150 level as expectations for further ECB tightening continued to support the euro. Meanwhile, the Canadian dollar remained under pressure near two-month lows amid weak domestic growth, trade uncertainty ahead of the CUSMA review, and expectations that the Bank of Canada will remain on hold. With monetary policy divergence widening between the ECB and BoC, the cross appears biased toward further gains in the near term.
EUR held steady in early trading as expectations for an ECB rate hike later this month continued to support the single currency. However, gains remained limited by ongoing uncertainty surrounding U.S.-Iran negotiations and expectations that the Federal Reserve will maintain a restrictive policy stance. Investors are now focused on today's U.S. jobless claims data ahead of Friday's closely watched non-farm payrolls report.
GBPEUR eased in early trading as cautious market sentiment and lingering uncertainty surrounding U.S.-Iran negotiations supported demand for the euro. Stronger-than-expected Eurozone retail sales data, which rose 1.0% year-on-year in April, provided additional support to the single currency. Investors now await comments from Bank of England Governor Andrew Bailey for fresh direction.
GBP edged higher in early trading as the U.S. dollar eased following news of a ceasefire agreement between Israel and Lebanon. However, gains in sterling remained limited as renewed hostilities in the Gulf and stalled U.S.-Iran negotiations continued to support the broader U.S. dollar outlook. Investors are now focused on today's U.S. jobless claims data, Friday's non-farm payrolls report, and an upcoming speech from Bank of England Governor Andrew Bailey for further direction.
Payments International Inc. payment and foreign exchange services are provided by Global Currency Exchange Network Ltd. T/A GC Partners. Global Currency Exchange Network Ltd. is authorised and regulated by the Financial Conduct Authority under the Payment Services Regulations, 2017 (FRN: 504346). Registered as a Money Services Business, supervised by HM Revenue & Customs (“HMRC”) under the Money Laundering Regulations 2017. (Registered number is 12137189). Registered in England and Wales, company number 04675786. Registered office: 85 London Wall, London, EC2M 7AD.
