Most of the world’s major central bankers will be lacing up their boots for a pivotal round of policy meetings, headlined by a managerial debut at the FederalReserve. Iran war peace talks are also heading deep into extra time, although signs of progress there means that there is a plausible chance that we see an agreement upon a framework peace deal as soon as this month. Pressure on UK prime minister Starmer could also intensify should GreaterManchester mayor Andy Burnham triumph at the Makerfield by-election, which would put him firmly through on goal for the Labour leadership role.
Football puns out of the way,last month saw a broad recovery in risk appetite, as markets opted to take a glass half full view on the latest Iran war headlines. Equity markets have been trading as if the war never even happened, the safe haven dollar has lost ground against most of its major peers, and bond yields have retreated amid esing concerns over runaway inflation and aggressive tightening cycles. Oil prices are continuing to account for a fairly significant Iran war risk premium, which is logical given that traffic through the Strait ofHormuz remains at near as damn it zero, although even here we’ve seen a marked retreat.
Explore the full June FX market outlook here.
