Commodities

Stoxx 600 +0.2% near 642.42 — on track to snap a four-week winning streak. EasyJet +13.4% on Apollo £5.7B takeover approach. ASML −2%, Soitec −2.8%, Siltronic −2% on AI-valuation caution. FTSE 100 flat near 10,472–10,489 still nursing AstraZeneca’s Wainua setback. US struck Bushehr province, Iran’s nuclear power plant home. Iran retaliated: Bahrain, Kuwait, Qatar, Jordan. Sterling 1.3430 — four-week high. Tether: Revolut delisting + £2.5B burn.

HIGHEST CONVICTION: Buy GBP/USD dips toward 1.3375, target 1.3460. BOE tightening bets (Pill dissented for a hike) + fading UK political risk (Burnham succession 20 July) + softer Dollar = three separate tailwinds.

Iran Struck Bushehr. No Sign of Cooling.

Markets had been hoping for de-escalation heading into Friday. Instead: US forces struck targets in Iran’s Bushehr province, home to the country’s nuclear power plant, and in other southern port cities. Iran retaliated with missile and drone fire on US-allied Bahrain, Kuwait, Qatar and Jordan, with sirens sounding across the Gulf. US officials say technical talks continue even as President Trump has said the ceasefire memorandum is over and warned of further strikes. This is not de-escalation. It is an active conflict with an open diplomatic channel running in parallel.

The market’s response is revealing: the Stoxx 600 is up 0.2%, not down. That tells you the equity market still treats this as a negotiating escalation that will eventually resolve, not a genuine war. But the confidence that underpins that view is getting thinner each day the strikes continue. Bushehr specifically changes the texture of the risk: striking near a nuclear power plant is a different category of escalation than striking port infrastructure.

US forces struck near Bushehr’s nuclear power plant. Iran hit four US-allied countries. The equity market is up 0.2%. That gap between what is happening and how markets are pricing...

Nikkei +2%, KOSPI +4%, Hang Seng +1.2-1.9% near 24,300 — best week in over a year. SK Hynix $26.5B US offering priced at $149. US official: Washington committed to negotiated Iran resolution. Yen at 161.52 on Finance Minister Katayama’s pension-fund push. Japan June PPI 7.1% YoY (vs 6.8% expected). Natural gas at six-week low $3.00 on Freeport LNG maintenance and 61 Bcf storage build. Bitcoin above $64,000. Hang Seng on track for best week in over a year.

HIGHEST CONVICTION: Buy the Hang Seng on dips toward 24,050, target 24,700. Chip rebound, robust IPO pipeline (Luxshare, Zhipu AI), and Iran-US de-escalation signal = a multi-pronged case, not a single-catalyst trade.

What Turned the Week Around

Three things happened in the space of twenty-four hours that changed the session’s entire character. First: a US official said late Thursday that Washington remains committed to a negotiated resolution with Iran, with technical talks continuing and regional mediators pushing to revive a nuclear deal. This is not a ceasefire. It is a signal that the negotiating channel is still open, and that is enough to take oil off its highs and restore risk appetite. Second: SK Hynix’s $26.5 billion US share offering priced at $149, drawing strong investor demand and sparking an overnight Wall Street tech rally that carried directly into Asian trade. Third: Finance Minister Satsuki Katayama signalled that Tokyo will explore measures to encourage the Government Pension Investment Fund and other public pension funds to substantially increase their domestic asset holdings. That alone moved the yen and JGB yields.

The result is a session where everything is working simultaneously: equities are up, the yen is firming, JGB yields are easing from a three-decade high, copper is breaking above its prior range high, and crypto is recovering. The risk is that all...

Currency & Commodity Analysis:

US Dollar Index

On Thursday, the US dollar index became the most crucial risk pricing vehicle in the forex market. Currently, the US dollar index is trading around 101, approaching its near one-year high. News reports indicate that the Iranian ceasefire agreement is under renewed pressure, escalating shipping security risks in the Strait of Hormuz and causing significant oil price volatility, with Brent crude briefly rising to around $79 per barrel. For the US dollar index, the energy shock is not simply a safe-haven story, but rather a simultaneous reassessment of three factors: inflation expectations, real interest rates, and pressure from non-US energy bills. The rise in the US dollar index does not equate to the market unilaterally pricing in a stronger US macroeconomy. More accurately, the current pricing focus is on whether the Federal Reserve can maintain restrictive interest rates. This means that the short-term elasticity of the US dollar index stems more from the "compression of interest rate cut expectations" or the "re-introduction of the tail risks of interest rate hikes," rather than from growth optimism.

Regarding existing home sales, May sales increased by 3.2% month-on-month, but the broader context is that housing activity remains low, and new home sales and starts also lack strong expansion. For the US dollar index, this creates a medium-term contradiction: geopolitical risks and oil prices are pushing up inflation expectations, supporting the dollar; weak housing inventories and sales are suppressing domestic demand expectations, weakening the dollar's fundamental elasticity. From a technical chart perspective, the US Dollar Index is trading above 100.62 (25-day moving average) and 100.61 (March 7 low), followed by 100.28 (June 18 low). The MACD histogram is at 0.0087, indicating positive momentum, but the expansion is not yet sufficient. The previous high of...

S&P 500 up 0.4% near 7,513 on SK Hynix US share offering demand and the AI/chip trade. US struck ~90 Iranian targets over two days. Iran retaliated by hitting ~85 US-linked military sites in Bahrain and Kuwait. 10Y Treasury toward 4.60% — 10-month high. 5Y at 4.33%. Fed hike probability for September repriced to ~70%. WTI consolidating near $74 after an 11% two-session surge. Bitcoin stuck at $62,850 with Fear & Greed at 22.

HIGHEST CONVICTION: Fade the US 5-year Treasury yield rise toward 4.40%. The hawkish repricing is oil-shock driven, not demand-driven. Oil shocks are historically less persistent for Fed policy than domestic wage and services inflation.

The Divergence That Defines the Session

Equities are up 0.4%. Bond yields are at 10-month highs. Both things are happening simultaneously and the reason they can is that they are responding to different inputs from the same Iran story. The equity market is buying the chip trade — SK Hynix’s US share offering drew strong demand, and that demand signal is rippling through every AI and semiconductor name on the board. The bond market is buying the inflation argument — the same Iran escalation that is producing the Hormuz risk premium is feeding directly into the rate-hike probability.

The US struck roughly 90 Iranian targets over two sessions. Iran retaliated by hitting approximately 85 US-linked military sites across Bahrain and Kuwait. President Trump declared the ceasefire MoU over. These are not conditions that typically produce equity rallies. The reason stocks are higher is that six of eleven S&P sectors closed positive on Wednesday even as the index fell, evidence that the rotation into chips is powerful enough to run against the macro headwind. Wednesday’s FOMC minutes — the first released under Chair Kevin Warsh — showed policymakers genuinely divided on further...

CAC 40 up 0.6%. DAX up 0.7%. ASML +2.6%, Infineon +3.1%, STMicro +3.7%. FTSE 100 in the red: AstraZeneca down over 9%, its worst day since 2017, after Wainua failed a late-stage cardiac trial. Bund 10Y easing to 3.06% from Wednesday’s two-month high of 3.10%. EUR/USD climbing toward 1.1450 — German trade surplus €19.1B (vs €14.5B prior). GBP/USD at a three-week high above 1.3400. Oil retreating nearly 2% to $73.10. Silver bouncing to $59.12 from Wednesday’s $57.22 low. Crypto holding losses: BTC near $62,300, Fear & Greed at 22.

HIGHEST CONVICTION: Fade the EU 5-year Bund yield rise toward 2.90%. The hawkish ECB repricing looks stretched relative to an oil shock that is potentially reversible if Qatar-mediated diplomacy gains traction.

Two Markets Inside One European Session

Thursday’s European session is a cautious rebound built on a fragile premise: that the Iran situation will de-escalate again, just as it did in June. The Stoxx 600 is up around 0.5%, led by semiconductor names — ASML up 2.6%, Infineon up 3.1%, STMicroelectronics up 3.7% — following strong investor demand for SK Hynix’s US share offering. France’s CAC 40 has recovered around 0.6% of Wednesday’s 2.2% slide. Germany’s DAX is up around 0.7%. The broader rally is happening on reports that Qatar is pressing Tehran to honour the existing memorandum of understanding and contain the escalation.

London is the session’s obvious exception. The FTSE 100 is in the red because AstraZeneca, its second-largest constituent, has plunged more than 9% — its steepest one-day fall since 2017 — after its gene-silencing drug Wainua, developed with Ionis Pharmaceuticals, failed a late-stage trial to prevent cardiac complications. One failed drug trial is erasing more index points than three European chipmakers are recovering.

The entire continental rebound rests on the assumption that Qatar’s mediation succeeds. Trump...

Trump declared the ceasefire MoU “over” and the US struck Iran for a second straight day. Brent is above $80 for the first time since June 22. The 10-year JGB yield is at its highest since September 1996. US Treasuries have added 10 basis points this week. The RBNZ hiked 25bp to 2.50% and signalled more. And Asia’s chipmakers are up 3–7% on a single Nvidia headline. Two completely different markets. Same session.

HIGHEST CONVICTION: USD/JPY is failing to track its own yield support near the 40-year peak. The pair eased 0.2% to 162.42 even as US 10-year yields climbed. Intervention risk and matching JGB yield rises are the explanation. This is a fade, not a chase.

The Oil Story That Is Breaking Bonds

President Trump declared the US-Iran ceasefire memorandum of understanding “over.” The US military launched fresh strikes on Iran for a second consecutive day, this time specifically targeting infrastructure that would help reopen the Strait of Hormuz. Brent crude cleared $80 per barrel for the first time since June 22, up roughly 9% on the week. WTI trades near $74.40. Trump said later he does not expect a return to full-scale war, which capped the initial panic, but the damage to inflation expectations was already done.

Fed funds futures now imply about 38 basis points of policy tightening this year, back to where pricing sat a week ago. Wednesday’s FOMC Minutes showed that a handful of participants already saw a case for raising rates in June before the committee agreed to hold. The oil-driven repricing is pulling Fed expectations back in a hawkish direction at the worst possible time for bond markets.

The 10-year JGB yield just hit its highest level since September 1996. Australia’s 10-year is at its highest since early June. The US 10-year...

Currency & Commodity Analysis:

US Dollar Index

The US dollar index remained below 101 on Monday, as last week's losses, weaker-than-expected US jobs data, and falling oil prices reduced traders' expectations for a Fed rate hike. Last week's data showed that U.S. nonfarm payrolls increased by only 57,000 in June, the smallest increase in four months and far below the forecast of 110,000, prompting the market to reduce bets on a September rate hike. Oil prices also fell slightly, with the resumption of energy flows in the Strait of Hormuz and the prospect of rising OPEC+ production raising concerns about potential oversupply. This helped alleviate inflationary pressures that had previously supported expectations of further rate hikes. Investors are now awaiting the minutes of the Fed's June policy meeting later this week for new clues about the interest rate outlook.

The dollar index has rebounded to just below 101. The current movement of the dollar index reflects a typical tug-of-war structure between "interest rate expectations support" and "weak economic data." The expectation of a continued tight policy from the Fed provides a bottom support for the dollar, but slowing employment and cooling inflation limit its upside. Overall, the dollar remains in a high-level consolidation structure, with short-term fluctuations mainly driven by the interplay between interest rate expectations and economic data. The dollar index is likely to remain in the 100.00–101.50 range. From a daily chart perspective, the US dollar index is maintaining an upward trend above the 100 level, with the overall trend still within a corrective rebound channel. The index has repeatedly tested and stabilized around 101, indicating some support and divergence between bulls and bears in this area. A break above this level is needed to correct the downward structure of this week; the first target...

Currency and Commodity Analysis:

US Dollar Index

The dollar index fell below 101 last week, after a sharp drop in the previous trading day, as weaker-than-expected U.S. labor market data lowered traders' expectations for a Federal Reserve rate hike this year. The U.S. economy added only 57,000 jobs in June, the lowest level in four months and well below the forecast of 110,000, while the unemployment rate was 4.2%. This echoed a report on Wednesday showing that private sector job growth also missed expectations. Fed funds futures now imply about a 50% probability of a September rate hike, down from 67% before the latest jobs report. Fed Chairman Kevin Warsh also said this week that inflation expectations are weakening, while reiterating the central bank's commitment to maintaining price stability. The dollar index is expected to end the week at a lower level, ending a two-week winning streak.

The dollar index fell 0.48% last week to close at 100.87, marking its biggest weekly drop since early April and its worst weekly performance in 12 weeks. The employment data aligned with the assessment that "policy will eventually shift and the dollar will weaken," and the dollar is expected to face further downside potential. Notably, the US Treasury market was closed on Friday for the Independence Day holiday, which amplified volatility in the thin trading of the foreign exchange market. Meanwhile, investors are seeking new signals to determine whether the dollar will continue to be under pressure next week. Following Thursday's weaker-than-expected US non-farm payroll report, the dollar is unlikely to enter a sustained downtrend. These data alone are insufficient to trigger a significant repricing of expectations for a Fed rate hike. The dollar index is expected to stabilize within the 100.0-101.500 range in the coming weeks.

Last week,...

USD/CAD 1.4200 (7-month high range). USD/CHF 0.8032 (off 1-yr high 0.8139). Gold $4,174.71 (+2.3%) off $3,972 8-month low. WTI $68.73 (−3.6%) lowest since Feb. Dow record 52,900. US 10Y 4.48% (+6bps). BTC $62,641.86 (+7%) off June’s worst monthly close in 4 years. XRP $1.131 (+8%). FOMC minutes Wednesday.

LEVEL

HEADING INTO THE WEEK

USD/CAD

1.4200

USD/CHF

0.8032

Gold XAU

$4,174.71

WTI Crude

$68.73

Dow Jones

52,900.00

US 10Y Yield

4.48%

Bitcoin BTC

$62,641.86

XRP

$1.131

The holiday-shortened week of 29 June to 3 July turned on a single pivot: Thursday's 57,000 NFP print against a roughly 115,000 forecast, with 74,000 in downward revisions to prior months, cut September Fed hike odds from roughly 64 to 67% to roughly 50%. That data landed against the backdrop of a genuinely hawkish-leaning Fed hold earlier in June, and Warsh's Sintra remark that inflation expectations have come down gave markets room to price a more balanced outlook. The Dow closed at a fresh record 52,900.00, up 2% as capital rotated into blue-chip industrials while AI-linked semiconductor names -- Micron, Applied Materials, AMD, Sandisk -- sold off sharply on valuation concerns. Gold rebounded from an eight-month low as fading hike bets restored its appeal. WTI fell to its lowest since February as Hormuz flows normalised. Bitcoin rebounded 7% off June's worst monthly close in four years. XRP reclaimed $1.10 on a $281 million short squeeze. Wednesday's FOMC minutes are the week's tie-breaker.

FOMC Minutes Wednesday: The Week’s Single Most Important Release

The US 10-year yield at 4.48%, the Dow's record run, gold's rebound, and the broad-dollar bid behind USD/CAD's seven-month high are all suspended between two competing signals. The Fed's June hold left roughly half of FOMC members projecting at least one more 2026 hike...

EUR/USD 1.1437 (+0.5% wk). GBP/USD 1.3350 (+1.0%). Silver $62.37 (+4.1%). Wheat $5.88/bu (+2.1%). FTSE 100 10,634 (+2.9%) near 52-week high 10,935. Germany 10Y 2.95% (+6bps). ETH $1,753 (−2.9%). LTC $43.15 (+4.5%). ECB Accounts Thursday. FOMC Minutes Wednesday.

LEVEL

HEADING INTO THE WEEK

EUR/USD

1.1437

GBP/USD

1.3350

Silver

$62.37

Wheat CBOT

$5.88/bu

FTSE 100

10,634

Germany 10Y

2.95%

Ethereum ETH

$1,753

Litecoin LTC

$43.15

The week of 29 June to 3 July in the European session turned on Thursday's 57,000 NFP miss against a 115,000 consensus, which cut September Fed hike odds from roughly 67% to roughly 50% and drove a broad dollar retreat. EUR/USD reclaimed $1.14 on dollar weakness, not ECB strength -- Eurozone CPI undershot at 2.8% headline and 2.4% core, and Lagarde at Sintra described inflation and growth risks as more balanced, marking a clear softening from the hawkish June rate hike tone. GBP/USD reached a two-week high on the same dollar move, even as Bailey flagged a slowing economy without signalling imminent cuts. Silver rebounded sharply off seven-month lows. The FTSE 100 surged 2.9%, led by AstraZeneca, GSK, BAE Systems, and Babcock into a defensive-led rotation that insulated London from a global tech selloff. The week of 6 to 10 July asks whether this dollar-driven relief rally extends or fades as ECB Accounts, FOMC minutes, and UK political transition headlines take over.

EUR/USD at 1.1437: The ECB Accounts Are Thursday’s Gate

EUR/USD at 1.1437 sits roughly in the middle of its 2026 trading range -- above June's low of 1.1354 but well below January's high above 1.20. The analytical distinction the article makes explicit: the recovery was driven by broad US dollar weakness, not ECB hawkishness. Wednesday's Eurozone CPI came in below forecast at 2.8% headline and...