Deal Eases Oil Risk (15-19 June 2026)

Reports of a US-Iran interim agreement to halt conflict and reopen the Strait of Hormuz improved global risk sentiment.

The deal is expected to be signed in Switzerland on Friday, including a ceasefire and partial sanctions relief for Iran's oil sales. In the US, sentiment improved as the University of Michigan index rose to 48.9, while inflation expectations eased across both 1-year and 5-year outlooks. These developments reduced oil-supply fears and lowered safe-haven demand for the dollar.

Central bank focus intensifies this week with the Federal Reserve meeting under Chair Kevin Warsh and an expected 25-basis-point interest rate hike from the Bank of Japan.

Currencies

Dollar Index (DXY): The US dollar weakened as hopes for a durable US-Iran ceasefire improved global risk sentiment. Lower crude oil prices and softer US Treasury yields reduced safe-haven demand for the greenback.
Euro: EUR/USD moved back above the key 1.1575–1.1600 resistance zone and traded near 1.1620 in early European hours. Sustained trading above this area could support further upside momentum.
Australian Dollar: AUD/USD rose above 0.7085, recovering from Friday’s close below 0.7050. The upward move was supported by stronger risk appetite and broad-based dollar weakness.
Japanese Yen: USD/JPY briefly fell below 160.00 but remained close to that level ahead of the Bank of Japan meeting. Markets expect a 25-basis-point rate hike, which would lift the policy rate to 1.00%, its highest level since 1995.

Commodities

Oil Slides as Hormuz Risk Eases

Oil prices fell sharply after the US and Iran reached an interim agreement aimed at ending the conflict and reopening the Strait of Hormuz. Brent crude traded near $83.50 per barrel as markets prepared for stranded tankers in the Persian Gulf to resume transit. Prices remain around $13 above pre-war levels, and further downside depends on how quickly supply routes normalize.

Gold Rebounds After Heavy Sell-Off

Gold and other hard assets rallied after the peace deal reduced energy-driven inflation fears. Lower oil prices also eased expectations for further rate hikes, supporting precious metals after last week’s sharp liquidation. For gold, the main technical barrier remains the 200-day moving average near $4,450, where a sustained break could trigger a stronger recovery.

Fixed Income

US 2-Year Treasury Yield: The yield moved lower on Monday as oil prices dropped sharply and markets grew more confident that the Iran ceasefire could hold. The yield traded around 5 basis points below Friday’s close, slipping under 4.03% and approaching the key 4.00% level.
US 10-Year Treasury Yield: The yield also declined by around 5 basis points, dipping below 4.43%. Lower oil prices eased inflation concerns and reduced expectations for aggressive Fed tightening.
Japan 2-Year JGB Yield: Japan’s yield fell about 1.5 basis points, moving below 1.40% as lower crude prices softened inflation pressure ahead of the Bank of Japan meeting.
Japan 10-Year JGB Yield: The yield dropped more than 5 basis points at one point to 2.56% before stabilizing near 2.58%. Markets still expect the BoJ to raise rates by 25 basis points to 1.00%, the highest level since 1995.

Economic Data

US Federal Reserve

The Fed will hold its first policy meeting under Chair Kevin Warsh. Rates are expected to stay unchanged, but markets will focus on whether the Fed signals a possible rate hike later this year amid renewed inflation pressure from energy prices.

US Economy

Retail sales, industrial production, housing data, trade prices, and regional manufacturing surveys will be closely watched. These releases will help markets assess whether the US economy remains resilient despite tighter financial conditions.

Asia Developments

China will release industrial production, retail sales, fixed-asset investment, unemployment, and housing data. In Japan, the BoJ is expected to raise rates to support the yen, while inflation, trade, and machinery orders will also be in focus.

Europe Outlook

The Bank of England is expected to keep rates steady. UK inflation, retail sales, and labor market data will guide expectations for future policy. Germany’s ZEW sentiment, Eurozone industrial production, and central bank decisions from Sweden, Switzerland, and Norway will also be monitored.

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