Macro Wrap

The major US equity indexes posted gains on Tue as oil prices fell on optimism of the ceasefire between Iran and Israel. The Dow Jones Industrial Average added 507.24 points (+1.19%) to close at 43,089.02. The S&P 500 gained 67.01 points (+1.11%) to settle at 6,092.18. The Nasdaq Composite climbed 281.57 points (+1.43%) to end at 19,912.54. The 10-year Treasury yield was down about 3 bps at 4.29%, while the 2-year yield lost around 1.4 bps to 3.81%. The 30-year shed 2.7 bps to 4.83%. The US dollar was broadly lower on Tue, with the US Dollar Index (DXY) falling 0.57% towards 97.86. EUR/USD gained 0.28%, closing at 1.1608.

US Fed Powell said inflation could come in weaker than expected, which would support an earlier rate cut. However, if inflation or labour market strength persists, that could delay any rate cuts. sentimentally positive for USD.

Germany’s ifo business climate index rose 0.9pts in June to a thirteen-month high of 88.4. The assessment of the current situation was little changed broadly in line with the average level since the start of 2024, but the future business expectation index rose 1.7pts to 90.7, only a touch below the highest point seen after the pandemic. Positive for base metals and Euro.

US crude oil settled down 6% at $64.37/bbl, while the global benchmark Brent fell 6.1%, to $67.14/bbl. Gold prices declined to an over two-week low, as the announcement of a ceasefire between Iran and Israel dented safe-haven demand for bullion. Spot gold fell 1.5% to $3,316.80/oz, after earlier dropping over 2% to its lowest level since 9 Jun. US gold futures settled 1.8% lower at $3,333.90/oz

Economic calendar –, Us New Home Sales, Fed Chair Powell Testimony.