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The US dollar is little changed versus the major currency pairs. In the video above I talk about the technicals given the recent price action, but there isn’t a lot of net movement versus yesterday’s close despite modest up and down.
The ECB rate decision to raise rates by 25 basis points as expected has done little to tilt the needle one way or the other.
Markets are still looking for the catalyst to give traders a more clear direction.
Middle East Overnight Summary
- The U.S. carried out another round of strikes overnight, targeting Iranian military infrastructure, including air-defense and surveillance sites.
- Iran responded with missile and drone attacks aimed at U.S.-aligned facilities in the region. Most were reportedly intercepted, limiting damage.
- Iranian officials said recent U.S. actions have undermined the ceasefire and warned of further retaliation if strikes continue.
- The Strait of Hormuz remains a key focus, with concerns about potential disruptions to global energy shipments, although commercial traffic continues to move through the region.
- Diplomatic efforts remain underway behind the scenes, with regional and international mediators continuing to push for de-escalation.
Crude oil is now lower
Oil prices after moving higher earlier in the session have reversed and are trading near the lows for the day down about -$1.17 at $88.86. The high price today reached $93.64. The low is at $88.63 so far.
Investors continue to monitor whether the conflict remains contained or broadens into a wider regional confrontation.
Markets are balancing the risks of further military escalation against hopes that diplomatic channels can prevent a larger conflict.
US stocks are high after yesterday’s meltdown
The US stocks are higher after yesterday’s sharp declines which saw the Dow fall -953 points or -1.87%, the S&P fall -119 points or -1.62% and the Nasdaq tumble -509.32 points or -1.98%. This morning the markets have recouped some of those declines with the futures implying:
- Dow industrial average of 385 points points
- S&P index up 54 points
- NASDAQ index up 340 points
In other markets:
- Bitcoin is trading up $1300 or 2.10% and 63,120
- Gold is up modestly my $15.70 or 0.38% at $4085.90. Yesterday the prices tumbled by -4.46%
- Silver is trading up $0.40 or 0.67% at $63.79 after yesterday’s nearly 3% decline
Today’s calendar is focused on PPI and jobless claims, coming one day after the as expected and somewhat CPI data ex energy.
For PPI, expectations are still elevated:
- Headline PPI YoY: expected 6.4% vs 6.0% prior
- Headline PPI MoM: expected 0.7% vs 1.4% prior
- Core PPI YoY: expected 5.4% vs 5.2% prior
- Core PPI MoM: expected 0.5% vs 1.0% prior
So while the monthly gains are expected to slow from April, the year-over-year readings are still alarmingly high. That makes today’s PPI important because it will show whether pipeline inflation pressures are easing, or whether price pressures remain sticky at the producer level.
On the labor side:
- Initial jobless claims: expected 219K vs 225K prior
- Continuing claims: expected 1.780M vs 1.777M prior
- 4-week average: prior 214.75K
Claims remain low by historical standards, suggesting the labor market is still holding up. A lower claims number would reinforce the view that employment remains resilient, while a jump in claims would point to some softening.
Canada will also release building permits, expected at -3.5% after a 10.3% gain previously.
Overall, after yesterday’s softer CPI, markets will be watching whether PPI confirms the inflation moderation story
