Risk rallies into central bank week
We start the week with risk sentiment buoyed by an apparent breakthrough in the US/Iran standoff. A peace deal was declared “now complete,” with plans to reopen the Strait of Hormuz and lift the naval blockade upon signing. Oil reacted sharply lower on Friday, with WTI down 3.9% and Brent off close to 4%, easing a key inflation tail-risk into a heavy central bank calendar. The dollar fell overnight as Treasuries cheapened 3-4bp across the curve ahead of the signing.
US equities pushed higher into the deal, the S&P 500 up 0.5% to log its tenth winning week in eleven, the Dow up 0.7% on financials, and the Nasdaq up 0.3%.
In Europe, stocks rallied with the Stoxx 600 up 1.9% and core bourses up around 1.8%. UK April GDP contracted 0.1%, the first monthly decline since August, with services the drag.
Asia led the optimism on Friday. Korea’s Kospi surged 4.6% despite central bank caution on inflation, Japan’s Nikkei rose 2.8% on chips and metals, and Hong Kong’s Hang Seng gained 1.9% to snap a seven-session losing run. Mainland indices added around 1%.
Overnight, AUD/USD, NZD/USD, USD/SGD and USD/CNH were all flat. Dollar index down 0.1%.
Sentiment improves as USD/SGD hits more than a one-week low
University of Michigan sentiment for June rose to 48.9, up from 46. Meanwhile, both one-year and 5–10-year inflation expectations declined.
In Asia, USD/SGD trades about 1.8% above its 28 January low of 1.2586 and sits at more than a one-week low.
Support stands near the 50-day EMA at 1.2792, with the 100-day EMA close at 1.2791. The pair is currently at 57% of the past month’s range.
Meanwhile, EUR/SGD and SGD/CNH sit at one-week highs.
Central bank super-week
A packed monetary policy calendar takes center stage, with the Bank of Japan and Reserve Bank of Australia kicking off on Tuesday. The Federal Reserve headlines Thursday, where markets eye the FOMC’s upper and lower bound guidance, alongside the Bank of England. Any surprises could drive sharp moves across the dollar, yen, sterling, and Aussie.
Price data features prominently, with UK CPI on Wednesday the key European print ahead of the BoE. Japan’s national CPI closes the week on Friday, offering fresh context for the yen following the BOJ decision. These releases will shape expectations for the policy path ahead.
New Zealand’s first-quarter GDP lands Thursday, a critical gauge for the kiwi. China’s retail sales and industrial production on Tuesday provide an early read on regional demand, while US retail sales on Wednesday test the consumer’s resilience.
With the RBA, NZ GDP and China data clustered early to midweek, the Australian and New Zealand dollars face an event-heavy stretch likely to drive volatility.
Antipodeans rebound slightly on optimism
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 15 – 19 June
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
