Macro update
Yen hovers near a 40-year low as intervention risks mount: The Japanese currency weakened to 161.81 per dollar overnight, its lowest level since July 2024 and close to the 1986 trough, with finance officials reiterating their willingness to counter speculative moves as thin market liquidity raises the possibility of intervention similar to the ¥11.7 trillion operations seen in April and May.
US markets closed for the Juneteenth holiday: American financial markets are shut in observance of the federal holiday, leaving cash Treasury markets closed and contributing to lighter trading volumes across global markets.
Federal Reserve outlook continues to support the dollar: Hawkish messaging from new Fed Chair Kevin Warsh lifted the dollar index to a 13-month high, widening yield differentials with Japan and reinforcing demand for yen-funded carry trades.
US-Iran negotiations stall as scheduled talks are cancelled: Vice President JD Vance withdrew from planned discussions in Switzerland, with the Swiss foreign ministry confirming the talks would not proceed, while Israeli military operations in southern Lebanon continued overnight.
Oil prices recover as doubts emerge over the peace process: Brent crude climbed back above $80 a barrel and WTI rose into the $76-$77 range after the collapse of the planned talks cast fresh uncertainty over the durability of the US-Iran agreement, reversing part of the week’s earlier decline.
Burnham victory reshapes the UK political landscape: Andy Burnham’s by-election win in Makerfield is seen as removing a significant obstacle to a potential Labour leadership challenge to Prime Minister Keir Starmer.