Bank of America Global Research previews this week's June FOMC meeting.

This week's FOMC is one of the more highly anticipated meetings in some time. Not only is it the first under Chair Warsh, but it comes at a time when there's a reasonable case that the Fed's easing bias is likely to be removed. 

"In the FX market, there are 2-way risks to the USD going into the meeting. On one hand, a hawkish surprise seems more likely than a dovish one, given the contrast of the actual data flow with the already entrenched expectations of Warsh's dovish bias. This scenario could serve to further open the top end of Fed pricing distribution and allow the USD to more meaningfully test the top end of its well-established range.

On the other hand, despite Warsh's previously expressed views, the market is already priced for a full hike this year, and nearly an additional one next year. Should Warsh double-down on dovish arguments (see below), and/or if the SEP were to reflect a reluctance of the broader committee to lean hawkish, the USD could retreat further into its range," BofA adds.

(Adds slug) Sterling faces a mixed outlook in the near term as geopolitical optimism clashes with looming domestic political risks and a shifting monetary policy landscape. The pound nudged higher, rising to 1.3460 in Asia session trading, the high end of its recent range, propelled by a sharp improvement in broader market sentiment following the announced, but not yet signed, U.S.-Iran peace deal.

News of the agreement ignited a broad risk-on move. Oil prices fell nearly 5% after President Donald Trump said the Strait of Hormuz will reopen on Friday and that he has ordered an end to the U.S. blockade of Iranian ports.

The repricing compressed global yields, with UK gilt yields tracking U.S. Treasury yields lower, easing fiscal concerns in UK asset markets and lending the pound modest support.

However, domestic political risks, particularly challenges to Prime Minister Keir Starmer's leadership, are a major concern due to worries that it may result in a more free-spending government. Investors still remember the market turbulence caused by former PM Liz Truss's loose fiscal plans, which caused a sharp rise in gilt yields and a substantial GBP/USD selloff. With the Israel-Hezbollah component of the deal still fluid and the UK political landscape opaque, downside risks predominate despite Sunday's peace announcement — a view underscored by the limited rally in currency risk markets since Trump's statement.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research previews this week's June BoJ policy meeting.

"The BoJ looks set to hike by 25bp at its June meeting, continuing with its very gradual pace of tightening...Without a guide towards a faster pace of hikes, markets will remain most focused on the JPY-negative fundamentals of constrained monetary policy, higher-for-longer US yields, US growth outperformance, and domestic fiscal risks," GS notes.

"Overall, we continue to think that if our and market expectations for domestic monetary policy prove correct (i.e., only gradual tightening), it should have relatively limited impact on the Yen relative to the broader macro backdrop and US outlook, keeping the currency on the back-foot," GS adds.

Credit Agricole CIB Research establish a new recommendation to buy Gold.

"We  think that temporary factors related to the war in Iran and its impact on global energy prices have contributed to the recent sell-off in XAU. These factors should fade over time...We conclude that: XAU’s appeal as the ultimate debasement and risk aversion hedge is not necessarily lost. Gold could rebound again once the war in Iran starts to wind down," CACIB notes.

"We recommend buying XAU/USD at USD4338, targeting a bounce to USD5420 in the coming quarters," CACIB adds.

• Risk-on sentiment in place as US & Iran agree to halt war, open Strait of Hormuz

• USD safe-haven bid faded, US yields & oil

moved lower

• AUD/USD rallied away from 0.7036 overnight, pierced the 10-DMA, hit 0.7089

• The pair pulled back slightly, NY opened near 0.7075, was up +0.47% in early NY

• Gold , silver , stocks rallies helped AUD/USD hold onto gains

• AUD/USD's rally stalled near key resistance in the 0.7090-0.7110 zone

• Rising daily RSI, move above 10-DMA, daily cloud base give bulls some comfort

• Monthly RSI still falling & pair still below 21- & 55-DMAs; are concerns for bulls
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• Shares of copper miners rise premarket, tracking gains in prices of the red metal [MET/L]

• Benchmark copper on London Metal Exchange up 0.5% at $13,767 a ton, as of 0925 GMT

• Copper prices rise as a U.S.-Iran framework agreement to end their war and reopen the Strait of Hormuz eased energy-driven inflation fears and weakened U.S. dollar

• U.S.-listed shares of global mining giants Rio Tinto

up 1% and BHP Group rise 1.2%

• Miners Southern Copper and Freeport-McMoRan

each up 3.8%

• Canada's Hudbay Minerals jumps 4.8%, Ero Copper adds 3.2% and Teck Resources

up 4%

(Reporting by Pooja Menon in Bengaluru)

• U.S.-listed shares of gold miners up premarket, tracking rise in bullion prices [GOL/]

• Spot gold up 2.3% at $4,316.03 per ounce, hitting its highest level since June 9

• Gold prices rise more than 2% after U.S. and Iran officials said they reached an initial agreement to end their war, pushing oil prices lower and easing concerns about inflation and higher interest rates

• Top miners Newmont up 5.1%, Barrick Mining

rises 4%

• South African miners Gold Fields , Harmony Gold , AngloGold Ashanti and Sibanye Stillwater

gain between 8.1% and 10.2%

• Canadian miners Agnico Eagle Mines and Kinross Gold up 6.3% and 5.6%, respectively

(Reporting by Pooja Menon in Bengaluru)

• Markets almost unanimous at 97.3% that Reserve Bank Australia rates will remain unchanged at 4.35% Tuesday

• There's unlikely to be any related AUD/USD volatility according to FX option market pricing

• Overnight expiry implied volatility little changed around the recent 11.0 average - premium/break-even 32 USD pips

• Broader AUD/USD implied volatility is slower to ease than related peers - 1-month 7.35 to 8.25 last week and now 8.0

• AUD/USD is higher as the US/Iran deal weighs USD and risk appetite recovers - reaches new high since June 5 at 0.7088

• Close above 100-dma 0.7085 would aid bulls, but the thickening 0.7065-.7164 daily cloud is resistance

• Massive FX option expiry near the days high - A$1.6 billion 0.7075-85 strikes roll off at 10-am New York cut expiry

• Related - FX market may be underpricing BoJ risk to USD/JPY
AUD=D3 daily chart


Overnight expiry AUD/USD FX option implied volatility


AUD/USD FXO implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Overnight FX option expiry includes Tuesday's Bank of Japan policy decision but related USD/JPY premium is very low

• Overnight expiry USD/JPY implied volatility is 12.0 - a premium break even of 79 JPY pips in either direction

• According to Bank of America - 12.0 is 7.5 vols below the long term median average for BoJ pricing

• BoA also note that 12.0 is 0.5 below Aprils BoJ meeting price - itself the lowest price in 4-years (34 meetings)

• Broader JPY implied vol weighed by topside long gamma from 161-162 barriers/triggers and tight spot ranges of late

• US/Iran preliminary peace deal adding further weight as broader FX volatility risk premiums are reduced
Overnight expiry USD/JPY FX option implied volatility


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable rose to 1.3460 in Asia as safe-haven dollar weakened on US-Iran peace deal

• 1.3460 is the highest level since June 5 (1.3483 was high that day, pre-NFP data)

• Friday's NY session range was 1.3390-1.3423 (Thursday low was 1.3325)

• First Fed meeting chaired by Warsh this week (Tuesday-Wednesday)

• BoE rate hold expected this week. Bailey defends BoE decision to reduce gilt holdings

• CFTC data: net GBP short rose by 22% to 64,213 contracts in week to June 9

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• FX options expire at 10am New York/15:00 GMT on Monday June 15

• EUR/USD:1.1500 (8BLN), 1.1520-35 (3BLN), 1.1540-50 (1.4BLN), 1.1575-80 (1.4BLN), 1.1600 (1.6BLN)

• 1.1625-30 (1.7BLN), 1.1635-45 (518M)

• USD/CHF: 0.7945-50 (561M). EUR/CHF: 0.9190-0.9200 (1.5BLN)

• EUR/GBP: 0.8615 (500M), 0.8635 (160M). GBP/USD: 1.3360 (290M), 1.3450 (172M), 1.3550 (213M)

• AUD/USD: 0.7050-55 (940M), 0.7075-85 (1.6BLN), 0.7100 (221M), 0.7150 (445M)

• NZD/USD: 0.5825-30 (812M), 0.5850 (206M). USD/CAD: 1.3880 (553M)

• USD/JPY: 159.50 (722M), 159.90-160.00 (1.2BLN), 160.50 (301M), 160.75 (728M), 161.00 (810M)

• AUD/JPY: 112.00 (330M)(Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.6% Mon but extension constrained with RBA meeting underway

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• U.S.-Iran peace deal announcement invigorates bulls across markets

• Gold +2.5%, equities firmer as Brent crude plummets 4.8% in Asia

• AUD sellers towards 0.7121 55-DMA likely to cap topside run pre-RBA

• Range Asia 0.7036-885, support 0.6834, resistance 0.7121 0.7200 0.7283
AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• GBP/USD rises 0.25% in Asia as risk rallies on Iran peace deal

• U.S., Iran reach preliminary agreement to end war, signing set for Friday

• Trump says deal with Iran complete, authorises opening of Strait of Hormuz

• WTI crude -5.6%, S&P futures +1.1%, Nikkei +5.4%, U.S. 10-yr yield -6 bps

• GBP rallies to 1.3460 from a 1.3419 open, slips to 1.3435 as details sketchy

• Fed, BoE rates, UK May inflation, retail sales, April employment this week

• Makerfield election on June 18 key as UK political uncertainty rises

• UK losing jobs abroad due to high energy costs, manufacturers and union warn

• UK, Japan agree tech partnership and vow fighter jet progress

• Resistance 1.3470-80, 1.3500-10, support 1.3410-20, 1.3380, 1.3350

• Friday range 1.33835-1.3426, Asia 1.3419-1.3460
Latest UK gross domestic product (GDP) growth:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.2% from Mon 0.70885 high as initial impact from peace deal fades

• Peace deal announcement well received despite some conflicting claims

• Brent crude -3.9%, gold +2.0%, equities firmer on risk appetite uplift

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• AUD trading near upper hourly Bollinger band, progress higher tough pre-RBA

• Range Asia 0.7036-885, support 0.6834, resistance 0.7200 0.7283
AUD Hourly Bollinger Study & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Some pessimism towards US-Iran peace deal but USD/JPY heavy early Asia

• 160.15 early to 159.74, tracking away from 160.59 EBS high Thursday

• Crude oil prices off and market likely risk-on, JPY supportive?

• Technically, USD/JPY still holding around 159.98 daily Ichimoku tenkan

• Spot now below 160.01 hourly tenkan, 160.04-05 cloud, 160.06 kijun

• Next support below at 159.51 spike low Thursday

• In options, plenty of nearby expiries today to help contain action

• 159.00 $932 mln, 159.50-90 $1 bln, 160.00 $1 bln, 160.35-95 $1.8 bln

• JGB-US Treasury rate differentials tad narrower, 2s @265, 10s @182 bps

• BOJ policy announcement tomorrow, hike eyed, FOMC announcement Wednesday

• Market likely on tenterhooks ahead of these policy announcements

• Related comments , , ,

• Also , on US-Iran , ,

• US markets , , ,

• Post-deal crude , also ,
USD/JPY:


NYMEX crude oil futures:


JGB-US Treasury 2-year interest rate differential:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD +0.6% early Mon as U.S.-Iran peace deal agreement announced

• NZ May electronic card retail sales +1.7% m/m, +3.3% y/y

• Iran says its commitments take effect Fri, claims U.S. blockade ends Mon

• Trump & Pakistan PM Sharif jockey for headlines in wake of agreement

• NZD upswing slowing near 0.5865 55-DMA, break above may re-accelerate move

• Range NZ 0.5845-65, support 0.5680 5580, resistance 0.5990-95 0.6012
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.5% early Mon after announcements proclaim end of Iran conflict

• Pakistan Prime Minister Sharif says deal to be signed in Switzerland Fri

• Trump claims deal complete, Strait of Hormuz to reopen & blockade end

• RBA policy meeting outcome due Tue, no change to 4.35% OCR expected

• AUD flirting with 0.7080 resistance zone, will be tough to break ahead RBA

• Range Asia 0.7036-84, support 0.6834, resistance 0.7080 0.7200 0.7283
AUD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• NY opened near 1.1575 after EUR/UD rallied 1.1557-1.1590 in Europe's morning

• The pair fell early on firm USD, US yields & an upward move in oil

• 1.1560 was neared but the drop stalled, buyers then emerged as risk improved

• Hopes for the U.S. and Iran to sign a peace deal put a bid under riskier assets

• USD, US yields, oil moved downward while stocks, gold & silver rallied

• EUR/USD neared 1.1585 then sat near 1.1575 late, it was down -0.05% late

• A daily doji candle formed, suggests consolidation of gains off Thursday's low

• Falling RSIs, pair's hold below the 10- & 21-DMAs are concerns for EUR/USD bulls
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7044 after AUD/USD rallied during Europe's morning session

• The pair neared 0.7030 as USD, US yields & oil

moved upward

• AUD/USD then rallied on hopes a US-Iran peace deal will be signed

• USD, yields, oil softened while gold , silver , stocks rallied

• USD/CNH slid toward 6.7630 after rallying toward 6.7660 earleir in the session

• AUD/USD hit 0.7060 then neared 0.7050, it traded near flat late in the day

• A daily long legged doji formed which gives AUD/USD bulls some comfort
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• GBP$ near session high in NY afternoon, +0.01% at 1.3417; NY range 1.3423-1.3390

• Optimism over US-Iran deal lifting risk ex-USD; dollar steady awaiting details

• Pair continues to sled around the middle of the recent 1.33-1.35 range

• Peace will likely boost GBP/USD, gains likely tempered amid UK policy, political risks

• UK PM Starmer says he has not lost authority, will fight to stay in job

• Fed, BoE expected to hold next week; BoE to hold rates in 2026, minority see a hike

• GBP$ res at bruised 200-DMA by 1.3420, Friday high 1.3426, 1.3487 daily cloud top

• Supt 1.3383 Friday low, 1.3325 daily low 1.3325, 1.3298 lower 30-d Bolli

• Long tail in Thurs/Friday candlestick hints at growing support

Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research previews next week's June SNB meeting.

"We continue to expect the SNB to remain comfortably on hold at 0.0% at next week's meeting, in line with consensus and market pricing. We anticipate a slight upgrade to the conditional inflation forecast for 2026 and 2027, as the energy price shock now looks more persistent than in March. Further ahead we expect the policy rate to remain on hold," GS notes.

"We see risks tilted slightly towards hikes in case of a re-escalation or stronger pass-through into core inflation, in which case the SNB could build some policy space," GS adds.

The near-term outlook for sterling has reverted to caution as fluid geopolitical developments remain a top source of market uncertainty.

The recent rise in risk appetite following President Donald Trump's announcement regarding a potential U.S.-Iran deal had supported the pound, which rebounded from recent lows near the lower end of its 1.33-1.35 range, stabilizing around 1.34. However, confidence in an accord remains fragile. Iran's FARS news agency cited a source close to the negotiating team flatly dismissing reports of a Sunday signing ceremony in Geneva as false, which has tempered GBP/USD gains.

The reaction in the oil market, which rallied off session lows on the FARS news but remains down 2.5% on the day, underscores the link between oil prices and inflation expectations. Elevated oil prices have implications for UK and global inflation, and a swift resolution to the U.S.-Iran situation could help ease long-term inflationary pressures. This may provide the Bank of England with more leeway to adopt a dovish stance on interest rates, as Governor Andrew Bailey has indicated that the BoE is not in a rush to hike rates and is closely monitoring data for signs of second-round inflation effects.

Broader UK political and fiscal concerns also loom large, potentially capping any bullish momentum for GBP/USD above 1.35, especially as traders eye May highs in the mid-1.36s. Thus, while the short-term outlook for sterling is positive, significant headwinds remain.
GBP Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research discusses its USD bias into next week's June FOMC meeting.

"We stay bullish USD (vs. EUR & CAD) but recognize two-way risk heading into the FOMC meeting," BofA notes.

"We think a hawkish outcome is more likely, but Fed pricing & USD longs reflect this, making a dovish surprise the "pain trade". Warsh will be the focus but also the SEP projections - recent communication suggests the median FOMC view has turned hawkish. It would be a surprise if this does not translate to a meaningfully higher dot plot distribution," BofA adds.

• Cable hugs 1.3400 as it consolidates gains from 1.3325 (Thursday low)

• 1.3400 approximates to mid-point of the past week's 1.3307-1.3483 range

• Early NY session high was 1.3417 - which is also the 200-day moving average

• UK PM Starmer says he has not lost authority, will fight to stay in job

• Defence resignation exposes spending bind for Starmer - and any challengers

• Burnham set to challenge Starmer for Labour leadership, if he wins by-election

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)