Overview
- Reports that Iran stopped ceasefire talks with the U.S. and that the U.S. carried out strikes over the weekend sparked a more than 5% jump in crude oil, which lifted 10-year Treasury yields and supported demand for the dollar.
- The dollar index was steady-to-higher on Monday as investors moved into assets viewed as safer and priced greater odds of Fed tightening in response to higher energy-driven inflation risks.
- Major currency pairs remain technically constrained, with EURUSD trading inside a tight 1.1576–1.1669 band and clusters of hourly and daily moving averages limiting follow-through in either direction.
- Near-term market direction now hinges on the U.S. employment report and central-bank speeches, including comments from Federal Reserve officials and the Bank of Japan governor, which will shape rate expectations before mid-June policy meetings.
- Because the Strait of Hormuz channels a large share of world oil flows, any change to shipping there can push energy costs, widen inflation pressures and alter borrowing-cost expectations for households and businesses worldwide.