As expected, trading was particularly quiet, with razor-thin moves in the absence of US traders, taking an early break ahead of the July 4 Independence Day celebration (250th edition). No initiatives to report, for lack of macro catalysts or positioning by ECB members. The “$-Index” finished perfectly unchanged at 100.85, confirming its -0.5% decline over the past week.
The euro edges up +0.05% to 114.4, sterling +0.08% to 1.3355, and the yen is already slipping again (-0.2%) toward $161.35.
The most resilient currency this Friday is the yuan, up 0.12% against the dollar (6.7800) and +0.05% against the euro (7.7580).
The dollar’s pullback supported another advance in gold (+1.2% toward $4,175) and silver (+2.2% to $62.4, or +6% on the week).
With no data and no signals out of the US, traders’ attention is shifting to oil, whose price action will shape monetary expectations, with an alternative: a rate hike or a pause.
Brent regained $72 and WTI $68.75… but both remain sharply lower on the week, on the order of -2%.
Iran-US relations improved somewhat this week: Tehran will gain access to its assets frozen in Qatar to buy goods. In addition, the signatories approved the creation of a communications channel dedicated to identifying and reporting any potential violations of this protocol.
One of this week’s big paradoxes is that oil prices continued to ease sharply (down to around $70 on Brent on Thursday, a better level than before the war, and even than a week before the war), but bond yields, for their part, are not easing.
It is true that oil exports remain well below their pre-war levels, and it will be complicated to rebuild strategic and commercial reserves in a context of still-solid economic activity.
In this context, oil prices should settle around $75 to $80 a barrel over the coming year, keeping inflation on a higher path this year, but without posing a major challenge for central banks, notes the Swiss private bank.
