- Brent crude broke above 108 USD a barrel, trading close to 110 USD intraday with gains above 5%, driven by escalating geopolitical risk in the Middle East.
- Israel struck Iran’s giant South Pars gas field, with Iraq reporting that gas flows from that direction have stopped; Iran launched a series of retaliatory attacks on the UAE, Saudi Arabia and Qatar, with Qatar reporting a fire at the Ras Laffan LNG hub.
- The Fed left rates unchanged but kept projections for cuts in 2026 and 2027, while the distribution of dots shifted; Powell warned in several hawkish remarks that if inflation fails to make further progress, cuts should not take place, and acknowledged the oil shock is hard to quantify and its longer‑term impact is uncertain.
- Powell noted that the risk of the next move being a hike has increased, even as he still treats the oil shock largely as a one‑off factor with uncertain consequences.
- Powell indicated he intends to remain as a Fed governor at least until the DOJ investigation is resolved.
- EURUSD dropped below 1.15 after Powell highlighted that fewer FOMC members now expect cuts and that they should not occur if inflation runs higher.
- Inflation projections were revised higher, but the overall trend remains downward.
- US PPI accelerated before the conflict, inflation remains stubbornly above target, and the labour market looks increasingly fragile (jobs growth has stalled with unemployment around 4.4%), raising stagflation risks.
- US100 and US500 fell by almost 1% on inflation fears and Powell’s hawkish tone, erasing a two‑day rebound on Wall Street.
- Micron, one of the key beneficiaries of higher memory prices, is set to report earnings after the US close.
- Optical names such as Applied Optoelectronics, Lumentum Holdings and Coherent rallied by more than 10% after a Los Angeles conference highlighted AI as a major growth driver for the sector.
- The crypto market sold off sharply on dollar strength and rising yields, with Bitcoin down more than 3% toward 71k USD.
- Rising inflation expectations weighed on precious metals: gold broke below 5,000 and then 4,900 USD (around -3%), while silver slid below 80 USD and is currently trading near 76 USD per ounce.
Central Banks in the Grip of an Oil Shock: Hawkish BoJ and Defensive Rate Decisions in Europe
Is GOLD reversing its upward trend due to oil? ❓ The sharpest declines since 2024 🚨📉
EURUSD: at a crossroads amid shifting central bank narratives 🪙⚔️
FOMC conference - Less members want cuts. EURUSD below 1.15
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