Memorial Day (26-27 May, 2025)

Markets shifted toward risk-on sentiment as easing geopolitical tensions and uncertainty around Federal Reserve policy pressured the U.S. dollar. EUR/USD climbed toward 1.18, reaching multi-month highs, while sterling also advanced to a seven-week peak. 

Diplomatic negotiations between the United States and Iran ended without an agreement after more than 21 hours of discussions in Pakistan, marking another setback in efforts to ease pressure surrounding Iran’s nuclear program and regional role.

Global sentiment shifted this week as markets balanced high-stakes diplomacy in Islamabad with a severe energy supply squeeze. While talks between US and Iranian officials provided a fragile glimmer of hope, the US-led blockade of the Strait of Hormuz, triggered by a breakdown in weekend negotiations, sent Brent crude surging 8% to approximately $103/barrel.