Weekly Analysis

Global markets entered the week with investors focused on the upcoming US labor market report, which is expected to provide the next major signal for Federal Reserve policy. The US dollar remained near its highest level in more than a year after last week’s strong rally, supported by hawkish comments from Fed Chair Kevin Warsh and growing expectations of further monetary tightening. At the same time, renewed military clashes between the United States and Iran in the Strait of Hormuz briefly reignited inflation concerns before both sides agreed to suspend military action ahead of another round of peace talks in Doha.

Global financial markets faced a turbulent cross-current this week as sharp shifts in the US–Iran diplomatic track collided with hawkish monetary policy signals.

Global markets experienced a strong wave of risk-on sentiment this week following reports of an interim agreement between the US and Iran to halt their military conflict and reopen the Strait of Hormuz, where nearly 600 vessels are currently stranded. The peace deal, scheduled to be signed in Switzerland on Friday, establishes a 60-day window for talks regarding Iran’s nuclear program, offering immediate maritime ceasefire terms and partial sanctions relief on Iranian overseas oil sales.

Global markets started the week as investors reassessed interest rate expectations following a series of stronger US economic releases. Solid labor market data, rising job openings, and resilient employment figures strengthened the case for tighter monetary policy, lifting the US dollar and bond yields. At the same time, renewed tensions in the Middle East, including missile exchanges between Iran and Israel and ongoing disruptions near the Strait of Hormuz, kept energy markets on edge and maintained concerns about inflationary pressures.

Financial markets enter the first week of June with a cautious but calmer tone. The dollar stayed near a two-week low, while the euro and pound remained under pressure after a difficult May

Financial markets began the week on a firmer footing as signs of progress in US-Iran negotiations raised the possibility of reopening the Strait of Hormuz and reducing pressure on global energy supplies.

The dollar climbed to a six-week high, while the euro, pound, and yen weakened against growing expectations that central banks may keep rates higher for longer.

Global markets moved through another volatile week as investors balanced resilient US economic data against ongoing geopolitical uncertainty in the Middle East. The US dollar weakened further, falling below 98 and reaching a ten-week low despite stronger labor market figures. At the same time, fragile ceasefire conditions between the United States and Iran continued to shape energy markets, while tensions around the Strait of Hormuz remained a key source of inflation risk and market caution.