Ten Stories Moving the Market

U.S. President Donald Trump formally agreed an interim peace deal with Iran, shifting focus to the planned reopening of the Strait of Hormuz and a complex 60-day negotiating period over Tehran’s nuclear program – Bloomberg. (Why you should care – the signing should boost global oil supply, weighing on prices and inflation growth)

Three Saudi-flagged supertankers carrying 6 million barrels of crude sailed through the Strait of Hormuz, hours after U.S. President Donald Trump signed a deal with Iran to ​end the war that has disrupted global energy supplies – Reuters. (Why you should care – the average daily traffic through the Strait is roughly 18 million barrels per day)

The Bank of England held interest rates at 3.75% as it said the recent fall in oil prices was “encouraging,” even while two policymakers voted for an immediate quarter-point hike over concerns of persistent inflation – Bloomberg. (Why you should care – the BOE lowered its estimate for peak inflation from 3.6% to 3.3%, implying less of a need to raise rates if oil price keep falling)

Kevin Warsh used his first meeting as Federal Reserve chairman to put his stamp on how the central bank operates and communicates; he trimmed its policy statement, declined to submit a rate forecast of his own, and launched five task forces to study everything from how the Fed communicates to how it analyzes the economy – WSJ. (Why you should care – Warsh was adamant that the central bank is still focused on bringing down inflation growth)

The Swiss National Bank left interest rates unchanged while restating their willingness to intervene in currency markets given the strength in the Swiss franc; the decision suggests officials remain fearful of renewed pressure given the end of the Iran conflict – Bloomberg. (Why you should care – weakness in the Swiss franc could place upward pressure on the U.S. dollar)

Large U.S. banks on will formally pitch the Federal Reserve on tweaks to a proposal aimed at reducing the funds they must set aside to absorb potential losses, as the central bank enters the last leg of a marathon ‌overhaul of U.S. capital rules – Reuters. (Why you should care – reductions in capital banks’ buffers could help to free up more funds for lending and investment, boosting profits and revenue) 

Apple plans to raise prices on its products to offset the surging costs of memory and storage chips, according to Chief Executive Tim Cook; he declined to offer details on the timing or scale of the planned price increases, nor which products would be affected – WSJ. (Why you should care – the move could encourage other technology companies to do the same)

U.S. President Donald Trump said Intel will work alongside Apple to design and produce semiconductors domestically; Apple has held exploratory discussions about using Intel and Samsung Electronics to produce the main processors for its devices in the U.S. - Bloomberg. (Why you should care – Intel’s shares surged more than 9% in premarket trading)

Ireland’s central bank expects the country’s economy to contract this year after a surprisingly large drop in exports to the U.S. at the start of the year, having previously forecast a modest expansion – WSJ. (Why you should care – the slowdown is being driven by companies having stockpiled weight-loss drugs last year in anticipation of tariffs)

The U.S. government signed a $725 million conditional loan commitment ​with Energy Fuels to boost domestic processing ‌of rare earth elements as part of its efforts to reduce reliance on China – Reuters. (Why you should care – the company will expand its operations into rare earth ​separation and metallization, which is crucial for the ⁠production of permanent magnets)

Pre-Market Levels:

S&P Futures +0.60%, Nasdaq Futures +1.30%, Dow Jones Futures +0.18%, Russell 2000 Futures +0.82%

Europe:

EuroStoxx 50 -0.04%, UK FTSE -1.06%, German DAX -0.07%, French CAC -0.15%, Italian MIB -0.17%, Spanish IBEX -0.58%

Asia:

Japan's Nikkei +1.65%, Japan's TOPIX +1.60%, China's Shanghai Composite -0.43%, Hong Kong Hang Seng -1.59%, South Korea's KOSPI +2.25%, Taiwan's TSE +1.14%

Currencies:

Dollar +0.68%, Euro -0.41%, Japanese Yen -0.25%, British Pound -0.67%, Canadian Dollar -0.25%, Swedish Krona -0.96%, Swiss Franc -0.67%

Risk:

VIX -4.93%, Bitcoin -1.30%, Ethereum -1.19%

Growth:

WTI Crude -1.76%, Brent Crude -1.33%, Nat Gas -0.38%, Copper -2.03%

Safety:

Gold -2.76%, Silver -3.75%

Sovereign Bonds:

U.S. Treasury 10-yr yield -0.6bps at 4.457%

U.S. Treasury 2-yr yield +3.9bps at 4.202%

German 10-yr yield +0.9bps at 2.934%

French 10-yr yield +2.5bps at 3.688%

U.K. 10-yr yield +1.0bps at 4.763%

Japanese 10-yr yield -0.1bps at 2.621%

Economic Calendar:

Earnings: ACN, KFY, KR

U.K. - Unemployment Rate for April (2 a.m.)

Switzerland - Exports, Imports for May (2 a.m.)

ECB's Nagel (Germany) Speaks (3 a.m.)

Swiss National Bank Monetary Policy Announcement (3:30 a.m.)

Norges Bank (Norway) Monetary Policy Announcement (4 a.m.)

SNB's Schlegel Speaks (4:30 a.m.)

Bank of England Monetary Policy Announcement (7 a.m.)

BoE MPC Meeting Minutes (7 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

U.S. - Philadelphia Fed Manufacturing Index for June (8:30 a.m.)

Treasury Auctions $24 Billion in 5-Year TIPS (1 p.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - TIC Net Long-Term Transactions for April (4 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)

BOJ Monetary Policy Meeting Minutes (7:50 p.m.)

Japan - National CPI for May (7:50 p.m.)