● Donald Trump received a briefing regarding potential bombing targets in Iran. The plan reportedly includes strikes on infrastructure, the seizure of the Strait of Hormuz, and the deployment of a special unit to secure enriched uranium.
● The RBA is expected to deliver its third consecutive interest rate hike next week due to further inflation growth prospects. Interestingly, Australian producer inflation (PPI) fell to 3.0% from 3.5% in the first quarter, but this is not expected to stall the rate hike.
● Conversely, New Zealand’s consumer confidence index fell to a 3-year low, nearing 2022 levels, driven by a 30% increase in fuel prices. The index hit 80.3, dropping 20 points over the last two months, and remains well below pre-pandemic levels.
● AUDNZD continues its upward trend, testing the 1.22 level. Based on movements from two decades ago and assuming further monetary divergence, the potential range for this move could reach 1.30–1.38.
● EURUSD is pulling back slightly today to 1.1720. Yesterday, Christine Lagarde signaled an open door for a June hike, though this will depend on data. Meanwhile, Morgan Stanley has pushed its expectations for a Fed hike to 2027. However, forecasting remains difficult until we see the first actions from Kevin Warsh.
● According to Deutsche Bank, gold prices could nearly double to $8000 per ounce due to strong demand from EM central banks. This target is set for the next 5 years. Interestingly, major buyers are expected to include Saudi Arabia, Qatar, the UAE, and Egypt. Gold purchases are linked to the ongoing dedollarization of global reserves.
● Gold is rebounding slightly at the end of the week, trading near $4600 per ounce.
● Brent crude is stabilizing after yesterday’s sharp movements related to the closing of the June futures contract. Today we see an opening at $111 per barrel, similar to yesterday and Wednesday’s close. WTI crude ultimately saw a clear pullback yesterday and is currently trading at $105 per barrel.
