0757 GMT – Gold extends losses as investors continue to respond to U.S. Federal Reserve officials’ more hawkish tone. A higher interest rate environment typically weighs on non-yielding assets like bullion. In early trading, New York futures are down 1.8% to $4,170.30 a troy ounce. “Gold is likely to remain under pressure in the near term as geopolitical risk premiums continue to fade and higher for longer interest rate expectations strengthen,” MUFG’s Soojin Kim writes. However, continued uncertainty around the pace of normalization for shipping through the Strait of Hormuz will limit downside risk for gold, the analyst says. ([email protected])
0733 GMT – Yields on U.K. government bonds climb following higher-than-expected public sector borrowing data and after Andy Burnham won a special election that could enable him to challenge Prime Minister Keir Starmer. U.K. public borrowing for May climbed to 23.3 billion pounds, 5.4 billion pounds higher than in May 2025. “Borrowing has got off to a terrible start to the fiscal year 2027,” Pantheon Macroeconomics’ Rob Wood says in a note. At the same time, Burnham’s victory increases both political and fiscal uncertainty. Markets are concerned that he would favor increased government spending. Ten-year gilt yields rise 6.5 basis points to last trade at 4.809%, Tradeweb data show. ([email protected])
0724 GMT – Bitcoin falls as the dollar rises on expectations the Federal Reserve will raise interest rates this year. The Fed on Wednesday left rates unchanged as expected but its projections pointed to the prospect of a rate rise by year-end. New Fed Chair Kevin Warsh also said policymakers were committed to bringing inflation down. The possibility of higher rates offsets the positive impact of the U.S.-Iran peace deal for cryptocurrencies as risky assets. Bitcoin drops 0.5% to $62,732, according to LSEG.([email protected])
0721 GMT – Eurozone government bond yields rise in opening trade, without any guidance from U.S. Treasurys where trade is closed due to the June Nineteenth holiday. While oil tanker traffic has apparently started in the Strait of Hormuz, U.S. Vice President JD Vance is no longer traveling to Switzerland for U.S.-Iran negotiations, even as the U.S. and Iran have already signed a Memorandum of Understanding. The 10-year Bund yield rises 3.7 basis points to 2.957%, according to Tradeweb. ([email protected])
0721 GMT – Japan’s consumer inflation could rise back above the central bank’s 2% target in the coming months, with price hikes expected to accelerate across broad categories such as food and daily essentials, says NLI Research Institute economist Taro Saito. Despite a drop in oil prices following the U.S.-Iran peace deal, a rise in consumer prices seems inevitable as producer costs have already climbed sharply, he says. Bank of Japan policymakers have warned of inflationary risks, saying Japanese firms have become more aggressive in passing on rising costs to consumers than in the past. ([email protected])
0713 GMT – The U.S.-Iran peace deal isn’t enough for central banks in the Philippines and Indonesia to halt tightening their monetary policies, says ING’s Deepali Bhargava in a note. Bangko Sentral ng Pilipinas’ policymakers aren’t complacent about oil prices, as they view the oil-price shock as potentially more persistent. “That argues for maintaining a tightening bias, with small, same-direction moves preferred to preserve policy credibility while limiting volatility,” the Asia-Pacific regional head of research says. Bank Indonesia’s move to lift its policy rate was unexpected, ING says. However, Bhargava notes that BI’s decision underscores a clear policy priority of stabilizing the weak rupiah. ([email protected])
0701 GMT – Yields on U.K. government bonds, or gilts, are likely to stay higher than yields on their developed-market peers due to worsening U.K. public finances, Quilter Cheviot’s Richard Carter says in a note. U.K. public sector net borrowing for May stood at 23.3 billion pounds, 5.6 billion pounds higher than the figures projected by the Office for Budget Responsibility. Government borrowing is higher than it was a year ago and bond markets are “uncomfortable with the level of borrowing and lack of spending cuts being proposed by this government”, Carter says. ([email protected])
0657 GMT – Sterling falls to an 11-week low against a stronger dollar but recovers against the euro even as the prospect of a leadership challenge for Prime Minister Keir Starmer increases. Andy Burnham won a crucial U.K. special election by a large majority, paving the way for him to challenge Starmer’s leadership. His victory was largely expected. This increases the risk of more fiscal spending, which is negative for sterling, Danske Bank analysts say in a note. Sterling falls to as low as $1.3160 while the euro falls 0.1% to 0.8669 pounds after reaching a one-month high of 0.8683 overnight, LSEG data show. ([email protected])
0649 GMT – The dollar rises to a one-year high against a basket of currencies, supported by expectations the Federal Reserve could raise interest rates this year. The Fed on Wednesday left rates unchanged as expected but its latest projections suggested a rate rise was possible by year-end. New Fed Chair Kevin Warsh also emphasized policymakers were committed to bringing inflation back to the 2% target. The recent decline in oil prices due to the U.S.-Iran interim peace deal has lowered rate expectations for most currencies but this doesn’t apply to the Fed, Commerzbank’s Volkmar Baur says in a note. Investments in AI continue to drive growth in the U.S., he says. The DXY dollar index rises to a high of 101.127. ([email protected])
0647 GMT – The Nikkei Stock Average rose 0.3% to close at a fresh record high of 71250.06 amid risk-on sentiment. The U.S.-Iran interim peace agreement “got ‘oil flowing’ and echoed positively across global markets, making investors forget about the previous day’s surprise hawkish Federal Reserve announcement,” Swissquote’s senior analyst Ipek Ozkardeskaya says in an email. Among top performers on Japan’s benchmark index, Fujikura jumped 15.7%, Furukawa Electric climbed 15.1%, and Kioxia Holdings advanced 12.1%. The dollar was at 161.36 yen, compared with 161.38 yen late Thursday in New York. The 10-year JGB yield was 3 bps higher at 2.645%. ([email protected])
0645 GMT – Japan’s headline consumer inflation is still running above the central bank’s 2% target when excluding government relief measures, BNP Paribas economists say. Government data released Friday showed the unadjusted figure remained below the 2% target in May. While gasoline prices are capped by government subsidies, increases in airfares and overseas package tours will begin to emerge in June and July, the economists say. Price increases are also expected to spread across plastic products like shopping bags and packaged foods, they add. ([email protected])
0638 GMT – Indonesia is still expected to retain its emerging market status by MSCI Inc., despite the index provider’s latest review, says Maybank Sekuritas’ Jeffrosenberg Chen Lim in an email. MSCI flags more concerns about Indonesia’s market, including the limited transparency of shareholding structures and indications of coordinated trading that undermines proper pricing. MSCI’s focus seems to have shifted from technical market access issues to trust and governance concerns, which are often more difficult and time-consuming to address. Even if Indonesia avoids a downgrade, it could remain under security until regulators show meaningful improvement in transparency, disclosure standards and market surveillance. ([email protected])