• Iran’s frozen funds emerge as potential final sticking point in US-Iran deal
• UK CBI shows retailers sentiment fell at a slower pace compared to previous two quarters
• Japan government retains its assessment that the economy is recovering moderately in May
• ECB policymaker Lane hints the market is correct in expecting a rate hike in June
• Oil prices nudge up from overnight lows awaiting further US-Iran developments
• Indian Rupee recovers losses on lower oil prices, but risks remain on prolonged stalemate
• Iran’s IRGC identifies hostile aircrafts entering its airspace, downs MQ9 drone
• FX option expiries for 26 May 10am New York cut
• USD/JPY remains stuck in a tight range amid US-Iran deal optimism and hawkish Fed risk
• Markets reserve some caution on US-Iran developments
• What are the main events for today?
• ECB policymaker Schnabel says that a June rate hike will be needed
• Crude oil futures plunge nearly 5%: What this oil analysis is guiding next

It’s been a pretty calm session in terms of news and data releases. ECB policymakers confirmed market expectations of an interest rate hike in June but fell short from signalling the need for further hikes unless the data supported such a move over the summer.

We got again some skirmish between US and Iran as the Iran’s IRGC announced it had detected and shot down an MQ-9 drone. The IRGC said also in a statement that it has the right to respond to any US ceasefire breach. This followed the maritime clash tonight where the US Central Command (CENTCOM) confirmed that American forces sank two IRGC mine-laying speedboats in the Strait of Hormuz and subsequently struck an active missile site at Bandar Abbas.

Lastly, according to Iran’s Fars news agency, the unfreezing of billions of dollars in Iranian assets has emerged as the final obstacle to securing a Memorandum of Understanding (MoU) aimed at ending recent hostilities and reopening the Strait of Hormuz. This issue is currently being ironed out through Qatari mediation.The fact that the debate has shifted from whether Iran will cooperate on its nuclear material to how and when Iran gets its money back could be viewed as a net-positive signal.

In the markets, we basically just ranged through the entire session, with very small changes from the Asian session.

This article was written by Giuseppe Dellamotta at investinglive.com.