Headlines:

• US and Iran know what the puzzle pieces are, but can they fit them all together?
• US futures continue to push up as investors stay more optimistic
• USD/JPY continues to nudge higher in testing Japan’s intervention limits
• Gold drops to two-month lows as precious metals struggle despite US-Iran optimism
• Fed’s Kashkari says far too soon to predict what the next policy move should be
• French consumer sentiment slumps further in May, falling to lowest since March 2023

Markets:

• WTI crude lower by 3.5% to $90.50
• DAX up 0.6% and CAC 40 up 0.9%
• S&P 500 futures up 0.3% on the day
• US dollar steady, little changed; AUD down after softer CPI data, NZD up on more hawkish RBNZ
• US 10-year yields down 1.6 bps to 4.475%
• Gold down 1.3% to $4,447

It was another session in waiting for the US and Iran to announce their supposedly imminent “deal to end the conflict”.

And once again, it serves as a good reminder that all of this is mainly angled to seeing both sides sign off on a memorandum of understanding to facilitate nuclear discussions next. Markets remain optimistic for the most part but we’ll have to watch for the details when said deal is announced at some point this week.

Oil prices continue to drop lower as equities extend the rally since the start of the week. WTI crude is down another 3.5% to $90.50 while European stocks look to end the month with a flourish. The DAX is up 0.6% and is closing in on record levels again with the CAC 40 up 0.9% to erase the drop from yesterday.

Looking to US futures, S&P 500 futures are up 0.3% with Nasdaq futures up 0.7% as tech shares continue the sizzling run this week in following up from the record closes yesterday. Up, up, and away.

Elsewhere, the dollar itself is lightly changed with not all too much to work with during the session. USD/JPY is up 0.1% to 159.40 with EUR/USD up 0.1% also to 1.1638 currently. The aussie is the laggard after a softer inflation data earlier in the day, with AUD/USD down 0.5% to 0.7130. Meanwhile, the kiwi is the lead gainer on a more hawkish RBNZ with NZD/USD up 0.8% to 0.5880 currently.

Besides that, precious metals were in focus too with gold dropping to fresh two-month lows on the day. More hawkish central bank bets are arguably a key factor in dragging down precious metals, with gold seen lower by over 1% to $4,447.

Will we finally see the US-Iran deal/memorandum of understanding officially announced later today?

This article was written by Justin Low at investinglive.com.