In the first half of June, Mexico’s inflation rate was reported at 0.1%, lower than the expected 0.12%. This indicates a slower increase in consumer prices during this period. In the currency markets, the EUR/USD has hit new highs of 1.1640, thanks to positive comments from the US Federal Reserve Chairman. At the same time, GBP/USD is trading above 1.3600, boosted by comments from the leaders of the UK and US central banks, which eased recession worries.

Gold And Bitcoin Prices Rise

Gold prices are nearing $3,300 due to reports of reduced tensions in the Middle East after a ceasefire between Iran and Israel. Bitcoin has stabilized around $105,000, gaining 4.33% as a result of this same ceasefire, creating a more optimistic global market outlook. There’s ongoing speculation about potential disruptions in the oil market because of tensions in the Strait of Hormuz. This important waterway is back in the spotlight due to rising geopolitical tensions between Israel and Iran. The lower-than-expected inflation figure from Mexico in early June shows a slowdown in consumer price growth. This cooling trend lowers the chances of aggressive interest rate hikes by the central bank and could shift capital flows toward higher-yielding currencies. Historically, inflation misses—especially on the downside—can signal a change in policy. So, if you’re interested in Latin American assets, particularly those sensitive to consumer price index (CPI) surprises, it’s a good time to rethink rate and foreign exchange (FX) expectations. Across the Atlantic, the euro has risen against the dollar, breaking through 1.1640 after remarks from Powell suggested possible changes in rate schedules. This positive tone encouraged a rise in major currencies. At the same time, the pound has strengthened, benefiting from comments by both Bailey and Powell that reduced fears of an economic downturn. Such statements can lead to rebalancing in FX markets, particularly in EUR/GBP and pairs tied to expected growth differences. We see a similar trend developing in the commodity safe-haven markets. Gold is nearing $3,300 per ounce. This rise reflects adjustments following a decrease in conflict between Iran and Israel. As military risks decline, safe-haven investments may retreat, allowing for shifts in capital. However, it’s important to remain aware of implied volatility in these markets. Historically, spikes in volatility following geopolitical events can correct themselves quickly, affecting options pricing.

Energy Markets And Rate Moves

Bitcoin remains just above $105,000—a level rarely seen in regular cycles. The 4.33% increase is mainly due to the return of regional calm. Unlike traditional assets, cryptocurrency reacts more swiftly to sentiment. However, once sentiment stabilizes, liquidity can tighten rapidly, leading to volatility retracing. Monitoring open interest across different contract months can show if this rally is sustainable or just a pause in selling. In energy markets, concerns linger over the Strait of Hormuz, which plays a critical role in global oil shipments. Renewed tensions here could quickly drive crude prices up. As a known geopolitical chokepoint, traders focusing on Brent and WTI spreads may reprice risks if naval or air confrontations arise again. While the past week offered some calm, the situation remains unresolved. Typically, there’s a risk premium attached to supply concerns from that area, and any military escalations or comments could increase that premium. As we think about positioning in the coming weeks, we should consider market expectations for interest rate changes, given the recent dovish or balanced policy communications. The skew remains a helpful indicator here, especially when comparing US and UK short-term contracts. In FX futures where we see a strong upward trend, it’s wise to proceed cautiously, as interest from real money can often be short-lived after soft CPI reports or easing tensions. We should think about hedging any future exposure where price responses may have diverged too much from fundamentals. While profits can still be made in these conditions, a sudden drop in volatility may cause strategies relying on divergence to underperform. It might be wise to revisit options strategies, particularly in markets where volatility is undervalued, especially in light of developments in the Middle East. The current signals are noteworthy, not because one event dictates the direction, but due to the multiple overlapping factors at play. Observe how quickly gold and crypto responded to the ceasefire news—it wasn’t coincidence. These asset classes are interconnected. So should we be. Create your live VT Markets account and start trading now.

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