2 Min Market Summary : 14th June 2019

As of Fri, Jun 14th, Singapore Time zone UTC+8

Dollar Index +0.01%, 97.01
USDJPY, -0.16%, $108.32
EURUSD, -0.12%, $1.1279
GBPUSD, -0.10%, $1.2680
USDCAD, -0.05%, $1.3327
AUDUSD, -0.25%, $0.6912
NZDUSD, -0.28%, $0.6557

U.S-Iran tensions escalated after two tankers were attacked in the Gulf Of Oman. Secretary of State Mike Pompeo on Thursday charged Iran with responsibility for the attack. Pompeo cited intelligence reports and the nature of the weapons used, most likely torpedoes, as evidence. In the last few months, the US has intensified its “maximum pressure” campaign meant to starve Iran’s economy, targeting the country’s oil exports in April. The Trump administration has also signaled its willingness to consider military force, with Bolton ordering updates to a military plan to send 120,000 troops to the Middle East should Iran attack US forces.

U.S. Treasuries advanced to session highs during Pompeo’s press conference. The 2-yr yield declined seven basis points to 1.82%, and the 10-yr yield declined four basis points to 2.09%. The U.S. Dollar Index increased 0.01% to 97.01.

In trade wars, Trump has ramped up pressure on Germany to scrap a gas pipeline from Russia and boost its defense spending, threatening to impose sanctions on the European ally and move American troops elsewhere if it doesn’t comply. “We’re looking at it,” Trump told reporters at the White House, referring to sanctions that might be levied if the Nord Stream 2 pipeline were to go ahead. Trump told reporters that the gas pipeline between Germany and Russia “really makes Germany a hostage of Russia if things ever happened that were bad.” The fear is that if Germany were to move ahead with the pipeline, it would allow Russia to easily cut off energy to Ukraine or pressure Western European nations.Trump is also threatening to cut American troops because “We’re protecting Germany from Russia, and Russia is getting billions and billions of dollars in money from Germany.” Deteriorating US-European relations would not be good for the Euro but at the same time, its unclear how serious the US is about imposing sanctions on Germany.

Australian data came in better than expected, but the currency sold off as the headline data hid the underlying slowdown in labor demand. Australian jobs printed at 42K vs 16K expected, but almost all of the gains came from the lower value part-time jobs, with full-time jobs only expanding by slightly more than 2K in May. The market read the news as a disappointment especially since the unemployment rate came in at 5.2% vs 5.1% expected.