Back on the see-saw

Daily update

Oil prices moved to the lows of last Tuesday after a flurry of activity over the weekend. US President Trump called off military strikes against Iran—markets had not priced in military strikes anyway. An oil tanker then appeared to have been attacked near Oman. Trump then said talks with Iran would resume. Markets netted out these events and the optimism bias returned.
The yen has strengthened again after the US confirmed it intervened with Japan in support of the currency. Buying yen was not only on US Treasury Secretary Bessent’s “to do” list, it seems it was the only thing on Bessent’s “to do” list. The basics of currency intervention have not changed, however. Lasting support will come only if the weakness was the result of a speculative attack, or if the fundamental causes of the weakness are addressed through policy change.
Federal Reserve Chair Warsh is reportedly considering holding fewer Fed meetings. Some may consider this an unusual response to structural change, economic and political volatility, less reliable data, more fake news, and faster communication. It would reduce the number of blackout periods, allowing the views of important Fed members to be heard more often.
The data calendar is a barren wasteland, with no economically significant data.