5th June - Deal Still Unsigned

Geopolitics

We saw another day yesterday where the pattern of strikes and talks continued. There were 'defensive strikes' in southern Iran, while the US was claiming that a deal could still be reached over the weekend. Iranian President Pezeshkian reportedly confirmed no deal would be confirmed without the approval of Supreme Leader Khamenei, a potential roadblock as he has issued directives in the past confirming he is not willing to surrender Iran's enriched uranium. This remains one of the key sticking points in negotiations, and one that will need to be resolved before any deal can be reached. The markets are still pricing in a deal being reached, but unless we see movement on each side's red lines, it seems likely we will be in the current standoff for a while yet.

Forex

Yesterday the USD saw some minor losses on the day, with the DXY initially falling to 99.190 before recovering to close the day at 99.440. There looked to be some movement towards European and risk-on assets in the morning, before a recovery later in the day seemingly based on a more technical reaction, with bulls encouraged to step in and bid the dollar at a better price than they had seen in the morning. The dollar ended only slightly down, as the broader markets still wait for more information from Iran and the ongoing negotiations.

DXY - 4H

This movement was seen across all USD pairs, including the USD/JPY, which is still hovering just below the key 160.000 level. Should we see some more USD strength today and over the weekend, we could then see intervention from the BoJ at any point. It remains the market to watch over the next few business days.

The CHF reclaimed some ground yesterday after a few days of weakness. It has a lot of recent fundamental data giving it backing, and at one point earlier in 2026, it was at an 11-year high against the USD. Recent drops were thanks to a larger risk-on move in markets, but yesterday's lack of news seemed to give the CHF the chance to show off its fundamental backing. Should we see a continued stalemate in Iran or even a deterioration, we could see the CHF continue to recover ground lost since the start of the year.

USD/CHF - 1D

The commodity currencies continued to mirror their commodities, with CAD struggling on a day when oil prices fell, while AUD & NZD gained ground on a day when precious metals gained ground. Fundamentals from these markets will be worth looking out for, while there is so much uncertainty around the Iran negotiations, the commodities they are related to will continue to be a large factor in the movement of these currencies.

Indices

Yesterday was a fascinating day for indices. The Dow Jones made back all of its Wednesday losses to post a new all-time high of 51,685, while the Nasdaq closed slightly lower on the day overall with a loss of 0.15%. The Nikkei also fell on the day, while the S&P 500 gained back ground but not as much as the Dow.

This was caused by a continuation of something we had seen recently, a move on days like this from growth to value. Stocks such as UnitedHealth, Goldman Sachs, JP Morgan, Visa, and Johnson & Johnson all had good days; all are well-established names and none are tech stocks. Yesterday could have been an indication of what a healthy rotation might look like, with money moving from AI and tech stocks to more established stocks as opposed to being removed from the market altogether. Whether this is a longer trend or whether it is a one-off for yesterday is something to watch out for, and could guide our opinion on whether a hit to the tech sector would cause a dramatic crash or a smaller correction.

US30 - 1D

NAS100 - 1D

Precious Metals

Gold and silver recovered some losses on the day, driven in part by lower oil prices throughout the day. The analysis still stays the same; the medium-term likely direction is lower prices as rate hikes remain likely. The nearest event that could change this is the NFP today, which will have a large impact on the expected direction the FOMC will take. A strong NFP number will continue the rate hike narrative, while a weak number could start to turn the tide in favor of the precious metals. It is a key figure and one that will be focused on by the market.

Today's Market Drivers

• Iran - It will continue to dominate markets; the noises we hear going into the weekend will affect how capital is invested while the markets are closed.

• NFP, 1:30 pm UK time - This is a key release for the US economy and markets as a whole; a surprise in either direction could cause significant movement in most markets.

• CAD Unemployment, 1:30 pm UK time - An important figure for the CAD, but outside that, this event will likely not affect other markets too much. NFP remains the key release.