Thursday: Oil Falls on Middle East Deal Hopes

Oil prices slumped more than 6% after news of a possible US‑Iran peace deal, sending Brent to roughly $104 a barrel and WTI down similarly. The rally in U.S. equities—S&P 500 and Nasdaq each up about 1%—was fueled by lower Treasury yields and a modest dip in gold. Analysts warn the market may not fully price in Middle‑East supply disruptions, meaning any rebound in crude could reignite inflation expectations and push rate‑cut timelines further into 2025.

In Australia, the April jobs report is under the RBA’s microscope. Forecasts show unemployment holding at 4.3% with 25,000 new jobs, but a gradual rise to 4.6% by early 2027 is expected as labour market slack emerges. The data will shape the central bank’s stance on monetary tightening. Meanwhile, Bank Indonesia took a decisive 50‑basis‑point hike to 5.25% to protect the rupiah, signaling a willingness to act aggressively amid volatile global backdrops. The Aussie dollar traded around $0.72 and the Kiwi near $0.59, reflecting modest strength against the U.S. dollar.

The yen’s ascent to roughly 159 per dollar appears capped, with analysts eyeing a “line in the sand” near 160. Rising JGB yields, driven by deficit‑related supply and higher commodity prices, support this ceiling. The Bank of Japan is expected to raise rates at its June meeting, bolstered by strong Q1 GDP and rising PPI. In China, policymakers left the 3% and 3.5% rates untouched for the 12th month, citing robust Q1 growth and concerns over bank profitability. Together, these dynamics illustrate a global monetary environment where geopolitical risk, commodity shocks, and divergent policy paths intersect.