Week Preview: Are the Dollar and Equities Set for a Pullback?

Market Trends Influenced by Global Developments

Investor confidence was boosted by advancements in US-Iran talks and the establishment of a ceasefire between Israel and Lebanon. As a result, both the S&P 500 and Nasdaq in the United States achieved unprecedented highs, continuing their upward momentum over several weeks.

Meanwhile, June WTI crude oil experienced a sharp decline, dropping 7.6% last week following an 8.6% decrease the week before. The price briefly fell below $79 per barrel, a significant reduction from its March 9 peak of approximately $104.35.

Shifts in interest rate expectations were also observed. In Europe, two-year government bond yields decreased by 20 to 25 basis points over the week, while US two-year yields saw a smaller decline of 7 to 8 basis points. Japan’s two-year yield edged down by nearly three basis points, but the swaps market exhibited far more pronounced changes.