A1 TRADING | Indices, Commodities, Forex, Futures

Oil Pulls Back, But Elevated Levels Keep Pressure on Markets Oil has pulled back sharply — down ~22% from the highs — but that doesn’t tell the full story. Price is still sitting nearly 50% above the initial breakout level. Oil isn’t cheap, it’s still elevated, and that matters for markets. There’s growing optimism around de-escalation, but headlines continue to contradict each other. You’re getting progress on talks alongside ongoing disruptions and threats — making directional conviction in oil much harder to establish. From a macro lens, this is where it matters. Elevated oil over an extended period feeds directly into inflation, pressures consumer spending, and tightens financial conditions. That complicates central bank policy — delaying cuts, supporting higher yields, and creating headwinds for equities. It also keeps volatility elevated across assets, as markets remain sensitive to any shifts in energy supply. - Alan

USD Directional Call Is Tricky DXY is staying under pressure below 99 as markets balance soft core inflation against ongoing geopolitical risk. While ceasefire talks and potential negotiations are offering some relief, the situation is far from resolved — with Hormuz still restricted, keeping oil elevated. From a data standpoint, headline CPI came in hot, driven by energy, but core inflation was softer than expected. That’s the key split. Markets are reading it as no broad-based inflation problem just yet — more of an oil-driven spike. That’s weighing on the dollar. With core inflation not accelerating meaningfully, the Fed is unlikely to tighten into this environment. If anything, it keeps the door open for cuts later on, even if near-term expectations remain muted. Technically, the dollar remains weak. Unless we see a shift in inflation dynamics or a stronger risk-off bid, rallies are likely to be faded. - Alan

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The RBNZ Is Losing Patience NZD/USD pushed up toward 0.584, hitting fresh two-week highs as the RBNZ turned more hawkish. The central bank is making it clear — if core inflation starts to re-accelerate, they’re ready to hike. That’s a big shift from recent commentary. Despite softer growth expectations, the focus is firmly on inflation. Rising energy costs are feeding into that outlook, and the RBNZ is signaling it’s willing to act preemptively if needed. Rate hike expectations have ramped aggressively, with strong odds for a move as soon as July and rates now seen pushing toward 3% by year-end. The broader backdrop still matters — ceasefire uncertainty and geopolitical risk are keeping sentiment fragile. Remember, NZD is a risk-currency that reacts heavily to sentiment. In times of risk-off, this currency typically leads the path downward. NZD/USD has lost most of its strong reading on the EdgeFinder, dropping from -13 to -5. - Alan

Can The Euro Sustain This Rally? EUR/USD is holding firm just below 1.17, but price action is being pulled in both directions as markets question how stable this ceasefire really is. On one hand, escalating tensions — strikes in Lebanon, Iran pushing back on talks, and ongoing disruptions in Hormuz — are keeping oil elevated again. That reintroduces inflation risk and adds uncertainty across markets. On the policy side, the Euro is getting support from shifting ECB expectations. Markets are now leaning toward additional hikes into 2026, which is helping keep the currency bid. At the same time, the dollar remains on shaky footing after recent weakness, adding to the upside in EUR/USD. The entire move is conditional on the ceasefire holding. If tensions continue to escalate and oil stays bid, that dynamic can shift quickly — especially if the dollar catches a safe-haven bid again. - Alan

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Global Yields Drop as Ceasefire Reopens Door for Rate Cuts Yields are pulling back sharply across the board as ceasefire headlines trigger a repricing in rate expectations. With oil dropping, inflation concerns ease, and that’s giving central banks more room to cut — pushing bond prices higher and yields lower. In the U.S., traders are bringing Fed cuts back into the conversation. Rate cut probabilities have jumped meaningfully, reversing some of the hawkish repricing we saw during the oil spike. The war had complicated things — higher oil meant stickier inflation — but this shift in energy resets that narrative, at least for now. Globally, the move is broad. European yields are declining as hike expectations fade, while the UK is seeing even sharper moves to the downside. This is a synchronized reaction to easing inflation pressure tied directly to oil. Upcoming data — CPI and FOMC minutes — will be key in validating whether this move in yields has real follow-through or not. - Alan

S&P 500 Surges as Ceasefire Sparks Risk-On Repricing Markets are ripping higher after a two-week ceasefire announcement between the U.S. and Iran triggered a broad risk-on move. Oil broke back below $100, and that’s been the key driver — once energy came off, everything else followed. Equities higher, bonds bid, yields down, dollar weaker. This entire move is a direct unwind of the oil-driven risk premium that’s been dominating markets. With crude pulling back, traders are reopening the door for Fed cuts, which adds fuel to the rally in equities. That said, nothing is confirmed. The ceasefire is conditional, and its durability is still a big question mark. Markets may be reacting aggressively, but they’re not fully convinced this is a lasting resolution. Technically, this is a sharp squeeze higher — but chasing here is risky. The bulk of the move has already played out, and unless the ceasefire holds, this can reverse just as fast. - Alan

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🚨UPDATE: A two-sided ceasefire has been initiated According to the press, the U.S. and Iran have agreed to a double-sided ceasefire, with one of the conditions being the reopening of the Strait of Hormuz. This lifts some of the pressure in the short term. We’ll see how much repricing occurs across the markets.