Conflicting reports on a potential US-Iran deal trigger volatility, weighing on risk-sensitive currencies and equity sectors.
The AUD/NZD pair fell sharply, marking its largest single-day decline since 2022, as markets reacted to mixed signals on a US-Iran memorandum of understanding. Reports of a draft deal, including military withdrawal and sanctions relief, were later dismissed by the White House as fabrication.
US Treasury yields held steady, with 5-year notes sold at 4.182%, nearly unchanged from the when-issued rate. The Richmond Fed’s May composite index rose to +13 from +3, while weekly ADP employment data missed expectations at 35.75K versus 42.25K prior.
Equities opened higher on deal optimism but gains faded as uncertainty persisted. Healthcare and consumer cyclicals led a tech-sector decline, while ECB officials warned of lower growth and persistent inflation risks.