MILAN, June 17 Stocks edged up and currencies were subdued on Wednesday ahead of Kevin Warsh’s debut as Federal Reserve chair, while oil prices remained near three-month lows, easing inflation pressure and pushing bond yields lower.
Brent crude fell as far as $77.75 a barrel, down more than a third from April peaks after reports the United States may waive sanctions on Iranian oil under a deal to end the war
It was last up 0.4% at $79.29. The prospect of extra supply added to optimism about the resumption of Middle East exports that has helped push U.S. Treasury yields lower this week, alongside a rally in global bonds, even as the conflict has drained strategic oil reserves. “Iran’s total exports could approach around the equivalent of 2% of global demand,” said Luka Belobrajdic, an economist at Westpac, though he cautioned any sanctions relief is unlikely to be immediate and would depend on the durability of peace.
The International Energy Agency said the oil market will move into a significant supply surplus in 2027 after recovering from the closure of the Strait of Hormuz. Cooling inflation expectations lifted euro zone government bonds for a fifth day, their longest rally since February, driving 10-year German yields, the bloc’s benchmark, to their lowest since early April. British yields fell sharply after May inflation unexpectedly held at a 13-month low of 2.8%, a day before the Bank of England’s next rate decision.