The dollar index (DXY00) today is down by -0.46% on reduced safe-haven demand for the dollar on hopes that the conflict between Israel and Iran will be contained.  The dollar is also under pressure from today's US economic news, which showed an unexpected decline in the June Empire manufacturing general business conditions survey.  Losses in the dollar accelerated today on a news report that said Iran wants to cease hostilities and restart talks over its nuclear program.  The dollar remains generally weak due to expectations of weaker US economic growth and reduced foreign investment in the US caused by President Trump's tariffs. 

The US Jun Empire manufacturing survey of general business conditions unexpectedly fell -6.8 to -16.0, weaker than expectations of an increase to -6.0.

The Wall Street Journal reported that Iran seeks to an end to hostilities and wants a resumption of talks over its nuclear program.  The Iranian government told Arab officials it would be open to return to the negotiating table as long as the US doesn't join the attack.  The Iranian government also sent messages to Israel saying it is in the interest of both sides to keep the violence contained.  However, Israeli Prime Minister Netanyahu has said the attacks will continue until Iran's nuclear program and ballistic missiles are destroyed, and he has shown no indication he is ready to stop.

The markets are discounting the chances at 0% for a -25 bp rate cut after the Tue-Wed FOMC meeting.

EUR/USD (^EURUSD) today is up by +0.50%.  Today's dollar weakness is benefiting the euro.  The euro also garnered support from today's positive comments from ECB Vice President Guindos, who said the threat of inflation falling short of the ECB's 2% target is contained, and wage increases are easing to levels seen as compatible with the ECB's goal.  Gains in the euro are limited after today's economic news showed easing wage pressures in the Eurozone, a dovish factor for ECB policy. 

Eurozone Q1 labor costs eased to +3.4% y/y from +3.8% y/y in Q4, the smallest pace of increase since Q3 of 2022.

Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting.

USD/JPY (^USDJPY) today is down by -0.23%.  The yen today recovered from overnight losses and is moving higher due to weakness in the dollar.  Also, the recent spike in crude oil prices to a 4-3/4 month high may lead to higher energy prices and faster inflation in Japan, a hawkish factor for BOJ policy. 

The yen initially moved lower today as the rebound in global equity markets curbed safe-haven demand for the yen.  The yen is also being undercut by expectations that the BOJ will leave interest rates unchanged and maintain a dovish tilt on monetary policy during its 2-day meeting that ends Tuesday. 

August gold (GCQ25) today is down -38.30 (-1.11%), and July silver (SIN25) is down -0.020 (-0.06%).  Precious metals today are under pressure, with gold prices falling from a 5-week high.  Today's rebound in global equity markets has reduced demand for safe-haven assets, including precious metals.  Also, higher global bond yields today are pressuring precious metals prices.  Silver prices were undercut by weaker-than-expected Chinese economic news, including May's new home prices and industrial production, which were negative factors for industrial metals demand.  Losses in precious metals prices accelerated today on news that Iran wants to cease hostilities and restart talks over its nuclear program. 

Today's weaker dollar is bullish for metals prices.  Precious metals still have support from safe-haven demand from the conflicts between Israel and Iran and Ukraine and Russia.  Also, global trade uncertainty is boosting safe-haven demand for precious metals after President Trump indicated last Wednesday that he is moving ahead with his reciprocal tariffs.  Fund buying is also supporting gains in silver, as silver holdings in ETFs rose to a 2-1/4 year high last Friday.

China May new home prices fell -0.22% m/m, the twenty-fourth consecutive month home prices have declined.

China May industrial production rose +5.8% y/y, weaker than expectations of +6.0% y/y.