Asian markets rebounded overnight, posting their first gain in four sessions as a partial Iran-Israel ceasefire pause and a recovery in semiconductor stocks lifted sentiment from Monday's lows. The environment has shifted from acute risk-off to cautious consolidation, but the structural forces that drove last week's dislocation - a blowout May jobs report and a Fed rate hike pricing now sitting near 70% for December - have not reversed.
WTI crude is holding around $94.43, sustained by persistent Hormuz disruption even as the partial ceasefire soften the geopolitical premium at the margin. Gold has stabilised above $4,300 but remains technically pressured, finding itself caught between safe-haven demand and the rate hike headwind with neither side yet dominant. Markets price a 99% probability of an ECB rate hike to 2.25% on June 11 - that decision is largely in the price, meaning Lagarde's press conference language is the real event risk for EUR/USD this week.
The key levels to know: Gold's $4,319 yearly open support is the week's technical pivot. USD/JPY above 160.50 is where intervention risk becomes acute given the 0th percentile crowded short in JPY. WTI below $92.00 would signal the geopolitical premium is deflating faster than the market expects. Wednesday's US CPI is the week's single most important data print - it will either validate the rate hike narrative that has dominated since Friday or give markets the first credible reason to reverse it.
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