UBS On-Air: Paul Donovan Daily Audio 'Prolonging uncertainty'
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European powers begin nuclear talks with Iran, and the US has signaled that it does not intend to decide on military strikes against Iran for two weeks. That means two weeks of uncertainty for financial markets, but investors are still inclined to see the Middle East conflict as
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4 itemsUBS On-Air: Paul Donovan Daily Audio 'Extending the “ceasefire”'
Per the full note [source], Paul Donovan argues that the ceasefire extension between the US and Iran is cautiously received by oil markets, with Trump needing days to approve and Iranian officials signaling insufficient concessions. This suggests limited near-term relief for oil prices, keeping upward pressure on inflation-sensitive currencies. Japan's May Tokyo CPI slowed, partly from base effects and gasoline subsidies, while retail sales proved resilient due to government cost-shifting. The desk frames the oil supply risk as a persistent factor for FX markets, with no near-term resolution expected.
UBS On-Air: Paul Donovan Daily Audio 'Managing a “no deal” world'
The desk interprets the current lack of tangible progress in the Iran-US negotiations as a significant driver for muted market reactions, particularly concerning oil prices. Despite a recent uptick in oil, as noted by UBS's Paul Donovan, this has prompted a broader sense of skepticism among investors about geopolitical developments. Per the full note, this uncertainty is compounded by weak investment data from Japan and ongoing inflation concerns across developed economies. As markets absorb these signals, particularly in oil-sensitive currencies, traders should remain alert to any decisive statements from Iran or shifts in central bank policies that might alter the prevailing narrative.