US to pull some personnel from the Middle East
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The dollar firmed against major currencies on Monday, driven by safe-haven buying from investors fearing the Israel-Iran fighting could escalate into a broader regional conflict as they braced for a week packed with central bank meetings.
Oil prices rose as much as 12 per cent in the immediate aftermath of Israel’s attacks on Iran’s nuclear facilities. Over the weekend the conflict escalated further with Israel hitting, among other targets,
Services inflation is where the real curveball landed. It slowed sharply, driven by plunging airfares and softening housing costs. Supercore inflation—core services ex-housing—has collapsed from a 9.5% annualized pace in January to essentially flat over the past three months. That’s not disinflation—that’s demand destruction.
A further escalation in Iranian-Israeli tensions could take oil prices above $80 and would mean more upside for the dollar.
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