• Spot rupee ended positive note at 95.12, buoyed by reports that US and Iran may soon sign a peace deal, and crude oil flows may resume through the Strait of Hormuz. Equity market benchmarks gained about 2.00 today.
• DXY is trading lower at 99.71 level today as markets are becoming increasingly optimistic about a US-Iran deal and that crude oil will begin to flow through the Strait of Hormuz. After President Trump announced that there could be a deal by the weekend. Iranian officials also confirmed that a deal is possible. Crude oil prices fell more than 4 to below $84/bbl. On Friday, extending losses to an eight-week low.
• Iran’s Mehr News Agency reported that a 14-point draft agreement includes the lifting of oil sanctions and a commitment from Tehran to reopen the Strait of Hormuz within 30 days, although the proposal still requires approval from Iranian authorities. President Trump said a deal could be signed as soon as this weekend in Europe. The reported agreement would also involve the release of frozen Iranian funds, the suspension of sanctions, and the withdrawal of US forces from the region.
• UK GDP contracted by -0.1 m/m in April, matching expectations. The setback followed solid gains of 0.4 in February and 0.3 in March, suggesting the economy lost some momentum at the start of the second quarter. Sevices output fell -0.2 while Construction output gained 0.1.
• Despite the softer monthly reading, the broader growth picture remained relatively encouraging. In the three months to April, GDP expanded by 0.7 compared with the previous three-month period, accelerating from 0.6 in the three months to March and 0.5 in the three months to February.
• Data from Eurozone showed German and French May CPI was finalized at the preliminary release at 0.2 m/m and 0.1 m/m gain respectively.
• Key data releases ahead: US: Prelim UoM Consumer sentiment; Inflation expectations; India: May CPI m/m; y/y;

Rupee opened higher at 95.36 levels, amid easing crude prices due to optimism over a possible agreement between US & Iran. Equity market benchmarks are trading about 1.25 higher in early trades.

DXY pulled back after President Trump announced that Iran has agreed to sign a deal to end the war – currently trading at 99.72 level. Crude oil prices pulled back more than 4 after the announcement.

The ECB raised its key interest rates by 25 bps to 2.25 as widely expected and raised its inflation forecast and downgraded its growth outlook for the near term. The ECB however stated that future decisions will be dependent on the incoming data and adopt a meeting-by-meeting approach.