[MARKET ANALYSIS] DXY knocked on optimistic Pakistan sources on US-Iran; EUR and GBP outperform as TTF eases

DXY was bid through APAC trade, marking a peak of 99.11 in Europe, thereafter entirely erasing gains to a 98.95 trough following an optimistic readout of the Pakistan-Iran meeting via Saudi press sources (see commodities for details). Focus remains on the geopolitical situation and its follow through to yields, where the US 30yr currently sits at the middle of Wednesday's Treasury announcement fall, around 5.22%. Brent contracts trade USD 3/bbl off session highs, the Brent November contract looking below to 88.50/bbl. The session ahead is light with ADP’s weekly Employment Change data and a 2yr auction scheduled. EUR did not take too much of a lead from the aforementioned action in energy markets. TTF around EUR 67/MWh remains at an uncomfortable level for the ECB, which, alongside a strong Ifo, paints a hawkish mood in today’s session. EUR/USD is just off recent 1.17 highs, within 1.1651-1.1671. GBP action is similarly quiet with focus on the upcoming week’s risk events; domestic updates include PM Burnham failing to rule out tax increases in the Budget, remarks which have not given much of a lead to UK assets. GBP outperforms vs. USD just below 1.1650 and EUR, at 0.8550. SEK is weaker against the EUR and flat against the Buck with no reaction to Riksbank minutes, which showed members were optimistic about the Swedish economy, though revealed a split on the future rate path, with some members maintaining a wait-and-see stance.