US Strikes Northern Iraq Infrastructure as Brent Briefly Touches $80
Updated
Updated · ING Think · Jul 9
US Strikes Northern Iraq Infrastructure as Brent Briefly Touches $80
3 articles · Updated · ING Think · Jul 9
Summary
Northern Iraq was hit by US strikes on infrastructure targets overnight, the first such attack since early April after US-Iran talks appeared to break down and Gulf fire intensified.
Brent briefly touched $80 a barrel, driving sharp moves at the short end of interest-rate curves and lifting expectations that higher energy costs could delay disinflation and strengthen the case for a Fed hike.
DXY traded around 101.00 as the dollar firmed modestly, while the bigger FX impact was a jump in volatility and an unwind of carry trades that hit high-yielding emerging-market currencies, especially the forint.
June FOMC minutes showed policymakers weighing two equally credible paths—a delayed rate cut if inflation eases or a quicker hike if it stays high—with next week's US CPI and Chair Kevin Warsh's testimony now the key tests.