Insights 
VT 
Japan’s construction orders fell to 14% in May, a decrease from the previous 52.7%. This represents a downturn in the construction sector’s year-on-year growth for that month.
In European trading on Thursday, the EUR/USD hovered around 1.1700. The US Dollar displayed weakness amid concerns over the Federal Reserve’s independence.
The GBP/USD pair maintained levels above 1.3700, marking fresh multi-year highs. This occurred as the US Dollar continued its weak trajectory post statements regarding the Federal Reserve’s credibility.
Gold’s Modest Rise
Gold prices held a mild positive stance for the second consecutive day. Despite this, the precious metal stayed below the $3,350 threshold.
Bitcoin Cash saw a 2% rise on Thursday after a previous 6.39% surge. The digital asset approached the $500 mark, showing signs of bullish momentum.
The tension in the Middle East, particularly concerning Iran and the Strait of Hormuz, rattled the oil market. Potential disruptions in this vital shipping route drew attention amidst the ongoing Israel-Iran conflict.
Japan’s construction orders contracting from over 50% last year to just 14% in May isn’t merely a statistical anomaly. This pullback suggests we are looking at a marked deceleration in overall industrial demand for new infrastructure or large-scale projects. When you see such a swing, it tends to ripple outward—undermining demand for imported raw materials, potentially cooling inflationary pressures tied to commodities, and in turn allowing regional central banks to justify dovish commentary. We should keep an eye on how this data reflects softening demand that will eventually influence bond markets and interest rate differentials across Asia and beyond.
Euro Versus Dollar
The euro holding near 1.1700 against the dollar during Thursday’s European trade had less to do with euro strength and more to do with broad-based dollar weakness. Concerns are growing over the Fed’s perceived autonomy. With markets questioning how insulated the central bank is from political influence, the greenback has lost a fair bit of footing. This waning confidence disrupts flows into dollar-denominated assets. It’s not a collapse, but it’s not nothing either. Traditionally, such conditions increase volatility in yield-sensitive instruments, especially across short-dated futures.
For sterling, the continued strength above the 1.3700 level cannot be ignored—this sets a new short-term top not seen in years. Much of this strength isn’t about domestic economic brilliance, but rather further fallout from US markets. The dollar’s fall is providing room for competitor currencies to stretch out their gains, and GBP is no exception. Traders who’ve built long positions recently will likely feel vindicated, but for us, the sustainability of this trend will hinge on incoming inflation data and any surprise remarks from the Bank of England in upcoming sessions. Volatility instruments may offer a leaner entry point if implied vols retreat midweek.
On the commodities front, gold’s quiet two-day rise is modest, yet it fits within the broader context of hesitant risk sentiment. Prices nudging higher—but still notably below the $3,350 mark—indicate restrained appetite. There’s demand, but not yet conviction. Market participants have been rotating toward inflation hedges slowly, perhaps unsure about the direction of real yields. This serves as a potential stabilising anchor; for short-dated gold contracts, the bias seems slightly upward, albeit within a capped range. Measured call spreads might see better pricing if dollar softness extends into next week.
In the crypto segment, Bitcoin Cash’s lift of 2% comes on the heels of an even stronger prior-day performance. As prices neared the $500 level, we observed classic signs of strength confirming underlying buying pressure. However, these moves can attract speculative flows rather than long-term holders. It’s important to monitor open interest and funding rates now; if they rise too rapidly, the trade becomes crowded and fragile. Still, the stronger momentum in recent sessions does provide setup potential for breakout scalping. We’ll be assessing whether these levels hold into the weekend session—that’s generally a better measure of the commitment behind such moves.
Oil, on the other hand, remains delicately balanced. The increased anxiety over potential conflict in the Middle East—particularly around Iran and the Strait of Hormuz—is not unfounded. This specific route is key for global oil transport, and even the possibility of disruption creates price floors. So far it’s more of a geopolitical premium than a supply-side shock. This has translated into tighter near-dated spreads and kept a firm bid beneath Brent. Traders should treat any escalation or resolution comments with care; large intraday ranges are more likely when tension vector shifts occur overnight. Front-month contracts remain susceptible to sudden re-pricing on headline risk.
