BNY’s Geoff Yu notes that expectations of progress toward peace in Iran are driving a bond rally and shaping flows in the United States (US) Treasury market. As Oil prices fall and real rates reprice, he argues exporter surpluses and reserve management trends could again favor the US Dollar (USD).

Brazil Industrial Output (YoY) registered at 4.3% above expectations (3.5%) in March

Brazil Industrial Output (MoM) above expectations (-0.2%) in March: Actual (0.1%)

Mexico Core Inflation meets forecasts (0.31%) in April

Mexico 12-Month Inflation registered at 4.45%, below expectations (4.5%) in April

Mexico Headline Inflation below forecasts (0.25%) in April: Actual (0.2%)

Cryptocurrency prices are showing broad weakness on Thursday, following a widespread rally this week that saw Bitcoin (BTC) rise to $82,850 for the first time in three months. The Crypto King is now trading above $81,000, with its upside seemingly capped as retail and institutional demand cools.

Nomura's research analysts report that the central bank of Norway, Norges Bank unexpectedly raised its policy rate by 25bp to 4.25% in May, citing frustration with sticky underlying inflation and a need to preserve credibility after earlier guidance.

Gold (XAU/USD) holds firm on Thursday, hovering near two-week highs as price action remains driven by geopolitical headlines, with traders awaiting further clarity around a possible peace deal between the United States (US) and Iran.

USD/CAD trades around 1.3630 on Thursday at the time of writing, showing little change on the day, as lower Oil prices continue to weigh on the Canadian Dollar (CAD) while the US Dollar (USD) remains pressured as well.

ING’s Ewa Manthey and Warren Patterson note that industrial metals, including Copper, rallied on Wednesday as progress towards a US-Iran deal improved risk appetite and eased fears of an energy shock, before paring gains on Thursday.

The GBP/USD pair trades 0.18% higher around 1.3620 during the European trading session on Thursday. The Cable reflects strength as the US Dollar (USD) faces selling pressure amid the optimism that the United States (US) and Iran will reach a peace deal soon.

TD Securities strategist Bart Melek argues that Gold’s recent decline reflects the Iran-driven Oil shock, higher inflation expectations and a firmer US Dollar, which are keeping Fed policy tighter for longer.

The New Zealand Dollar (NZD) keeps marching higher at two-month highs against the US Dollar (USD) on Thursday, as reports of progress in the US-Iran peace deal and lower Oil prices keep demand for the safe-haven US Dollar subdued.

Brown Brothers Harriman’s (BBH) Elias Haddad notes that the Dollar has given back all its war-related gains, with recent weakness seen as overdone.

Boston Federal Reserve (Fed) Bank President Susan Collins said during the late European trading session on Thursday that she sees the central bank holding interest rates at their current levels for longer. Collins added that she expects interest rate cuts to be the baseline scenario going ahead.

Societe Generale analysts highlight that the Czech National Bank (CNB) is expected to keep its policy rate at 3.50% despite a rise in headline inflation to 2.5% year-on-year in April. Governor Michl has emphasized maintaining positive real rates to support savings.

Bitcoin (BTC) consolidates at the time of writing on Thursday after surging earlier this week, pausing near its key 200-day Exponential Moving Average (EMA) around $82,162.

Silver (XAG/USD) keeps rallying on Thursday, with precious metals buoyed by lower Treasury yields amid a pullback in oil prices that has eased bets on US Federal Reserve (Fed) rate hikes.

DBS Group Research economist Radhika Rao notes that the Reserve Bank of India (RBI) is exploring measures to attract more US Dollar (USD) flows to support the Rupee and address the balance of payments gap.

USD/JPY trades around 156.30 on Thursday at the time of writing, down a modest 0.05% on the day, as the Japanese Yen (JPY) remains supported by speculation that Japanese authorities could step into the market to curb the currency’s weakness.

TD Securities strategists Izidor Flajsman and Prashant Newnaha argue that Australia is entering a rare phase of unilateral RBA tightening, with the Fed expected to cut while the RBA continues hiking.

The Euro (EUR) appreciates against the US Dollar (USD) for the second consecutive day on Thursday, trading at 1.1765 at the time of writing, fuelled by hopes of a peace deal that would end Iran’s war and upbeat Eurozone macroeconomic releases.

Commerzbank’s Michael Pfister argues that The Bank of Mexico's (Banxico) easing cycle, signalled by the March cut, should continue with another 25 bp reduction widely expected today.

Societe Generale analysts note that the central bank of Sweden, Riksbank left rates on hold this morning at 1.75% and EUR/SEK has been rebounding from an interim low and is now challenging its 200-day moving average, which has capped the pair since last year.

Ondo Finance (ONDO) price extends a seven-day rally on Thursday on its first-of-its-kind OUSG tokenized short-term U.S. Treasury settlement. The ONDO price rally outperforms XRP, even as Ripple also participated in the project.

United States Challenger Job Cuts up to 83.687K in April from previous 60.62K