Swissquote: Peace isn’t enough

June 19, 2026

US crude shortly dipped below the 200-DMA yesterday (near $74.80pb) and consolidates just above the $76pb level at the time of writing this morning as the US and Iran begin a 60-day negotiation period. If tensions remain low, US crude could steady within the $60–80pb range for the next three to six months and return below $50pb within 12 months.

Lately, the IEA has become increasingly vocal that once the Middle East disruption fades and flows normalize, the market is likely to swing back into a substantial surplus in 2027. Before the Iran war, the IEA had been projecting a surplus of nearly 4 million bpd for 2026, driven by strong supply growth and relatively weak demand growth. Today, they point to a 5 mbpd surplus. Indeed, the three-month conflict and the latest spike in energy prices boosted demand for alternative energy sources.

Against all odds, clean energy funds have been performing nicely since Donald Trump returned to the White House, slashing everything that has to do with clean and green energy. Alas, Nasdaq’s clean energy fund is up by 186% since the April 2025 dip and has recovered two thirds of its post-2021 losses. And it’s not the only well-performing clean energy fund!

Moving forward, the energy transition will continue to develop and attract funds with or without Trump. But Trump’s Middle East war has clearly been a boon for alternative energy providers.

Coming back to the peace negotiations, they won’t be a walk in the park as Iran will hold on to its nuclear programme whereas the US – having made an incredible amount of concessions to bring Iran to the table – has got very little margin left.

So the peace is not a done deal and the $300bn reconstruction fund for Iran gave US bondholders a touch of nausea, keeping upward pressure on yields along with the Fed’s hawkish stance.

The markets don’t know how to react to all this. Falling oil prices are good news, but the US dollar’s appreciation somewhat offsets part of the relief for other economies as energy – and other commodities – are priced in US dollars and a more expensive US dollar makes energy and other raw material imports more expensive for global markets.

The US dollar, on the other hand, is supported by a notably more hawkish-than-expected Fed announcement this week, with the new Chair Kevin Warsh insisting on ‘price stability’, highlighting that prices have hovered above the official inflation target for half a decade and that something needs to be done to bring inflation back there.

It goes without saying that ‘something’ is tightening the monetary policy.

As a result, we see yesterday’s relief rally on the interim US/Iran deal vanish this morning. The Nikkei is pulling back 1.45% from an ATH, the Korean Kospi sharply erased earlier gains and is now down by more than 1%. High volatility remains the name of the game in South Korea and its highly popular memory chip makers.

In the US, the news that Intel will be producing Apple chips on US soil gave the stock a nice boost, sending it to a fresh ATH and pushing VanEck’s Semiconductor ETF to a fresh high, yet US futures are in the negative this morning under pressure from rising US yields.

The US 2-year yield is consolidating a touch below the 4.20% level this morning on expectations that the Fed could hike rates as soon as September. Activity in Fed funds suggests that a September hike is given more than a 70% chance today.

Yesterday, the Bank of England (BoE) and the Swiss National Bank (SNB) left their rates unchanged. The Swiss confirmed there is no need to hike rates while inflation remains comfortably below target, while British policymakers said that the recent pullback in oil prices was somewhat comforting, but warned that ‘even in the event of prompt conflict resolution, there could be a logistical delay in restoring energy production and transportation’.

Cable dived below a critical Fibonacci retracement, the major 38.2% retracement of the 2025–26 rally, and therefore stepped into the medium-term bullish consolidation zone. The bearish move is supported by the hawkish divergence between the Fed and the BoE, suggesting a deeper fall toward the 1.30 mark (the 50% retracement).

Across the Channel, the dollar’s appreciation pushed the EURUSD below the 1.15 mark. The critical support lies near 1.1345, the major 38.2% Fibonacci retracement of its own 2025–26 rally. Here as well, the Fed’s hawkish divergence will likely play in favour of a deeper pullback toward and potentially below that level.

In precious metals, rising US yields increase the opportunity cost of holding non-interest-bearing gold and will likely send the price of an ounce below the $4’115 mark, the major 38.2% Fibonacci retracement of the latest bullish trend that started in October 2023. We could see bullion return to the $3’500–4’000 range as the speculative bubble continues to deflate, without damaging its multi-year bullish trend.

In the short run, the dollar’s appreciation could accelerate the selloff if global central banks continue to sell their holdings to stabilize their currencies, but in the longer run they will replenish their weakened gold reserves, which will keep gold demand intact. The latest US military ambitions – and the additional pressure on US debt – will encourage a further replacement of US Treasuries by the yellow metal.