EU Market Open: Hawkish Fed spurs USD, energy softens amid US-Iran virtual MoU signing

Fed held rates but removed forward guidance completely while the SEPs showed 9 members anticipate a 2026 hike, sparking a hawkish reaction.US stocks finished lower, USD bid and the US yield curve bear flattened. Markets returned to fully pricing in a 25bps hike by end-2026.However, a portion of this unwound in APAC trade as oil prices moved lower following the US and Iran signing the 14-point agreement digitally; move capped as talks in Switzerland on Friday are not yet confirmed.Nonetheless, crude benchmarks are lower by over 2% and towards the session trough as we await clarity on Friday.APAC stocks traded mixed as the initially digested the Fed, before lifting on the MOU signing.US President Trump said he thinks Russian President Putin and Ukrainian President Zelensky want to do something on the war.Looking ahead, highlights include UK Employment Report (Apr), Average Earnings (May), Canadian PPI (May), US Initial Jobless Claims (Jun/13), New Zealand Trade Balance (May), SNB Policy Announcement, Norges Bank Policy Announcement, BoE Policy Announcement, CNB Policy Announcement, UK Makerfield by-election, Speakers including Norges Bank's Bache, SNB's Schlegel, ECB's Elderson, Cipollone & Lane, Supply from Spain, France & US.Click for the Newsquawk Week Ahead.Read the full report covering Equities, Forex, Fixed Income, Commodites and more on Newsquawk