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The European session will focus on the Eurozone Flash CPI data, with expectations of unchanged headline and core inflation rates at 1.7% and 2.2% respectively. This data is unlikely to influence the ECB's policy decisions, as central banks are more preoccupied with assessing the economic impact of the US-Iran conflict. In the US session, the agenda is limited to Fed speakers, with market attention diverted to geopolitical tensions. Tentative de-escalation efforts by UAE and Qatar have emerged, but no concrete actions from the US have materialized yet. The lack of significant economic data and the dominance of geopolitical risks mean that currency markets will likely remain volatile. Traders should monitor the Fed speakers for hints on monetary policy, particularly Kashkari's hawkish stance and Williams' dovish position. The Eurozone inflation data could provide short-term direction for EUR/USD, while broader risk sentiment will dictate movements in USD/TRY and other emerging market currencies. For MENA investors, the US-Iran situation poses risks to oil prices and regional stability. The upcoming Fed speakers may offer insights into future rate decisions, which could impact Gulf markets through capital flows. Key assets to watch include EUR/USD, USD/TRY, and Brent Crude Oil. Traders should prepare for increased volatility and consider hedging strategies as geopolitical tensions remain unresolved.
