The euro was holding near its strongest in a week on Friday. Trump claimed that the US “just made a great settlement of the war with Iran,” subject to the “finalization of documents.”

Iran will treat all of Elon Musk’s companies in the Middle East, including SpaceX’s Starlink internet service, as military targets as it retaliates against the US, Iranian state media reported Thursday.

The ECB announced a 25-bp rate hike, and raised its inflation forecasts, saying it now expects headline inflation in the euro zone to average 3% in 2026 before cooling to 2.3% next year and 2% in 2028.

Economic growth forecasts were revised downward for this year and next year. The central bank now expects growth in the euro zone to average at 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028.

The developed market rate-hiking club is getting bigger with Australia, Norway and Japan taking the lead, while more central banks are set to follow in the coming months.

The yield on 10-year Bunds rose to its highest level since 2011 in May. Germany could face an unprecedented period of stagnation heading into 2030 despite massive stimulus rolled out earlier.

The single currency is experienced a short-term, low-momentum counter-trend retracement upward. EBC Financial Group analyst sees it rise further towards 1.1590 given the push above the resistance at 1.1567.

Asset recap

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