Dow rallies, GBP/USD recovers while US natural gas futures prices slip 

Macro update

Asia-Pacific index Asian equities rally on growing ceasefire optimism: Japan's Nikkei advanced 3.6%, South Korea's KOSPI surged 7.8%, and MSCI's Asia-Pacific index excluding Japan gained 3.7% as hopes for a ceasefire agreement in the Gulf sparked a broad-based improvement in risk sentiment.

Wall Street posts strongest gains since April ceasefire: The Dow climbed 1.9%, the S&P 500 rose 1.8% and the Nasdaq gained 2.5% on Thursday, marking their largest daily advances since the April 8 ceasefire after President Trump called off planned military strikes against Iran.

Oil falls to a two-month low on peace prospects: Brent crude dropped around 2% to $88 a barrel after President Trump suggested an agreement to reopen the Straits of Hormuz could be reached this weekend, although Iran stated it had yet to approve any formal deal.

Treasuries hold firm as expectations of Fed tightening ease: Two-year Treasury yields remained around 4.07% and 10-year yields held at 4.47%, while the implied probability of an October Federal Reserve rate hike fell to 36% from 51% as easing geopolitical tensions reduced inflation concerns.

Dollar steadies while yen remains under scrutiny: The dollar index stabilised at 99.74 following the previous session's decline, with the dollar edging up 0.2% against the yen to 160.24 as traders continued to monitor the risk of official intervention around the ¥160 level.

OPEC revises oil demand forecasts: The producer group lowered its 2026 global oil demand growth forecast to 970,000 barrels per day from 1.17 million, while increasing its 2027 projection by 190,000 barrels per day to 1.73 million, reflecting a more optimistic longer-term outlook.

Dow Jones is seen heading back up towards record highs

The Dow Jones Industrial Average is once again heading higher, boosted by hopes of an imminent US-Iran deal which would reopen the Straits of Hormuz.

While this week's low at 49,914 underpins, the 51,200 region and the 2 June high at 51,375 will be in focus, ahead of the indices' 51,665 record high.

Short-term outlook: bullish while above the 10 June low at 49,914

Medium-term outlook: bullish while above the 29 April 48,709 low 

Dow Jones daily candlestick chart

GBP/USD tries to recover

GBP/USD's continues to oscillate around its 200-day simple moving average (SMA) at $1.3416 while bouncing off Monday's $1.3306 low.

While last week's low at $1.3306 holds, the late May and early June highs at $1.3483-to-$1.3485 may be revisited. If bettered, the 25 May high at $1.3509 would probably be eyed next.

A fall through the May and current June lows at $1.3306-to-$1.3303 may lead to the $1.3250 region being revisited, though.

Short-term outlook: neutral while below $1.3509 but above $1.3303

Medium-term outlook: neutral while trading within its $1.3160-to-$1.3658 March-to-May boundaries

GBP/USD daily candlestick chart

US natural gas futures retreat

Last week US natural gas futures' rally ran out of steam at 322.8, not far below its 323.8 early June peak, before keeling over. So far the April-to-June uptrend line at 290.2 underpins.

While this remains the case, the early June low at 296.8 is expected to be revisited. Further potential upside targets are the recent highs at 303.4 and 305.6, ahead of the mid-March high at 307.9 and the 200-day simple moving average (SMA) at 312.6.

A fall through the uptrend line at 290.2 and the mid-February highs at 289.9-to-287.9 would likely engage the early February low at 286.5.

Short-term outlook: bearish while below the 10 June high at 310.4

Medium-term outlook: bullish while above the 25 May low at 267.4

US natural gas daily candlestick chart