Good morning everyone and welcome back to yet another week of mayhem!

First, let’s just glance through the latest news from the Middle East this weekend in case you missed them:

It appears that there are talks between Israel and Hamas of a potential hostage exchange, which has led to a temporary postponement of a potential land invasion that Israel had previously indicated intend to launch.

Additionally, there have been reports of internal unrest in Iran, with footage showing military movements, possibly in response to Kurdish resistance forces taking advantage of the situation. Please note that these reports are unconfirmed but worth monitoring.

Hezbollah continues to engage IDF resources along the Lebanese border, but if Tehran shifts its focus to domestic issues, there may be a lull in activity on that front.

On a different note, Gaza has received some humanitarian aid through the Rafah border, and market sentiment appears to be less jittery, with gold trading at lower levels

With that out the way let’s jump to the latest trading session from the East:

After the CPI report in Japan last week we argued that the Bank of Japan will remain under pressure in the coming weeks, alas it seems that markets move faster than that:

JGB futures may be a tad down but the Japanese 10Y is at a fresh decade high and the Yen had a brief detour above the 150 level. Whether that pressure will be sustained in the more liquid trading sessions we will get a taste of these next couple of days. Price action lingering around the intervention-zone last night:

Chart 1: Yen swings, Bloomberg