National Bank of Serbia publishes weekly market review as euro weakens 0.69 percent and Brent falls 10.65 percent

The National Bank of Serbia published its weekly review of global and selected emerging market developments for June 22 to 26, highlighting a weaker euro against the U.S. dollar, lower developed market sovereign yields and sharp declines in oil and gold prices. Over the period, the euro fell 0.69% against the dollar and ended at USD 1.1390, while Brent crude dropped 10.65% to USD 71.99 per barrel and gold fell 1.70% to USD 4,085.18 per ounce. The review said the dollar strengthened early in the week as tensions in the Middle East increased and U.S. PMI readings mostly beat expectations, pushing EUR/USD as low as 1.1325 during trading. Later in the week, softer U.S. PCE data supported a partial recovery in the euro. U.S. Treasury yields fell on maturities of one year and longer, with the two-year yield down about 9 basis points to 4.09% and the 10-year down about 8 basis points to 4.37%. German yields also declined, with the two-year and 10-year down about 13 basis points to 2.52% and 2.85%, after remarks by ECB President Lagarde reduced expectations of a more aggressive monetary policy response and German PMI data came in below expectations. In selected emerging markets, the review said lower oil prices after progress in U.S.-Iran talks supported central and eastern European local currency bond markets, where 2032 bond yields fell by an average 13 basis points. Hungary cut its policy rate by 25 basis points to 6.00%, while Serbia's local currency 2032 bond yield rose 17 basis points to 5.330%. The fall in Brent was tied to expectations of normalized Middle East supply and easier sanctions on Iranian oil, though renewed security risks around shipping in the Strait of Hormuz limited the decline.