The energy sector is on track to post a 12% second-quarter gain as crude prices finish Q2 with their fourth consecutive quarterly rise. The move is notable given the volatile environment, and derives significantly from fears of Iranian supply disruptions, but Saxo Head of Equity Strategy Peter Garnry says that it could prove vulnerable to any intensification of the trade war.

"The Iranian focus has certainly overshadowed the Opec+ production rise deal," says Saxo commodities head Ole Hansen. Hansen also reports that gold is set to post its worst month since November 2016 at the end of June, with prices having faltered significantly as safe-haven investors flocked to the USD and US bonds instead of the yellow metal.

"Looking at the XAUUSD chart, the double bottom formation at $1,246/oz could trigger a rally if prices break north of $12,56/oz," Hansen says.

In forex, Saxo Bank Head of FX Strategy John Hardy reports that the euro soared overnight as the European Union apparently reached a deal on migration, with the still-rather-vague agreement apparently centred on the establishment of 'migration centres' across the EU and in Africa.

The presence of a deal – any deal – is being taken as bullish due to the major fault-lines within the EU and even within Germany and Chancellor Merkel's own party on this issue.

"We saw EURUSD reach a high of 1.1660 overnight... I have a hard time figuring out whether this will last," says Hardy.

For more on equities, commodities, forex, and the recent Fed stress tests on US banks, watch today's Morning Call in full.

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Energy sector (source: Bloomberg)

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