Global markets are stabilizing after a turbulent week dominated by escalating then partially de-escalating US-Iran military tensions, with investors cautiously rotating back into risk assets as immediate war fears recede. The overnight session saw safe-haven flows reverse sharply: gold dropped over 0.8% to $2,340, while US equity futures rallied, with the S&P 500 up 0.65% and the Nasdaq 100 surging 0.85% on renewed enthusiasm for technology and growth stocks. The catalyst for the shift was news that US-Iran diplomatic channels have reopened, reducing the probability of near-term military escalation in the Persian Gulf region.

The currency markets reflected this risk-on pivot, with the US dollar gaining ground against safe-haven peers like the yen (USD/JPY +0.12% to 160.27) while easing slightly against the euro and pound. However, the dollar's overall strength persists due to relatively higher US yields and persistent geopolitical uncertainty that keeps some safe-haven bid intact. Oil markets remain caught in the crosscurrents: Brent crude (+0.45% to $82.35) and WTI (+0.35% to $78.20) traded in volatile ranges as investors weigh reduced immediate supply disruption risks against persistent concerns about Persian Gulf shipping lanes and Middle East infrastructure.

The technology sector is in focus today with anticipation building around the SpaceX mega-IPO, which is being watched as a critical test of investor appetite for high-valuation growth names amid elevated market volatility. The IPO comes as tech stocks attempt to recover from a 'June swoon,' with the Nasdaq 100 still working to regain momentum after recent weakness driven by profit-taking and concerns about AI infrastructure spending sustainability. Crypto assets are also participating in the risk-on rally, with Bitcoin (+1.89% to $63,342) and Ethereum (+1.36% to $1,664) posting solid gains as correlations with tech equities remain elevated.

European markets face a data-heavy session with UK monthly GDP, industrial production, and trade figures due at 06:00 ET, alongside French final CPI and eurozone industrial production. Consensus expects UK GDP to contract -0.1% m/m after 0.3% growth in April, which could weigh on sterling and UK equities if confirmed. German and French data will provide further insight into the health of the eurozone economy ahead of the next ECB policy meeting. In Asia, China's M2 Money Supply and New Loans data at 08:03 ET will be closely watched for signs of credit conditions and monetary policy effectiveness, with implications for commodity currencies like the Australian dollar.

The US session will be relatively quiet on the data front until the University of Michigan Consumer Sentiment preliminary reading at 14:00 ET, which will be scrutinized for any shifts in inflation expectations and consumer confidence that could influence Fed policy expectations. Current consensus expects a decline to 46.1 from 48.2, reflecting ongoing concerns about inflation and economic uncertainty. Fed officials remain in blackout ahead of the next FOMC meeting, limiting any policy commentary that could move markets.

The next 12-24 hours present several key risk events that could reverse the current risk-on sentiment or accelerate it further. First and foremost, any headlines regarding US-Iran relations remain the primary geopolitical wildcard: while diplomatic channels have reopened, the situation remains fragile, and any renewed military confrontation or breakdown in talks could trigger sharp safe-haven flows back into gold, the dollar, and Treasuries while pressuring equities and oil.

On the data front, UK monthly GDP at 06:00 ET is a high-impact release with consensus expecting a contraction of -0.1% after 0.3% growth in April. A worse-than-expected reading would raise concerns about the UK economy's trajectory and could weigh on sterling, potentially pushing GBP/USD below 1.3350 support. The accompanying industrial production, manufacturing, and trade data will provide additional color on the health of the UK economy. In the eurozone, industrial production data will offer insight into manufacturing momentum, which has been weak in recent months.

China's M2 Money Supply and New Loans data at 08:03 ET carry significant implications for commodity currencies and resource-linked equities. Consensus expects new loans of 450B yuan versus a -10B prior reading, which would signal improving credit conditions. However, any disappointment could weigh on the Australian dollar, copper, and other China-sensitive assets, while reinforcing concerns about the effectiveness of Chinese policy stimulus.

The University of Michigan Consumer Sentiment preliminary reading at 14:00 ET is the marquee US data release today, with particular focus on the inflation expectations component. Current forecasts call for sentiment to decline to 46.1 from 48.2, which would mark a further deterioration in consumer confidence. However, the inflation expectations reading is more critical for Fed policy: any material increase could reinforce expectations that the Fed will keep rates higher for longer, supporting the dollar and weighing on rate-sensitive equities and gold. Conversely, a drop in inflation expectations could fuel risk appetite and pressure the dollar.

Finally, the SpaceX IPO pricing and initial trading will be closely watched as a barometer of risk appetite for high-valuation, high-growth names. A strong debut would reinforce the narrative that investors remain willing to embrace risk despite recent volatility, potentially fueling further gains in tech-heavy indices like the Nasdaq 100. However, a weak reception or volatile trading could reignite concerns about frothy valuations and trigger renewed selling pressure in growth stocks.