Oil back to pre-conflict levels; US payrolls this week

Research evidence excerpt

Oil back to pre-conflict levels; US payrolls this week

Deutsche Bank

Research

Economics Date

DBDaily 29 June 2026

Oil back to pre-conflict levels; US payrolls this

Phil Odonaghoe week

Economist

+61-2-8258-1606

Europe’s second China shock; why the

‘Infrastrukturzukunftsgesetz’ is good news for Germany

US equities were steady Friday, S&P unchanged, though NASDAQ down 0.2%.

Over the week: S&P 2% lower, NASDAQ 4.6% lower. US10yr yields down 2bps to

4.37%, down 8bps over the week. Oil down 4.3% to USD71.99/bbl (Brent) on

Friday, closing at lowest since 26 February, i.e. prior to the start of the US-Iran

conflict on 28 February, and down 10.6% over the week.

Michigan consumer sentiment revised up 0.6pts to 49.5 in final read for June,

driven by expectations. 5-10yr ahead inflation revised down 0.1ppts to 3.3%.

Japan Tokyo CPI beat, up 1.7%yoy at the headline, consensus at 1.6%. Core-core

at 1.9%, consensus at 1.8%.

Fed’s Kashkari: Seeing “some signs of life” in the US labour market, “concerned”

about services inflation, has one rate hike penciled in for 2026, on hold in 2027.

US inflation chartbook. Justin Weidner expects US core inflation to track roughly

sideways over the next year, with tariff price level effects beginning to roll off, but

little signs of disinflation elsewhere.

Steven Zeng shows that after controlling for macro factors, the 10s-30s US

Treasury curve flattens on average around quarter-end, with bigger moves

associated with larger pension flows. For the June quarter end, Steven estimates

that defined benefit pension plans would need to buy $44.4bn fixed income. This

falls between the 50th and 75th historical percentiles, suggesting a modestly

stronger flattening bias in 10s-30s.

Europe’s second China shock. The first was when China joined the WTO in 2001,