(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, June 24 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial

Markets

After a tentative ceasefire was announced in the Middle

East, U.S. crude, gold, Treasury yields and the dollar gave up

all gains registered since Israel's initial attack on Iran on

June 13.

Throughout this episode, energy market worries never

amounted to a true 'shock' as movements of oil were largely

unaffected. And given the large global supply overhang and

slowing world demand, annual U.S. oil price gains never

turned positive at any point over the past 12 days, failing even

to set a new high for 2025.

I'll discuss all of today's market news below and then move

away from the headlines to explain how plunging immigration and

the graying of America may be impacting the Federal Reserve's

view of the U.S. labor market.

Today's Market Minute

* Oil tumbled 4%, global shares surged and the dollar dropped on

Tuesday as U.S. President Donald Trump said a ceasefire between

Israel and Iran was in place.

* However, Israeli Defence Minister Israel Katz said on Tuesday

he had ordered the military to strike Tehran after Iran fired

missiles in violation of the ceasefire.

* Crude oil's sharp reversal of the Israel-Iran war premium

shows the power of a few words from a key player to move the

market, but ROI columnist Clyde Russell suggests the bigger

issue here may be who played silent: Iran's allies.

* Investors globally appear to be gradually reducing their

exposure to dollar-denominated assets, driving the greenback

down to its lowest level in years. ROI markets columnist Jamie

McGeever explores where most of this selling is coming from.

* Rapid growth in the installation of batteries is upending

power systems across the United States. ROI columnist Gavin

Maguire outlines the key battery system trends to track.

Oil, rates and the dollar tumble

Iran's token response to U.S. bombing of its nuclear

facilities over the weekend was a well-telegraphed missile

launch on U.S. bases in Qatar. That was quickly followed by U.S.

President Donald Trump's acknowledgement of Tehran's intent to

de-escalate and a call for a ceasefire that Israel said it would

abide by.

Whether that ceasefire will hold remains uncertain, with

some exchanges between Iran and Israel reported this morning and

the situation still tense.

But as it stands before Tuesday's U.S. open, crude is just

$66 per barrel - $12 below Monday's peak - and just slightly up

from a two-week low of $64.38 earlier in the session. In fact,

Oil is now down almost 18% year-over-year.

The S&P 500 rose 1% on Monday, and futures are up another 1%

before Tuesday's bell. The VIX volatility gauge is back

to where it was on June 12, just above 18, with the gold price

falling as well.

The dollar skidded lower too, with the euro

back within a whisker of 3-1/2-year highs and the yen

recovering all of Monday losses. European and Asia shares surged

more than 1% too.

Wall Street now switches attention back home to the Federal

Reserve, with Fed Chair Jerome Powell starting his two-day,

semi-annual congressional testimony today just as some of his

colleagues have stated turning remarkably dovish on the interest

rate outlook.

Trump clearly thinks the Fed should move immediately to

slash rates by "two to three points". The president has been

lambasting Powell on an almost daily basis for not doing so.

But Trump's appointees to the Fed board, Michelle Bowman and

Christopher Waller, are now both advocates of easing sooner

rather than later, opening up a big split between hawks and

doves at the central bank. As many as seven policymakers last

week indicated that they expected no rate cuts at all in 2025.

But Bowman, who recently was one of the most hawkish members

of the Fed's policy making council, electrified the rates market

on Monday by saying it's time to consider easing as soon as next

month.

"Should inflation pressures remain contained, I would

support lowering the policy rate as soon as our next meeting in

order to bring it closer to its neutral setting and to sustain a

healthy labor market," said Bowman, now Fed Vice Chair for

Supervision.

A parade of Fed speakers on Tuesday's slate could pour cold

water on that view, but many market players think there is some

jockeying for position going on at the central bank, with Trump

expected to soon announce his pick to replace Powell when the

Fed Chair's term expires next year.

Even though Fed futures markets are still only pricing in a

roughly 20% chance of a July cut, full year easing bets rose

almost 10 basis points to near 60 bp after the Bowman comments

and oil price retreat.

Treasury yields responded quickly to the rate signals and

energy relief, even with another heavy week of debt sales

kicking off on Tuesday with $69 billion of 2-year notes up for

grabs.

Benchmark 10-year yields plunged below 4.3% for

the first time in six weeks on Monday, though they've nudged

back above that level again before today's bell.

Elsewhere on Monday, Tesla shares jumped over

9%after the electric-vehicle maker started testing its

long-awaited robotaxi service, which CEO Elon Musk has touted as

a driver of Tesla's lofty valuation.

US migrant halt may wipe potential job growth

If you're wondering why so many U.S. Federal Reserve

officials are remaining hawkish despite slowing growth, consider

how the dramatic drop in immigration and the graying of America

are impacting the unfolding labor market picture.

Often overlooked by markets focused on the latest news about

tariffs, geopolitics and energy markets, curtailing illegal

immigration, a signature policy of President Donald Trump, is

now starting to move the needle on the U.S. jobs outlook.

The flow of migrant workers into the U.S. has effectively

halted over the past year. The pace was already slowing sharply

before the election but has ground to a near halt along with the

rise in deportations this year. Couple that with the steadily

aging population of existing workers, and it looks like a labor

crunch could be on the horizon.

Economists at Barclays tracking these trends reckon that

'potential' non-farm private payrolls growth - or the level of

extra jobs that can be created without leading to worker

shortages - could fall to less than 10,000 per month by the end

of next year from more than 100,000 today.

They estimate that potential job growth will fall to about

60,000 within the next six months, slowing potential economic

growth to only 1.4-1.6% year-on-year through next year from just

over 2% now.

These numbers are pretty stark when considering that average

monthly private payrolls growth has been around 172,000 over the

past two years.

Meanwhile, Barclays says it expects the effects of

population ageing to "intensify very soon", putting even more

downward pressure on jobs growth.

The combined impact of the two forces is "about to create

significant and persistent headwinds to potential growth in the

labor force and economic activity," it said.

The ingredients used to make the forecast are sobering.

FLATLINING PAYROLL POTENTIAL

U.S. immigration surged over the past three years, adding a

net 3-4 million to the U.S. population. The roughly 2 million

new workers are four times the annual rate of the immediate

pre-pandemic years. These were mostly asylum-seeking or

'humanitarian' cases given temporary authorization to live and

work in the U.S.

In fact, over the past two years, Barclays estimated that

about three quarters of average monthly private jobs gains of

almost 180,000 were filled by migrant workers.

But since last summer, net inflows of humanitarian migrants

have fallen to nearly zero. And, on top of that, the Barclays

tracker estimated current deportations to be running at about

10,000 a month.

On the flipside, U.S. census projections expect the

population to decline by about 50,000 in 2026 and 100,000 in

2027. The aging of the population should also cause the labor

force to shrink by about 360,000 this year and next,

accelerating thereafter.

Tweaking the underlying assumptions leads to different

outcomes, of course, but Barclays' central conclusion is that

potential payroll growth should essentially flatline in the

coming years, weighing on potential GDP growth.

Morgan Stanley also revised down net immigration estimates

to a near halt this year and next, although it expects higher

payroll 'breakevens' of 70,000 in 2025 and 2026.

FED HEADACHE

For the Fed, an unfolding economic slowdown, compounded by a

demand hit from trade war uncertainties, may be arguments for

easing policy now.

Trump clearly thinks it should move immediately to slash

rates, and his appointees to the Fed board, Michelle Bowman and

Christopher Waller, are both now advocates of easing sooner

rather than later.

But if worker shortages are the problem, then that creates a

very different problem for the Fed. In that scenario, the Fed's

full employment mandate would not be at risk, but wage pressures

could aggravate still above-target price inflation.

With tariff hikes already fogging up the inflation horizon,

it's therefore not surprising that seven Fed policymakers

anticipate keeping the central bank's main borrowing rate steady

through the rest of this year at least.

A hit to the labor force then could cause growth to slow,

even as the employment rate stays low and inflation pressures

simmer.

Fed inertia may be warranted if that transpires.

Chart of the day

The oil market registered relatively few signs of alarm during a

fortnight of intense aerial warfare between Israel and Iran that

included this weekend's U.S. bombing of the latter's nuclear

installations. In the context of the last 35 years of sharp oil

price movements, this episode has been minor - so far at least.

Today's events to watch

* U.S. Q1 current account (8:30 EDT), April house prices (9:00

EDT), June consumer confidence (10:00 EDT), Richmond Federal

Reserve June business surveys (10:00 EDT)

* Fed Chair Jerome Powell delivers semi-annual monetary policy

testimony before House Financial Services Committee (9:00 EDT)

* New York Fed President John Williams, Cleveland Fed President

Beth Hammack, Boston Fed President Susan Collins, Minneapolis

Fed chief Neel Kashkari and Kansas City Fed boss Jeff Schmid all

speak; European Central Bank President Christine Lagarde, ECB

Vice President Luis de Guindos and ECB chief economist Philip

Lane speak; Bank of England Governor Andrew Bailey, Deputy

Governor Dave Ramsden and BoE policymaker Megan Greene speak

* U.S. Treasury sells $69 billion 2-year notes

* U.S. corporate earnings: FedEx, Carnival

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.