General Market Analysis – 13/06/25

US Stocks Push Higher on More Weak Inflation Data – S&P up 0.4%

The major US stock indices all pushed higher in trading yesterday as the week’s second inflation print again came in weaker than expected. The Dow and Nasdaq both rose 0.24%, as the S&P led the way, adding 0.38% by the close. The dollar dropped again to hit an annual low on the basket, trading down to levels not seen since early 2022, the DXY down 0.6% to 97.87. US Treasury yields dipped after the data, the 2-year finishing down 4.4 basis points at 3.908% and the benchmark 10-year down 6.1 basis points at 4.359%. Oil prices consolidated as traders evaluated the impact of increased Middle East tension, Brent up 0.69% to $70.25 and WTI down 0.16% to $68.04. Gold pushed higher again to hit a high for the month, closing up 0.81% at $3,384.05 an ounce.

Flight to Safety After Israel Airstrikes

Volatility has jumped today in the Asian trading sessions as news hit the market that Israel has launched strikes against Iran. Markets have reacted in typical fashion with haven trades jumping and a ‘risk-off’ sentiment hitting financial products. Oil contracts have jumped as the market swiftly prices higher risk premiums on the supply side, with Brent spiking as much as 8.6% and WTI up 7.9%. Gold has followed suit as the premier haven product, up 1.28% in the first session of the day alone, and has so far capped out just under the May highs. The market will now be attempting to evaluate how far this latest escalation will take markets, with Israel already calling its strikes preemptive and declaring a state of emergency in anticipation of retaliatory moves from Iran. Further military action in the region is expected to drive more haven trades in the coming sessions and days.

Focus on Geopolitics to Close Out the Trading Week

The macroeconomic calendar is relatively quiet on the final trading day of the week today, and investors are expecting geopolitical updates to dominate market sentiment. The Asian session has little scheduled on the calendar today, although there is the possibility that Chinese New Loans data may be released during the session, which could hit local markets. There is nothing of note again in the European session; however, the focus will be on US data again after the New York open, with influential Preliminary University of Michigan Consumer Sentiment (exp. 53.5) and Inflation Expectations (last 6.6%) data due out. However, overall, the market is expecting events in the Middle East to dominate into the weekend.

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