Headlines

• Middle East Tensions Rise: Things are heating up between Israel and Iran. President Donald Trump has called for people to leave Tehran (Iran's capital), and he even left a big meeting (the G7 summit) early because of these rising tensions.
• Stock Market Jitters: Because of this increased global worry, many stock markets around the world saw a dip overnight. People are getting more cautious, selling off some investments.
• Dollar Stays Strong: Despite the general nervousness, the US Dollar is holding its ground. When global risks increase, investors often see the dollar as a "safe place" for their money.
• Japan's Bank Holds Steady: Japan's central bank (the Bank of Japan) decided to keep its interest rates at 0.50%. The head of the bank, Mr. Ueda, sounded like he's not in a hurry to make

Market Recap:

Markets saw improved sentiment yesterday, driven by positive developments on two fronts:

• Middle East De-escalation Hopes: Risk aversion eased significantly after reports emerged from the Wall Street Journal suggesting Iran is looking to de-escalate hostilities with Israel and potentially restart nuclear talks. This news led to:

-Weaker Dollar & Oil: The US Dollar, which had gained as a safe haven, gave back some of its strength. Oil prices also retreated after an initial morning spike, as fears of a wider conflict in the Middle East lessened.

-Equities Rebound: European and US equity futures are pointing to a positive start, indicating a recovery in market confidence.

• G7 Summit Progress on Trade: Leaders at the G7 summit in Canada began their meetings, with President Trump and Canadian Prime Minister Mark Carney signaling a willingness to work together towards a trade deal. This constructive dialogue is a positive sign for global trade relations.



In summary, hopes for a contained Middle East conflict are easing market anxieties, while constructive talks at the G7 summit are also contributing to improved sentiment.

Today’s Market Update:

Markets have started the day with a cautious tone, as global events continue to shape investor sentiment.

• Middle East Escalation & Market Impact: The conflict between Israel and Iran intensified over the weekend. President Trump's call for an evacuation of Tehran and his early departure from the G7 summit underscore the gravity of the situation. While initial oil price spikes eased, the ongoing tensions maintain a degree of uncertainty. Despite this escalation, currency markets are showing muted reactions, and stock futures suggest a potentially positive start in Europe and the US.
• Key Economic Data Today: Our attention turns to the US Retail Sales report, expected later today. Forecasts indicate a monthly decline, likely reflecting the impact of ongoing tariff uncertainty on consumer spending. This data will be closely watched for insights into the health of the US consumer.
• Bank of Japan Holds Rates: Overnight, the Bank of Japan (BoJ) kept its interest rates steady at 0.50%, as widely anticipated. The BoJ also announced a slower pace of bond purchase reductions from April 2026. Governor Ueda emphasized global uncertainty and balanced risks to the BoJ's future rate path.

In summary, while geopolitical tensions remain a significant concern, market reactions are somewhat contained. Today's US retail sales data will provide crucial insights, following the Bank of Japan's steady rate decision.

17th June 2025

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