High Impact News: 23rd - 27th June 2025

⚠️ Geopolitical Risk Front & Center: Iran–Israel Escalation Deepens

Markets entered the week on edge as the Iran–Israel conflict reached a dangerous new phase.

Following U.S. airstrikes on Iranian nuclear facilities under “Operation Midnight Hammer,” tensions escalated with Iran launching additional ballistic missiles toward Israeli targets. While the military impact remains mixed, the symbolic retaliation and Iran’s legislative move to shut the Strait of Hormuz has drawn global attention. The strait accounts for roughly 20–30% of global seaborne oil.

Crude prices reacted sharply: Brent climbed toward $80, with markets now weighing the potential for $100+ scenarios should Hormuz face disruptions. Safe-haven flows sent gold higher, USD and CHF firmer, and equity indices lower on a risk-off shift. U.S. Fifth Fleet mobilization in the Persian Gulf has further raised the stakes.

Markets are watching closely for:
• Any formal closure or blockade of Hormuz
• Iranian military or proxy responses targeting regional or Western assets
• New positioning from global powers like China and Russia
• Changes in tanker routes, marine insurance premiums, or satellite-detected disruptions

For now, volatility remains event-driven. Traders should be prepared for intraday spikes, especially around energy, defence, and currency safe-havens.

Macro Data Outlook: Inflation & Growth Pulse Across the G7

Beyond geopolitics, this week is stacked with PMI readings, central bank speeches, and inflation prints from key economies.

📊 Monday, June 23: PMI Surprise in Europe & UK

The Eurozone and UK posted broad-based upside surprises in preliminary June PMIs:

🇪🇺 Composite PMI: 50.4 vs 49.0 expected
🇪🇺 Services PMI: 49.4 vs 47.5 expected
🇬🇧 Services PMI: 51.3 vs 50.9 expected

While still mixed overall, services sectors are showing more resilience than expected. This could challenge expectations of dovish pivots from the ECB or BoE unless confirmed by other data. EUR and GBP saw modest support post-release.

📌 Keep watch for President Lagarde’s speech later in the day for further ECB insight.

HIN-plantilla3 (3)-1

🗓️ Upcoming Events to Watch

🇺🇸 Tuesday & Wednesday: Fed Chair Powell Testimony

All eyes on Powell as markets reassess the Fed’s path amid softening services and firm core inflation. Markets are pricing in fewer rate cuts, any hawkish undertone could extend USD strength and pressure equities.

🇨🇦 Tuesday: CPI Data (May)

Core inflation will guide BOC policy outlook. A downside surprise may reinforce recent dovish signals and weigh on CAD.

🇦🇺 Wednesday: CPI (May)

Australia’s inflation trend remains key for RBA’s “higher-for-longer” stance. Risk to AUD on a miss.

🇺🇸 Thursday: Final Q1 GDP

Expected to stay at -0.2% annualized, confirming Q1 slowdown. Markets will be more reactive if revisions signal a sharper deceleration.

🇺🇸 Friday: Core PCE (May)

The Fed’s preferred inflation gauge. Consensus sits at +0.1% MoM and +2.6% YoY. This is the week’s most critical data point for risk assets, any upside surprise could push yields higher and dampen equities.

🇯🇵 Friday: Tokyo CPI (June)

Seen as a leading indicator for national CPI. Watch for JPY volatility, especially as the yen remains under pressure and BOJ intervention talk persists.

📌 Final Takeaway

This week is a blend of macro fundamentals and geopolitical risk. Markets remain headline-sensitive, especially to further developments in the Middle East. Traders should:

Stay nimble around event releases, particularly Powell’s testimony and U.S. Core PCE
Monitor energy markets for Hormuz-related price spikes or disruptions
Use FX and commodities as volatility proxies while risk sentiment remains fragile

We'll continue to monitor shifts and help you stay ahead of the next move.