Market Quick Take – 20 June 2025

Market drivers and catalysts

• Equities: Geopolitical risks, cautious Fed, Europe slides, UK lags, Asia mixed
• Volatility: VIX elevated, triple witching, short-term swings likely
• Digital assets: Bitcoin steady, strong ETF inflows, low volatility
• Fixed Income: JGB market calm overnight after hot core May Japan CPI release
• Currencies: USD pushed back lower after post-FOMC bounce, JPY remains weak.
• Commodities: Investment metals succumb to profit taking, Crude fluctuations continue
• Macro events: US June Philadelphia Fed Business Outlook

Macro data and headlines

• Iran held direct talks with the US amid the Israel conflict, as reported by Reuters. Iran's Foreign Minister spoke with Trump's envoy, stating talks would resume if Israel stopped attacks. Trump demanded Iran end uranium enrichment. A diplomat mentioned Iran might be flexible on the nuclear issue if the US pressured Israel to stop the war.
• Japan’s consumer prices excluding fresh food accelerated for a third month to 3.7% YoY in May to a fresh two-year high. The report came ahead of a summer election where rising cost of living will be a key topic while the Bank of Japan ponders what to do with borrowing costs at 0.5%, the lowest among its global peers.
• SNB cut its policy rate by 25 bps to 0% in June 2025, due to easing inflation and a weak global outlook. Swiss consumer prices fell by 0.1% in May. The SNB forecasts inflation at 0.2% for 2025, 0.5% for 2026, and 0.7% for 2027. Swiss GDP grew in Q1 2025, aided by early US exports, but growth is expected to slow, with forecasts of 1% to 1.5% for 2025 and 2026. More below in Currencies on the SNB decision.
• Norges Bank cut its key rate by 25 bps to 4.25% in June 2025, defying expectations of a hold. The bank indicated more cuts could follow if the economy aligns with expectations, but uncertainty prevents committing to a specific path.
• BoE voted 6-3 to keep the Bank Rate at 4.25% in June, amid global uncertainty and inflation. Three members wanted a 0.25% cut. Inflation is expected to stay steady this year and ease next year, but risks include rising energy prices and potential US tariffs. UK GDP growth is weak, and the labour market is loosening.

Macro calendar highlights (times in GMT)

0600 – UK May Retail Sales
0600 – Germany May PPI
0640 – Japan Bank of Japan Governor Ueda to speak
0645 – France June Manufacturing Confidence
1230 – US June Philadelphia Fed Business Outlook
1400 – Eurozone June (Prelimenary) Consumer Confidence

Earnings events

• Today: Accenture, Kroger, Darden Restaurants

Next week

• Monday: Prosus, Naspers
• Tuesday: Fedex, Carnival Corporation
• Wednesday: Micron Technology, Paychex, Alimentation Couche-tard, General Mills
• Thursday: Nike, Hennes & Mauritz

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: US markets were closed Thursday for Juneteenth, but futures drifted lower as geopolitical risks dominated. Ongoing Israel-Iran strikes and reports that President Trump is considering US military involvement kept sentiment cautious. The Fed held rates steady this week and projected only two rate cuts in 2025, citing ongoing uncertainty around tariffs and inflation. Most S&P 500 sectors ended Wednesday in the red, led by energy, while tech stocks held up better. Market attention now shifts to today’s $6+ trillion triple witching expiry, which often brings a spike in volumes and short-term volatility.
• Europe: European stocks fell for a third day as escalating Middle East tensions and sticky US inflation weighed on sentiment. The Stoxx 600 dropped 0.8%, led by weakness in banks and consumer stocks. Germany’s DAX lost 1.1%, closing at its lowest since early May. The Bank of England kept rates unchanged but signaled a dovish tilt, while Switzerland cut rates again. Energy shares outperformed, while defensive names held firmer. Stora Enso jumped nearly 15% after announcing a review of its Swedish forest assets.
• UK: The FTSE 100 slipped 0.6% to 8,791, retreating for the second time in three sessions as the Bank of England kept rates steady. Consumer confidence hit its highest this year, but concerns lingered over energy prices and Middle East risks. Miners and banks dragged the index lower, with heavyweights like Barclays and NatWest both losing ground. Hays slumped to 2008 lows after an unscheduled profit warning. UK stocks remain up 7.6% year-to-date but have lost momentum since hitting record highs last week.
• Asia: Asian equities showed mixed performance. Hong Kong’s Hang Seng rebounded 1.2% after three days of losses but is still set for its largest weekly drop since April, pressured by Middle East tensions and China-US trade frictions. Japan’s Nikkei fell 1%, dragged by hot CPI data fueling expectations of a July rate hike. Tech shares outperformed in South Korea, with KOSPI up 1.1% on stimulus hopes. Elsewhere, Chinese shares edged higher after the PBOC kept lending rates unchanged.

Volatility

Volatility stayed elevated, with the VIX holding above 22 ahead of Friday’s triple witching expiry. US markets saw muted action during the Juneteenth holiday, but over $6 trillion in expiring options today could trigger sharp intraday swings. Despite higher headline volatility, the broader market remains less stressed than during April’s tariff panic. For long-term investors, triple witching volatility is usually short-lived and tends to fade once expiry-driven flows settle.

Digital Assets

Crypto markets were steady despite the US equity holiday. Bitcoin held near $104,500, Ether at $2,515. IBIT saw $104 million in new inflows, extending its positive streak and lifting assets above $70 billion. ETHA led Ethereum ETFs with $15.1 million in one-day inflows, turning total Ethereum ETF flows positive for the week. Ongoing institutional demand is helping keep volatility subdued, providing a supportive backdrop for long-term holders, even as sentiment among retail traders remains cautious.

Fixed Income

• Japanese government bonds shrugged off the hotter than expected Japan core CPI data for May, with the two-year JGB benchmark largely unchanged in a quiet session and the 10-year JGB benchmark yield edging slightly lower to challenge the 1.40% area, the lowest since early May.

Commodities

• The crude oil market remains volatile, with prices swinging within a wide range as traders digest a constant flow of news and developments in the Israel-Iran war. Brent touched a fresh five-month high near USD 80 on Thursday before retracing after fears of an imminent US attack eased, thereby allowing diplomacy another chance. A ten-dollar risk premium may evaporate on a solution, while an escalation leading to supply disruption could add ten dollars or more to current prices.
• Gold, silver, and platinum all suffered setbacks as traders booked profits after Wednesday’s FOMC meeting signalled no clear path to the next rate cut, with the Fed’s focus for now on the risk of higher tariff-related inflation. Gold has been looking tired for a while, raising the risk of a deeper correction, but without damaging an overall bullish setup, while silver needs to hold USD 35 support to avoid the risk of a fresh round of long liquidation. Platinum got rejected at the 2021 high at USD 1,340, potentially signalling a pause following a 45% year-to-date surge.

Currencies

• The US dollar attempt to firm after the FOMC meeting largely faltered late yesterday and overnight, with EURUSD rebounding back above 1.1500 to as high as 1.1532 overnight, while GBPUSD rose back toward 1.3500 at its highest overnight.
• USDJPY remained well above 145.00 and the JPY broadly weak, perhaps as the higher than expected Japanese CPI data reminds of the ugly negative real rate policy Japan is running.
• EURCHF rebounded above the key 0.9400 area after the SNB failed to take the larger rate cut option yesterday, cutting only 25 basis points to send the rate to zero, but hinting at more cutting to come and hence a negative policy rate. The centra bank also warned on its willingness to intervene in the currency market and said it would charge a negative 25 basis points on sight deposits at banks that rose above key thresholds, a measure that will discourage Swiss banks from accepting safe haven flows.

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