Market Quick Take – 19 June 2025

Market drivers and catalysts

• Equities: Fed cautious, tech steady, Europe/Asia weak, geopolitics dominate
• Volatility: VIX dips pre-holiday, triple witching Friday, short-term risks
• Digital assets: Bitcoin/Ethereum steady, IBIT/ETHA down, Coinbase jumps
• Fixed Income: Mixed message from FOMC meeting sees mixed treasuries rally, then retreat
• Currencies: USD and JPY firm post-FOMC meeting.
• Commodities: Wheat and platinum jumps adding to overall strong commodity performance
• Macro events: Switzerland SNB Meeting, Norway Norges Bank Meeting, UK Bank of England meeting, US markets closed today

Macro data and headlines

• US President Trump says that he “may or may not” strike Iran as key US military assets, including the US Nimitz carrier group changed course from the South China sea to head toward the Middle East.
• The FOMC meeting delivered a mixed message, with some very modest adjustments to the policy statement suggesting very slightly less concern about the economic outlook than the previous statement (which was from May 7 and came only a few weeks after the Liberation Day swoon in markets and general sentiment. The new staff economic projections showed growth revisions revised lower for this year and next, with inflation revised higher for all of 2025-2027 and the Unemployment rate likewise revised slightly higher for 2025-2027 (to 4.5% for this year and next versus 4.4% and 4.3%, respectively). This suggests an uncomfortably stagflationary outlook that Fed policy will have a tough time addressing, hence little drama in rates markets, as the US treasuries initially rallied, only to end the day mostly unchanged. The dot plot of Fed forecasts for the appropriate policy rate suggested that two camps are forming among Fed members, those that forecast the rate should remain unchanged through the end of this year and those that believe at least two cuts will be appropriate. In the press conference, Fed Chair Powell stressed uncertainty and the need for patience, which kept anticipation of a July rate cut low.
• US housing starts fell 9.8% in May 2025 to 1.256 million units, below expectations of 1.36 million, marking the weakest level since May 2020. High mortgage rates and excess supply of homes dampened builder sentiment and construction activity.
• US weekly initial jobless claims dropped by 5,000 to 245,000 for the week ending June 14th, aligning with expectations and down slight from the 250k (revised up from 248k) of the prior week. The four week average hit 245k, the highest since August of 2023. Continuing claims were at 1,945,000, down 6k from the prior week’s three-year high, signalling a softening labour market amid economic uncertainty.

Macro calendar highlights (times in GMT)

0730 – Switzerland SNB Rate Announcement
0800 – Norway Norges Bank Rate Announcement
1100 – UK Bank of England Rate Announcement
1100 – Turkey One-Week Rate Announcement
US markets closed today for Juneteenth holiday
2330 – Japan May National CPI

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 stocks finished mixed on Wednesday as the Federal Reserve kept rates unchanged and Chair Powell struck a cautious tone. The S&P 500 and Dow ended slightly lower, while the Nasdaq eked out a small gain, with tech leading modest sector advances. Powell pointed to persistent inflation risks tied to Trump’s tariffs and trimmed growth forecasts, projecting only two cuts in 2025. Ongoing tensions in the Middle East and uncertainty over possible US military action in Iran kept investors risk-averse. Visa, Mastercard, and PayPal dropped over 4% after the Senate passed the stablecoin act; Coinbase surged 16% on regulatory optimism.
• Europe: European markets drifted lower Wednesday, weighed by cautious central bank signals and escalating Israel-Iran tensions. The Stoxx 50 and Stoxx 600 both fell 0.4%, with tech and industrials leading declines. Germany’s DAX shed 0.5%, while the FTSE 100 edged up 0.1% as UK inflation eased but remained above target. Attention turns to today’s Bank of England decision, where no change is expected, while Swiss and Norwegian rate moves are also in focus. Market sentiment remains fragile, with geopolitical headlines and monetary policy in the driver’s seat.
• UK: UK stocks ended Wednesday modestly higher, with the FTSE 100 up 0.1% after May inflation ticked down to 3.4%. While this was above the Bank of England’s 2% target, traders expect no rate change at today’s meeting. The higher inflation reading weighed on homebuilders and suppliers, but tech-focused names found support on the back of licensing deals and sector news. Geopolitics and monetary policy remain key themes for UK markets going into the second half of the week.
• Asia: Asian equities fell broadly Thursday, with Hong Kong’s Hang Seng down 1.9% and Japan’s Nikkei off 0.7%, as investors reacted to news that US officials are preparing for possible military action against Iran. Tech and consumer names led losses, while Australia’s ASX 200 was little changed following weaker jobs data. Risk appetite remains muted across the region as traders assess the impact of global rate decisions and escalating Middle East tensions. Chinese markets followed the broader trend, drifting lower on a lack of fresh policy signals and ongoing trade worries.

Volatility

Volatility retreated slightly Wednesday, with the VIX falling to 20.14 (–1.46) after the Fed held steady and ahead of today’s US market closure for Juneteenth. Volatility-of-vol (VVIX) dropped 8% to 106.20. With thin holiday liquidity, realized swings are likely to remain subdued until Friday’s “triple witching” options expiration, which could inject short-term noise as over $6 trillion in contracts roll off. Geopolitical uncertainty and options positioning may lead to a choppy session when trading resumes.

Digital Assets

Crypto markets stayed in tight ranges as Wall Street paused for Juneteenth. Bitcoin held above $104,900 and Ethereum traded near $2,523, both down less than 1% as risk sentiment cooled amid Fed caution and Middle East headlines. Spot ETF flows were quiet: BlackRock’s IBIT slipped 0.6% and ETHA fell 1.3% but both remain up double digits year-to-date. Crypto stocks were mixed, with Coinbase soaring 16% on regulatory progress while MicroStrategy fell 1.6%. Trump’s call for swift stablecoin regulation and muted profit-taking activity suggest long-term confidence is holding, but volatility could rise if macro risks intensify.

Fixed Income

• US Treasuries initially attempted to rally on the release of the FOMC statement and new staff projections, but the slightly stagflationary outlook (growth projections lowered while both inflation and unemployment projections were raised) kept treasury yields locked in the range and yields steadied to almost unchanged for the day.
• Japanese government bonds rallied overnight on the drop in US treasury yields, with the 10-year pushing three basis points lower to trade below 1.43%.

Commodities

• CBOT wheat jumped 4.4% on Wednesday, reaching a two-month high, in the process potentially challenging a downtrend going back three years. While the trigger has been heightened Middle East risks, and weather worries in parts of the US, Europe, and Russia, the driver is continued short covering from hedge funds who have held a net short continuously for a record three years.
• US natural gas futures trade up 13% on the week as forecasts for searing heat across the eastern half of the country signal a boost in cooling demand. A 95 bcf weekly stockpile increase left total stocks at 2,802 bcf, some 6% above the five-year average.
• Platinum’s year-to-date gain extended to 45%, with prices reaching an 11-year high after breaking above the 2021 high at USD 1,340. Prices have surged higher since late May after reports of tightening market conditions and increased investor demand amid a tired-looking gold market, resulting in the break of a 17-year downtrend.
• Crude maintains a 5–10-dollar risk premium that will only disappear when and if the market feels comfortable that the Middle East crisis will not impact supply from the region, especially through the important Strait of Hormuz where there are currently no signs of disruption. Focus on Washington and whether Trump will plunge the US into the conflict

Currencies

• The US dollar firmed yesterday after the FOMC meeting as an initial attempt to read the meeting as dovish was quickly unwound as the Fed economic projections are clearly in the direction of stagflation, which kept US yields elevated. EURUSD edged lower to trade nearly as low as 1.1450 overnight, while USDJPY was steadier around 145.00 as the JPY was more broadly resilient.
• The Australian dollar surged after a mixed Australian jobs report, which showed overall payrolls dipping slightly, but full time payrolls growing. AUDNZD rose above 1.0800, a level it has not closed above in more than three weeks.
• Three central bank meetings today, with Switzerland’s SNB offering the most potential for drama, as observers are split on whether the bank will cut the rate 50 basis points or 25 basis points, as the larger rate chop would take the policy rate to negative 0.25%, the first negative policy rate since the Bank of Japan raised its rate into positive territory early last year.

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