Market Quick Take – 23 June 2025

Market drivers and catalysts

• Equities: US-Iran tensions, stocks down, tech lags, triple witching
• Volatility: VIX above 20, volatility high, options dilemma, Iran risk
• Digital assets: Bitcoin <$101k, ETH weak, ETF outflows, macro-sensitive
• Fixed Income: Japan announces long bond issuance ahead of auction
• Currencies: USD rallies on risk aversion, JPY weakens most on changes to JGB issuance
• Commodities: Muted crude response to US attack with focus on Iran’s next move. London copper squeeze continues
• Macro events: June Preliminary PMIs from Europe and the US

Macro data and headlines

• US President Trump announced the initiation of "Operation Midnight Hammer," which included targeted attacks on Iran's nuclear sites at Fordow, Natanz, and Isfahan. He cautioned that additional targets are still under consideration, stressing that while the US does not seek regime change, it is prepared to conduct more extensive strikes if Iran does not pursue diplomatic engagement. Later, Trump social media posts suggested that regime change may happen.
• Iran's parliament reached a unanimous consensus in favor of closing the Strait of Hormuz after US strikes on nuclear facilities, pending security body approval. US Secretary of State Rubio warned it would be "economic suicide" for Iran but is a credible escalation. Yet the final decision lies with the Supreme National Security Council – Iran's highest security body.
• The US June Philadelphia Fed Manufacturing Index remained unchanged at -4.0 in June 2025, matching May's figure and missing market expectations of -1. This suggests continued subdued manufacturing activity in the region, with signs of slowing demand and weakening labour market conditions.
• Preliminary estimates indicate Canadian retail sales likely fell by 1.1% in May 2025, marking the steepest decline since March 2023. This suggests increased tariffs from the United States are prompting consumers to reduce spending.
• FDI in China dropped 13.2% year-on-year to CNY 358.19 billion (USD 49.88 billion) from January to May 2025. Manufacturing attracted CNY 91.52 billion, services CNY 259.64 billion, and high-tech industries CNY 109.04 billion, with notable growth in e-commerce services (146%), aerospace and equipment manufacturing (74.9%), chemical pharmaceutical manufacturing (59.2%), and medical equipment manufacturing (20%).

Macro calendar highlights (times in GMT)

June PMIs from France (0715), Germany (0730), Eurozone (0800), and the UK (0830)
1345 – US June PMI
1400 – US May Existing Home Sales
1900 – CFTC Weekly Commitment of Traders Data (delayed from Friday)

Central bank speakers: Fed’s Waller (0700), ECB’s Lagarde (1300), Fed’s Bowman (1400), ECB’s Nagel (1500), Fed’s Goolsbee (1710) & Williams, Kugler (1830)

Earnings events

• Today: 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 ended last week on a cautious note, with the S&P 500 down 0.2%, Nasdaq falling 0.5%, and the Dow rising 0.1%. Markets were rattled by escalating tensions in the Middle East, as the US launched strikes on Iranian nuclear sites over the weekend. Futures opened lower Monday, with oil prices jumping on fears of supply disruption. Uncertainty about Iran’s response and the potential for broader conflict is the main market driver. Technology stocks led declines, while defensive names outperformed. Trading volumes were elevated due to Friday’s triple witching.
• Europe: European equities rebounded Friday after a three-day decline, with the STOXX 50 up 0.6%, DAX up 1.3%, and CAC 40 gaining 0.5%. Markets reacted positively to signs of diplomatic talks with Iran but remain wary after US airstrikes over the weekend. Insurance and travel sectors led gains, while energy lagged. Monday’s open looks soft, with futures pointing lower as investors monitor developments in the Middle East and await PMI data.
• UK: The FTSE 100 fell 0.2% Friday, underperforming Europe due to weak retail sales and declines in oil and drug stocks. For the week, the FTSE 100 dropped 0.9%. Hopes for Middle East diplomacy helped limit losses, but consumer confidence and profit warnings weighed on sentiment. Monday is set for a weak open amid global risk-off moves and renewed oil market volatility.
• Asia: Asian markets opened lower as US-Iran tensions escalated. Japan’s Nikkei lost 0.5% despite upbeat PMI data. Hong Kong fell 0.4% on liquidity concerns and geopolitical jitters. South Korea’s KOSPI dropped 0.6% after hitting a 3.5-year high last week, with foreign outflows and export worries adding to pressure. Markets remain on edge for potential retaliation and the risk of oil supply disruptions via the Strait of Hormuz.

Volatility

Volatility spiked last week but eased into Friday’s close. The VIX finished at 20.62, below recent highs but above its long-term average. Front-month VIX futures remain elevated, signaling markets expect more turbulence. Options traders face a dilemma: selling vol risks being blindsided by escalation, while buying vol may bleed premium if actual moves stay muted. Uncertainty over Iran’s response and shifting Fed expectations will keep volatility in focus.

Digital Assets

Bitcoin retreated below $101k over the weekend as the US-Iran conflict hurt risk appetite, breaking its June range. Ether slipped to $2,250, with most major altcoins following suit. Spot crypto ETFs (IBIT, ETHA) saw mild outflows, but institutional interest remains solid for the quarter. Crypto stocks (COIN, MSTR) were mixed. The market remains sensitive to geopolitical news and Fed policy signals, with upcoming Powell testimony in focus.

Fixed Income

• US Treasury yields rose slightly after the US bombings of Iran’s nuclear facilities over the weekend, with the two-year US Treasury benchmark up about a basis point to 3.92% and the 10-year benchmark up about 2 basis points to 4.39%, still within the recent range.
• Japanese government bond yields saw little volatility despite Japan’s Ministry of Finance announcing plans to restrain issuance of 20-, 30- and 40-year bonds by about JPY 3.2 trillion (about USD 22 billion) through next March to avoid issues with the market’s ability to absorb issuance. The news was absorbed more dramatically in the Japanese yen (see below under Currencies)
• Despite the weak risk sentiment in equities heading into the weekend, US high yield bonds were in the demand, with the Bloomberg measure of US high yield credit spreads to US Treasuries 5 basis points tighter to 299 basis points.

Commodities

• Crude prices jumped on opening in response to the US weekend attack on Iran, with traders worried about potential disruptions to the supply of crude and gas through the Strait of Hormuz. However, Brent trades back below USD 80 after being rejected ahead of resistance above USD 82, and it's worth noting that the current geopolitical risk premium—now exceeding USD 10 per barrel—cannot be sustained for long without a tangible supply disruption. Absent that price gains may struggle to hold. The market now nervously awaits an Iranian response, and how it may impact the energy market and wider markets.
• The London Metal Exchange is experiencing a copper squeeze with spot contracts spiking, amid an ongoing inventory decline, down to a two-year low amid an ongoing rush to ship metal to the US ahead of an expected tariff announcement, as well as demand from China. On Friday, the cash to 3's spread closed at USD 275 backwardation, the highest since November 2021
• Just like crude, gold prices also rose on the Asian opening, almost reaching USD 3,400 before drifting lower amid the risk of energy-related inflation reducing chances of gold-supportive rate cuts from the Fed, which may opt to hold rates at current relatively high levels, potentially strengthening the US dollar at the same time.

Currencies

• The US dollar firmed across the board on the risk aversion sparked by the US bombing of Iran’s nuclear facilities 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.
• JPY weakened sharply overnight on Japan’s ministry of finance altering its long JGB issuance plans just ahead of a 20-year bond auction tomorrow (see above under fixed income) as USDJPY rose to 147.00 and EURJPY posted a new high since July of last year just below 169.00.
• The Australian dollar and New Zealand dollar vied for weakest G10 currency status overnight as both dropped sharply on the risk aversion sparked by the US bombings in Iran, with AUDUSD trading as low as 0.6400 for the first time in over a month.

For a global look at markets – go to Inspiration.