I guess the sand has started flying… Israel’s strike on Iran sent oil prices in a monster straight line up, reversed some selling in the US dollar, lifted gold prices and sent stocks lower with European indices dropping early Friday and US stock futures sliding 1%-2%. Crypto markets fell in tandem with equities - I guess gold is still the safe haven, while bitcoin remains a speculative play.

To be fair, Trump did on April 11th give Iran 60 days or face military action. I’m never sure about geopolitical tensions - usually it’s a short-term impact and markets always ride it out in the end. If there’s serious escalation by way of Iran's response I guess it continues to weigh on risk, but like everything else it’s usually discounted pretty quick.

But there is likely higher risk premium baked in for oil which is inflationary and therefore feeds into risk assets via, chiefly, what central banks do. Crude oil prices spiked as much as 13% to a $78.50 high in Brent before retracing some of their early gains ...oil is the most obvious reaction channel.

On that front Donald Trump said that he may “have to force” Fed Chair Powell to cut interest rates, calling the Fed Reserve Chair a “numbskull” for not cutting rates. Earlier this week, Vice President JD Vance called the Fed not lower rates more as “monetary malpractice”. After yesterday’s weak jobless claims data, the odds for a rate cut at next week’s FOMC meeting remain zero, while odds of a July cut have shifted higher to slightly above 25%.

On the data front informing policy decisions, US initial jobless claims stayed at 248,000 in early June, above the expected 240,000, while continued claims jumped to 1.956 million, the highest since the end of 2021 and together with a slowdown in hiring, it suggests that out-of-work people are struggling to find employment. US producer prices increased 0.1% in May 2025, below the forecasted 0.2%. Goods prices rose 0.2%, with tobacco up 0.9%, while jet fuel fell 8.2%. Service costs edged up 0.1%, with machinery and vehicle wholesaling margins rising 2.9%.

Meanwhile Boeing shares slumped after the Air India crash. While it’s too early to determine the cause, the fact that this is the first crash involving a 787 raises serious concerns. If a manufacturing flaw is to blame, it would be a major setback for Boeing, which has been working hard to rebuild its safety record after the two fatal 737 Max crashes in 2018 and 2019. The incident threatens to undermine recent progress in restoring investor and public confidence. Shares fell almost 5% but off the lows. If Boeing is found at fault, losses could deepen significantly - potentially wiping out 20% of its value.