Morning Brew June 19 2025

Good morning,

Fed inconclusive, Middle Eastand SNB in focus

The FOMC left rates unchanged as expected yesterday and maintained the view of two rate cuts this year but also projects higher inflation due to tariffs. As

The Fed keeps rates steady but pencils in two cuts by end of 2025; Powell sees 'meaningful' inflation ahead. Unemployment is seen to rise to 4.5% which – given the Feds dual mandate – leaves he way to cuts open. Powell also stressed that the path is not set in stone: "No one holds these ... rate paths with a great deal of conviction, and everyone would agree that they're all going to be data-dependent,"

Looking at the end of day rates, US Indexes were extremely boring, the Dow Jones lost 44.14 points, or 0.10%, the S&P 500 1.85 points, or 0.03%, to 5,981 and the Nasdaq Composite gained 25 points. The intraday swings were more interesting and there were quite some individual moves: Visa, Mastercard, and PayPal fell over 4% after Congress passed the stablecoins act while Coinbase gained 16.3%.

10 Year yields are little changed at 4.39, EURUSD is 1.14665, GBPUSD 1.3402, USDJPY 145.11. Gold and Silver are lower at 3371 and 36.72, Platinum is approaching key resistance at 1350, we are now at 1340.

Ole Pots out: 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

The Middle East remains fragile, Israel and Iran exchange fire while the US position remains unclear. Trumps seems to uncertain how his MAGA crows sees a direct involvement and eloquently stated 'I may do it. I may not do it,' Trump says on joining attacks.

Today, we are expecting the Swiss National Bank and the Bank of England. Will the SNB go so far to cut by 50 Bais points? Low inflation and strong franc would make it easy to justify but it would rattle savers.

Due to the US Holiday, it is likely to be a calm or rather erratic day.

Markets rattled by oil. Here’s how smart traders are positioning with options

Oil market volatility has surged in response to the latest Middle East conflict, presenting a window of opportunity for tactical options traders. This article explores three defined-risk strategies -bullish, neutral, and bearish- using XOP options to help active investors position for different outcomes without overexposing their portfolios.

Markets rattled by oil. Here’s how smart traders are positioning with options | Saxo

Thursday

• US Holiday
• Switzerland, Sweden UK, Turkey Rate decisions

   

  Friday

• Japan Inflation
• China Rate decision
• UK Retail Sales