Forex Daily Market Analysis from ForexMart

Iran attacks exacerbate oil crisis: S&P 500 freezes ahead of key US data

Markets on Edge: Investors Brace for Sell-Off After US Strike on Iran
Financial markets are on alert this Monday as investors anticipate a sharp downturn following a US military strike on Iran over the weekend. The potential for retaliation and a surge in oil prices is weighing heavily on global sentiment.

Middle East Tensions Eclipse Economic Reports
The escalating crisis in the Middle East has overtaken the release of US economic data as the primary focus for investors. The unexpected move by President Donald Trump to back Israel's military campaign against Iran has heightened concerns over market volatility, inflation trends, and the Federal Reserve's next steps on interest rates.

S&P 500 Stalls Below Record Highs
The S&P 500 index, while rebounding from early April losses, remains approximately 2.7 percent below its February peak. Despite nearing the 5 percent threshold from its previous high over the past 27 trading sessions, it has yet to reach a new record.

Oil Prices Climb, Markets Hold Their Breath
The growing conflict between Israel and Iran has already driven oil prices higher. Though equities have remained relatively stable so far, market participants remain wary. A sustained rise in energy prices could fuel inflation and disrupt the Fed's expected path toward interest rate cuts.

Fed Holds Rates Steady, But Leaves the Door Open to Cuts
During its Wednesday meeting, the US Federal Reserve kept interest rates unchanged. Policymakers signaled that borrowing costs could still decline later this year, though the expected pace of rate cuts is likely to be slower than projected in March. Officials pointed to anticipated inflationary pressure, potentially fueled by President Donald Trump's tariff plans, as a reason for the revised outlook.

A Data-Heavy Week Ahead for US Markets
Investors are bracing for a flood of key economic reports. Monday brings updates on US business activity and home sales. Consumer confidence figures are set for release on Tuesday, followed by Friday's PCE price index, the Fed's preferred measure of inflation.

Consumers Cautious, But Sentiment May Be Rebounding
US consumer confidence has dipped in recent months amid fears that tariffs could push the economy toward recession and stoke inflation. However, with inflation remaining tame and the US-China trade conflict showing signs of de-escalation, market participants are hoping for a rebound in household sentiment.

European Stocks Struggle for Direction Amid Middle East Escalation
European markets opened the week with mixed performance, as rising geopolitical tensions weighed on investor mood. The joint US-Israeli strikes on Iran's nuclear facilities over the weekend introduced fresh uncertainty into an already fragile global landscape.

Key European Indices:
STOXX 600: down 0.01 percent to 536.57 points;
Germany (DAX): down 0.1 percent;
France (CAC 40): down 0.1 percent;
Spain (IBEX): up 0.1 percent;
United Kingdom (FTSE): up 0.04 percent.
Deadline Nears: Trade Talks Falter as Tariff Expiry Looms
With the July 8 deadline to lift US tariffs approaching, negotiations with Washington appear to have stalled. Hopes for a breakthrough are fading, adding to market uncertainty.

Eurozone Growth Stalls Again in June
Economic momentum across the eurozone remained stagnant for the second consecutive month. According to a report released Monday, the service sector — typically the driving force of the region's economy — showed only modest improvement. Meanwhile, manufacturing activity registered no change at all.

UK Sees Modest Rebound in Business Activity
In contrast, the United Kingdom posted a slight uptick in business activity for June, offering a tentative sign that the domestic economy may be stabilizing.

Tech and Energy Lead Market Gains
Technology stocks led the advance across European markets, climbing 0.6 percent. The energy sector followed with a 0.3 percent gain, fueled by rising oil prices amid renewed concerns over supply disruptions following strikes on Iranian facilities.

Defense Sector Under Pressure
Shares in the European aerospace and defense industry declined by 0.9 percent, as investor sentiment shifted in light of escalating tensions and market volatility.

Corporate Headlines: Mergers, Divestitures, and Clinical Results
Spectris soared by 14.9 percent after private equity firm Advent announced its intention to acquire the scientific instruments manufacturer in a deal valued at 4.4 billion pounds;
Holcim gained 11.1 percent after the Swiss construction materials giant completed the spin-off of its North American division, Amrize, marking a key step in its restructuring strategy;
Novo Nordisk declined by 2.8 percent following the release of full results from late-stage clinical trials of its experimental weight-loss drug, CagriSema. Despite reaching this advanced phase, the market's reaction was tepid;
UCB advanced 4.4 percent after Morgan Stanley upgraded the Belgian biopharmaceutical company's rating from "equal weight" to "overweight," citing improved growth prospects

 

Iran-Israel peace hint rattles markets: What's happening to oil, gold and currencies

Global Markets Rally as Oil Tumbles Amid Middle East Tensions
Global equity markets ended Monday on a high note, shaking off concerns over growing tensions in the Middle East. Investors appeared unfazed by Iran's retaliatory strikes on US military facilities in Qatar, focusing instead on broader market momentum. Meanwhile, oil prices plummeted following recent highs not seen in months.

Iran's Strikes Seen as Controlled Move
Tehran's decision to launch airstrikes on American bases in Qatar sent ripples through geopolitical circles, but the market response was surprisingly calm. According to a senior regional source, Iran had informed the United States through diplomatic channels ahead of the attack — a move interpreted as a bid to de-escalate the situation rather than provoke further conflict.

Oil Slides Sharply After Reaching Recent Peaks
Oil benchmarks, which had recently surged to five-month highs, reversed direction sharply on Monday.

Brent crude dropped by 7.2% to close at 71.48 dollars per barrel, while WTI fell by the same margin to 68.51 dollars.

Index Performance Recap
Despite geopolitical uncertainty, Wall Street closed in the green:

Dow Jones: +0.89% to 42,581.78;
S&P 500: +0.96% to 6,025.17;
Nasdaq Composite: +0.94% to 19,630.98.
In Europe:

STOXX 600: -0.28%.
Across Asian markets:

MSCI Asia Pacific (excluding Japan): -0.70%.
The broader MSCI World Index gained 0.49%, reflecting a more optimistic global investment climate.

Fed's Bowman Hints at Rate Cuts as Labor Market Risks Rise
Federal Reserve Vice Chair for Supervision Michelle Bowman suggested on Monday that the US central bank may be approaching a point where lowering interest rates becomes appropriate. Her growing concern about labor market vulnerabilities appears to be overtaking previous fears about persistent inflation driven by high import tariffs.

Her comments prompted a swift reaction in financial markets, especially among currency traders.

Mixed Signals on Currency Markets
Following Bowman's remarks, the US dollar posted mixed results. It rose slightly against the Japanese yen by 0.08 percent to reach 146.15 but declined by 0.68 percent versus the Swiss franc, settling at 0.81260. The euro recovered from earlier losses and gained 0.49 percent to reach 1.157675 dollars.

The dollar index, which tracks the greenback against a basket of major currencies, slipped by 0.5 percent to 98.39.

Gold Prices Rebound After Early Losses
Precious metals saw upward momentum as well. Spot gold rose by 0.23 percent to 3375.71 dollars per ounce, while US gold futures advanced by 0.3 percent to 3395 dollars.

European Stocks Rally on Truce Announcement
Investor sentiment soared across European markets on Tuesday after former US President Donald Trump announced a ceasefire agreement between Iran and Israel. The news was greeted with relief by traders, boosting appetite for risk across global exchanges.

The STOXX 600, a broad gauge of European equities, rose by 1.4 percent to 542.6 points. Germany's DAX index led the gains with an increase of nearly 2 percent.

Israeli Prime Minister Benjamin Netanyahu confirmed that his government accepted the US-brokered ceasefire proposal.

Oil Drops to Two-Week Lows as Supply Fears Fade, Gold Retreats on Risk Appetite
Oil prices fell to their lowest levels in two weeks amid a noticeable decline in supply-related concerns. Meanwhile, investor appetite for riskier assets pushed gold prices down to nearly two-week lows, signaling a broader shift in market sentiment.

Market Split: Energy Slips While Travel Stocks Surge
Sectors responded differently to the shifting market dynamics. Energy shares declined by 3.5 percent, reflecting the weakness in oil prices. In contrast, travel and leisure stocks rallied, rising by 4.3 percent, supported by growing investor optimism about global economic resilience and consumer demand.

AstraZeneca Gains as Lung Cancer Drug Gets US Approval
Shares of UK-based pharmaceutical giant AstraZeneca rose by 1.3 percent after the company, alongside its Japanese partner Daiichi Sankyo, received approval from US regulators for their precision lung cancer treatment, Datroway. The approval is seen as a significant milestone in the company's oncology pipelines.

Spotlight on Powell's Congressional Testimony
Investor attention is now focused on upcoming remarks by Federal Reserve Chair Jerome Powell before the US Congress. His testimony is expected to provide crucial clues about the central bank's policy direction and could influence financial markets in the short term.

 

The main events by the morning: June 25

Russian oil has broken two records at once: a record high price and record low imports. The cost of a barrel of Urals crude oil last week exceeded $68, which was the highest since January. Now the price of Russian oil has dropped to $65-$65.23 per barrel. At the same time, shipments fell to a minimum in 2 months — 220 thousand barrels per day. During the week, this figure decreased by 4%.

The duty on wheat exports from Russia has been reduced 2.3 times since June 25. Now the duty rate is 248.3 rubles against 566 rubles per ton a week earlier, the Ministry of Agriculture said. The duty on barley will once again be zero, and on corn it will decrease to 358.1 rubles from 397.3 rubles per ton. The new rates will be valid until July 1.

Some American media outlets claim that the United States has failed to destroy Iran's nuclear program. CNN, citing U.S. intelligence, notes that the main components of the country's nuclear program have not been destroyed. The US attack most likely only set the nuclear program back a few months. Trump critically disagrees with the intelligence data and publicly defends the success of the attack on Iran.

China has become more interested in building the Power of Siberia-2 amid the conflict between Iran and Israel. It showed that oil supplies from the Middle East may not be so reliable, and China needs stable alternatives. However, the problem is that China is trying to promote not very favorable conditions for the Russian Federation and purchase gas at almost the same price at which it is sold on the Russian domestic market.

The UK will spend the proceeds from the Russian frozen assets on missiles for Ukraine. The country will supply 350 latest air defense missiles. The ammunition is planned to be used with the help of Raven systems previously supplied by the UK — five of them are still on their way to Ukraine.