The Israeli strike on Iran has jolted oil markets and is a key factor shaping today’s investor sentiment. However, in the upcoming week, several major central banks are scheduled to announce their monetary policy decisions. While most are expected to keep interest rates unchanged, volatility across currency, commodity, and equity markets may remain elevated. As such, it will be worth watching GBP/CHF, GOLD, and US500 after the weekend.
GBP/CHF
This week, the Bank of England (BoE) and the Swiss National Bank (SNB) are among the central banks expected to deliver monetary policy updates. While a rate cut from the BoE is unlikely, the bank has indicated plans for two cuts by the end of the year. SNB, on the other hand, is the most likely to adjust rates, due to a marked drop in inflation and the Swiss franc's excessive strengthening as a global “safe haven.” If Middle East tensions do not escalate further and U.S. trade negotiations remain intact, GBP/CHF could rebound from recent declines. However, in the case of negative developments, the downtrend may persist.
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Gold continues to serve as a key safe haven, alongside currencies like the Japanese yen, Swiss franc, and U.S. dollar. It is currently testing all-time highs and may continue climbing if tensions between Israel and Iran escalate. In the longer term, however, gold’s direction will depend on interest rate policy. On Wednesday, June 18, the Federal Reserve will announce its monetary decision. While no rate cuts are expected in June—or likely in July—recent softer inflation data and weaker labor market indicators may push the Fed toward a more dovish tone, which would support gold prices. Conversely, if the Fed’s decision strengthens the dollar, gold may correct from current record highs.
US500
The S&P 500 futures recently came within 2% of all-time highs but corrected sharply in response to escalating Middle East tensions—though a partial recovery followed during the New York session. If the U.S. refrains from direct military involvement, investor focus may return to the outlook for trade agreements and the upcoming Q2 earnings season. Although earnings remain uncertain due to new tariff barriers, the index has already recouped much of its earlier losses. US500 will now fight to sustain levels above the 6000-point threshold.
