Morning wrap (13.06.2025)

Global stocks plummet as Israel launched airstrikes on Iran’s nuclear sites, sparking fears of wider conflict. (US500: 1.2%, US100: -1,4%, US30: -1,1%). 

The large-scale airstrike on Iran aimed at hitting nuclear facilities, missile sites, and military bases, killing senior Iranian commanders and scientists. Tehran vowed harsh retaliation, with early drone incursions reported. Israel declared a state of emergency. The attack derailed upcoming nuclear talks and sharply escalated regional tensions, prompting international calls for de-escalation amid fears of broader conflict. Washington distanced itself, urging calm while protecting its regional assets.

Treasury yields declined for a fourth straight day as moderating inflation and labor data supported bonds. Geopolitical tensions and Trump’s tariff plans fueled haven demand. The yield on 10-year US Treasuries fell two basis points to 4.34%.

Asia and Pacific stocks are also in the red as investors rushed to safe havens like Treasuries and gold, expecting Iran’s response and potential escalation. The MSCI Asia Pacific Index declined 1.1%; Japan’s Topix dropped 1%, Australia’s S&P/ASX 200 fell 0.4%, Hong Kong’s Hang Seng lost 0.7%, and the Shanghai Composite slid 0.7%.

Japan’s industrial production came in lower than expected in May, falling 1,1% from April (forecast: -0,9%, previous: +0,2%). The Bank of Japan is expected to keep its policy rate at 0.5% at its upcoming meeting, despite slightly higher inflation expectations.

Oil prices surged 9%, marking the largest jump in over three years, after Israel’s strike on Iran heightened geopolitical risks. Investors fear supply disruptions from a key crude exporter. The oil futures curve steepened, signaling long-term concerns. Market participants are bracing for volatility as tensions threaten broader regional stability.

In the forex market: US dollar recovers slightly due to the extreme risk-off. The Swiss franc strengthened against the US dollar, with USD/CHF dropping as much as 0.6% to 0.8056, its lowest since April, before partially reversing losses. The euro fell 0.5% to $1.1523, the British pound slid 0.6% to $1.3537. Risk-sensitive currencies like the Australian and New Zealand dollars were hit hardest as investors unwound risk-on positions. AUD/USD and NZD/USD dropped 1.2% and 1.1%, respectively.

Cryptocurrencies came under pressure: Bitcoin fell 1.6% to $104,271, and Ether dropped 4.7% to $2,517.