Morning wrap (16.06.2025)

On Friday, Wall Street closed with deep losses due to the sudden escalation of the Israel-Iran conflict.
(S&P 500: -1.1%; Nasdaq: -1.3%; DJIA: -1.8%; Russell 2000: -1.85%).

According to Donald Trump, the U.S. could potentially become involved in the conflict. Nevertheless, the former president expressed hope that both countries would "achieve peace soon," emphasizing that the U.S. is currently not involved in Israel's attack.

In the Asia-Pacific region, cautious optimism is evident. The Japanese Nikkei 225 and South Korea’s Kospi are rebounding the most (both +1.3%), while moderate gains are seen in India's Nifty 50 (+0.6%), Shanghai SE Composite (+0.2%), and China’s HSCEI (+0.3%). Australia’s S&P/ASX 200 remains unchanged.

In Japan, the semiconductor sector and utility companies are leading the gains. In China, developers stand out (Hang Seng subindex for real estate companies: +2%) in response to expectations of new stimulus packages aimed at supporting the still-deteriorating real estate demand.

Retail sales in China rose above expectations in May (+6.4% y/y; forecast: 4.9%; previous: 5.1%), the highest since December 2023. The reading is primarily due to government subsidies and a marked spike in online shopping. However, consumer confidence is waning amid the ongoing real estate crisis (with sales continuing to decline).

China’s industrial production rose less than expected (+5.8% y/y; forecast: 6%; previous: 6.1%).

On the forex market, the week starts with very low volatility. The dollar index is down just 0.05%, while EURUSD gains 0.1% to 1.1560. The biggest moves are seen in the Antipodean currencies, which are recovering from Friday's losses (AUDUSD: +0.15%, NZDUSD: +0.25%).

ECB’s De Guindos said that ECB is very close to the target, markets clearly understood the post-decision message, inflation risks are balanced, euro strength is not a concern, and medium-term tariffs may dampen growth and inflation.

Oil extends gains after the weekend missile exchange between Iran and Israel. Brent and WTI futures rise by 0.9% and 1.1%, respectively, while natural gas futures are also in the green (+2%).

Precious metals are undergoing a slight correction. Gold is down 0.3% to $3,422 per ounce, while silver falls 0.15% to $36.24 per ounce.

Cryptocurrencies show optimism. Bitcoin gains 1.8% to $106,600, Ethereum is up 4.4% to $2,614, with Solana (+4.5%) and Sushi (+6%) futures also trading higher.