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US and Iran strike peace deal

The US and Iran agreed on Sunday to end their nearly four-month war, with the accord to be signed in Switzerland on Friday. US President Donald Trump said the Strait of Hormuz and the US naval blockade would reopen upon the signing. Oil prices dropped sharply following the announcement, with Brent crude oil trading around USD 83.77 and West Texas Intermediate (WTI) at USD 80.89 per barrel as traders priced in the return of disrupted supply flows. The move would reopen a waterway that had carried about 20% of global oil supply before traffic collapsed in early March amid the conflict. Gold prices were trading around USD 4310 per ounce, rising strongly as the US dollar weakened, with the Dollar Index down 0.3%. US Treasury yields fell across the curve, with the 2-year yield around 4% and the 10-year yield near 4.4%. Bitcoin was trading higher around USD 65,800.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Middle East financial markets
© Shutterstock

In addition to geopolitical developments in the Middle East, monetary policy dominates the agenda this week as the Federal Reserve (Fed), Bank of Japan (BoJ), Swiss National Bank (SNB) and Bank of England (BoE) announce interest rate decisions. The Fed decision on Wednesday, accompanied by economic projections, is the main event, while the BoJ decides on Tuesday and the SNB and BoE follow on Thursday. Inflation remains in focus with UK and euro-area Consumer Price Indices on Wednesday, followed by Japanese national inflation and German Producer Price Index data on Friday. Growth and activity indicators include Chinese industrial production and unemployment data on Tuesday, US retail sales on Wednesday, and UK labour market figures on Thursday. Markets in the US and China are closed on Friday for the Juneteenth and Dragon Boat Festival holidays.

Asian tech stocks jump on peace

Asian technology shares rallied on Monday after news of a US-Iran peace deal lifted risk appetite and raised hopes that the Middle East conflict may soon end. Japan’s Nikkei 225 was up 4.9%, with SoftBank rising more than 10%, while Tokyo Electron gaining more than 7%. Korea’s Kospi was trading 4.7% higher, with Samsung gaining more than 4%. Australia’s S&P/ASX 200 was up 1.2%, while Hong Kong’s Hang Seng Index was 0.4% higher and mainland China’s CSI 300 gained 1.8%.

US stocks rise on SpaceX IPO

US stocks advanced on Friday as a record-breaking initial public offering by space, satellite and AI company SpaceX and signs of easing tensions in the Middle East supported sentiment. The Dow Jones Industrial Average rose 0.7% to 51,202.26 points, after the S&P 500 gained 0.5% to 7431.46 and the Nasdaq 100 added 0.6% to 29,635.95, helped by strong semiconductor shares. SpaceX raised USD 75 billion by selling about 555.6 million shares, valuing the Elon Musk-led company at USD 1.77 trillion at the offer price, while the stock ended its first trading day up 19.2% at USD 160.95.

German inflation eases in May

German inflation slowed to 2.6% in May from 2.9% in April and 2.7% in March, while consumer prices fell 0.2% month-on-month, according to data released on Friday. Energy prices rose 6.6% year-on-year, driven by oil-market pressure linked to the Iran war, although the increase was smaller than in April after a temporary cut in petrol and diesel taxes took effect at the start of the month. Food prices increased by just 0.4% from a year earlier, while services inflation remained stronger at 3.1%. Core inflation, excluding food and energy, stood at 2.5%, slightly below the headline rate. European stocks rallied strongly on Friday. The Euro Stoxx 50 surged 2.2%, while Germany’s DAX rose 1.8%. The Swiss Market Index also advanced, climbing 1.3% on Friday.

UK GDP contracts in April

UK gross domestic product fell 0.1% in April, after expanding 0.3% in March and 0.4% in February, according to data released on Friday. The decline was driven by a 0.2% drop in services output, while construction increased 0.1% and production was unchanged. Companies in several sectors cited weaker turnover linked to the Iran conflict, with higher energy and fuel costs weighing on activity, particularly in transport, manufacturing, wholesale and travel. The figures add to concerns about stagflation in the UK, while the IMF now expects the economy to grow by 0.8% in 2026, down from its earlier 1.3% forecast.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss Producer and Import Price Index (08:30), SECO Swiss consumer sentiment (09:00), European Central Bank President Christine Lagarde speaks (09:15), EU trade balance (11:00), Empire State Manufacturing Index (14:30), US manufacturing production (15:15).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.