InvestMacro

On Monday, the US stock indices closed mixed amid a balance between sell‑offs in the technology sector and geopolitical optimism. By the end of the day, the Dow Jones Index (US30) rose by 0.29%. The S&P 500 Index (US500) fell by 0.37%. The Technology Index NASDAQ (US100) closed lower by 0.19%. The tech sector declined due to investor concerns over rising capital expenditures on artificial intelligence, which led to a drop in Alphabet shares by 5.2%, Palantir by 7%, Amazon by 4.4%, and Meta by 2.7%. Additional pressure on the market came from a 16.4% low plunge in SpaceX shares after the announcement of a debut $20 billion bond issuance, although the stock price still remains 40% above its recent June IPO level.

In May 2026, Canada’s annual inflation rate accelerated to 3.2% from April’s 2.8%, exceeding the analysts’ consensus expect of 3.0% and reaching its highest level since December 2023. The main driver of price growth was the energy sector: amid the Middle East conflict and the suspension of oil exports, gasoline prices surged by 33.2% year‑over‑year, while overall energy costs rose by 9.0%. Despite the jump in the headline figure, core inflationary pressure remains fully under the control of the Bank of Canada. The regulator’s key indicators – CPI‑trim and CPI‑median – remained stable at their target levels of 2.0% and 2.1%, respectively.

European indices mostly rose yesterday. By the end of the day, Germany’s DAX (DE40) increased by 0.62%, France’s CAC 40 (FR40) closed down by 0.25%, Spain’s IBEX 35 (ES35) gained 1.01%, and the UK’s FTSE 100 (UK100) ended the session higher by 0.72%. A powerful trigger for investor optimism was Iran’s statement about significant progress in negotiations with the United States and the signing of a memorandum of understanding on a permanent peace agreement, which sharply reduced the risk of oil supply disruptions and eased global inflation concerns. The banking sector became the locomotive of the market rally: shares of Santander, BBVA, and Nordea rose by about 2% due to falling Eurozone sovereign bond yields, which improved lending margin prospects. The technology sector saw another investment boom, with shares of chipmaker Infineon jumping 5%, supporting the broader trend of hyperscale companies attracting capital for artificial intelligence infrastructure.

On Monday, global crude oil prices (WTI) continued to fall, hitting their lowest level since early March – US WTI dropped below $74 per barrel. The main driver of the sell‑off was news that the US and Iran had agreed on a “roadmap” to reach a peace agreement within 60 days, supported by the US Treasury’s decision to temporarily allow the extraction, supply, and sale of Iranian oil. Expectations of a rapid increase in supply are confirmed by real‑time data: shipping volumes through the Strait of Hormuz have risen noticeably, and Iran has increased visible exports through this route to the highest level since the start of the conflict, while offering discounts on cargoes for China.

The US natural gas price (XNG) corrected downward to $3.23 per MMBtu after a local rally to two‑week highs. The main factor behind the decline was the continued comfortable surplus in the domestic market, supported by the fact that commercial gas inventories in underground storage remain 5.8% above the long‑term seasonal norm.

On Monday, palladium prices (XPD) held near $1,270 per ounce, trading close to their lowest levels since late September amid a decline in geopolitical risk premiums. Progress in US-Iran negotiations and preparations to lift the naval blockade in the Strait of Hormuz significantly eased investor fears about supply disruptions. An additional negative factor for palladium is the deterioration of its fundamental market conditions. After 14 years of persistent deficits, analysts now expect the platinum‑group metals market to shift into surplus in 2026 due to declining investment demand and reduced ETF activity. The situation is further aggravated by long‑term structural changes in China’s automotive sector, where the rapid growth of electric vehicle adoption is undermining palladium consumption, traditionally used in catalytic converters for internal combustion engines.

On Friday, Japan’s Nikkei 225 (JP225) rose by 1.55%, China’s FTSE China A50 closed higher by 2.04%, Hong Kong’s Hang Seng (HK50) fell by 0.65%, and Australia’s ASX 200 (AU200) closed lower by 0.14%.

The Australian dollar fell below the psychological level of 0.70, hitting an eleven‑week low. The main factor behind the weakening of the “Aussie” was the powerful global rally of the US dollar, fueled by hawkish signals from the Federal Reserve and expectations of further rate hikes in the United States. Investors have taken a wait‑and‑see approach ahead of the release of critically important national macroeconomic data that will determine the next steps of the Reserve Bank of Australia (RBA). The May report is expected to show an acceleration in headline inflation to 4.4% (from 4.2%) and core inflation to 3.5% (from 3.4%), significantly exceeding the regulator’s 2-3% target range. Traders are also focused on labor market data: the consensus prediction expects a net job gain of 25,000 and a decline in unemployment to 4.4% after last month’s multi‑year high of 4.5%. Given that the RBA already raised the rate to 4.35% at its May meeting, strong macro data this week may force the regulator to proceed with new rounds of rate hikes in 2026, potentially triggering a sharp reversal and recovery in the AUD exchange rate.

By the end of the day, the Dow Jones Index (US30) rose by 0.14%. The S&P 500 Index (US500) gained 1.08%. The Technology Index NASDAQ (US100) closed higher by 1.91%. Investor sentiment was supported by the signing of an interim peace agreement between the United States and Iran, which opens shipping through the Strait of Hormuz and reduces volatility risks in the energy market. This optimism, combined with the rapid surge in the technology sector, outweighed market concerns about the Federal Reserve’s hawkish stance, as the Fed kept rates unchanged but hinted at the possibility of another hike this year.

The main growth driver in the tech segment was Intel, whose shares jumped 10.6% after President Trump announced that the company would manufacture chips for Apple inside the United States. This boosted the entire semiconductor sector: Nvidia rose by 2.8%, and Micron Technology by 8.5%. Airlines also showed notable gains, including American Airlines (+3.3%). Meanwhile, SpaceX shares fell by 3.5%, extending their decline for the second consecutive session after last week’s high‑profile IPO.

On Thursday, European stock indices showed mixed dynamics. By the end of the day, Germany’s DAX (DE40) rose by 0.37%, France’s CAC 40 (FR40) closed up by 0.44%, Spain’s IBEX 35 (ES35) fell by 0.09%, and the UK’s FTSE 100 (UK100) ended the session down by 1.04%. A positive factor for the market was the signing of a memorandum between US President Donald Trump and Iran, which suspends military actions for 60 days and opens the Strait of Hormuz. This lowered energy prices and eased investor concerns about further ECB tightening this year.

Norway’s central bank kept its policy rate unchanged at 4.25%, as expected, but indicated a high likelihood of further increases. Governor Ida Wolden Bache noted that rising business costs will continue to support strong price pressures, meaning the base rate may be raised at one of the upcoming meetings and could settle slightly above 4.5% by year‑end. Inflation in Norway has exceeded target levels for several years, while overall economic activity shows signs of weakening.

The Swiss National Bank kept its policy rate at 0%, emphasizing that the current monetary stance ensures price stability and supports economic growth. The regulator noted that medium‑term inflationary pressure has barely changed despite the recent spike in energy prices. According to the updated SNB expectation, inflation will slightly accelerate in the near term before returning to a downward trajectory in early 2027.

Crude oil prices (WTI) fell below 75 dollars per barrel, hitting their lowest level since early March, following the temporary peace agreement between the US and Iran. The deal aims to end the prolonged conflict that caused the largest supply disruption in history and has already led to the resumption of shipping through the Strait of Hormuz. Restoring this strategic route will allow Saudi Arabia, the UAE, and Iraq to return millions of barrels of previously halted production to the market. Since the April peak, oil prices have fallen by roughly 38%. Activity in Persian Gulf ports is picking up: Saudi tankers, as well as fuel and LNG carriers, have begun departing the region. However, global physical inventories of crude remain low.

The US natural gas prices (XNG) rose to 3.16 dollars per MMBtu after the EIA report showed that storage increased by 73 billion cubic feet in the week ending June 12 – slightly below the expected 75 billion. The current pace of inventory buildup slowed compared to the previous week (+108 bcf) and was weaker than the same period last year (+97 bcf), though it matched the five‑year average. As a result, total inventories reached 2.759 trillion cubic feet, 1% below last year’s level but 5.8% above the five‑year average.

On Thursday, Japan’s Nikkei 225 (JP225) rose sharply by 1.65%, China’s FTSE China A50 closed higher by 0.35%, Hong Kong’s Hang Seng (HK50) fell by 1.59%, and Australia’s ASX 200 (AU200) closed lower by 0.62%.

At its June 18, 2026 meeting, Bank Indonesia raised its key interest rate by 25 basis points to 5.75%, as expected. This move followed an unscheduled 25‑bp hike on June 9 and became the third tightening round in the past month, bringing the total increase since May to 100 basis points – the highest since April 2025. At the same time, the regulator raised the overnight deposit and lending facility rates to 4.75% and 6.50%, respectively. These decisive actions aim to protect the national currency, attract foreign capital, and contain inflationary pressures.

The US stock market closed in negative territory, reacting to the results of the June FOMC meeting. By the end of the day, the Dow Jones Index (US30) fell by -0.98%. The S&P 500 Index (US500) declined by -1.21%. The technology Index Nasdaq (US100) closed lower by -1.34%. As expected, the Federal Reserve kept the federal funds rate at 3.50–3.75%, marking the fourth consecutive pause and the first decision under the leadership of the new chair, Kevin Warsh. The updated economic projections revealed a split within the regulator: nine officials allow for at least one rate hike before the end of the year, six expect at least two increases, and another nine anticipate maintaining or lowering rates. The Fed’s main macroeconomic concerns have shifted toward price pressures: the PCE inflation projection for 2026 was sharply raised from 2.7% to 3.6%, and the estimate for the following year was revised from 2.7% to 3.3%. The Fed leadership noted that the US economy continues to show resilient performance despite geopolitical uncertainty caused by the Middle East conflict. At the same time, the labor market remains balanced.

The new Fed chair also announced the creation of five working groups that will review virtually everything: how the Fed communicates with markets, what to do with the balance sheet, which data to use, and how to measure inflation and employment. The Fed will now actively seek new data sources, which could potentially lead to a new model of monetary policy formation. This factor likely frightened markets the most due to the uncertainty it introduces.
Against the backdrop of sharp sell‑offs and a collapse in US Treasury prices, the technology sector came under heavy pressure, particularly the “Magnificent Seven”: shares of Meta, Microsoft, Alphabet, and Amazon fell by more than 2%.

The Canadian dollar (CAD) weakened to around 1.41 per US dollar, fluctuating near a seven‑month low following the results of the latest Fed meeting. Although the US regulator kept interest rates unchanged as expected, the updated projections were perceived as hawkish, since about half of FOMC members allowed for another rate hike before the end of the year. This increased pressure on the Canadian currency in the pair with the US dollar.

European indices closed in the green yesterday. By the end of the day, Germany’s DAX (DE40) rose by +0.10%, France’s CAC 40 (FR40) closed down by -0.20%, Spain’s IBEX 35 (ES35) gained +1.35%, and the UK’s FTSE 100 (UK100) ended the session higher by +0.14%.

On Wednesday, silver prices (XAG) fell below 70 dollars per ounce, reacting to the results of the Fed meeting, which kept interest rates unchanged but hinted at a possible hike before year‑end. Pressure on precious metals intensified because half of the FOMC members supported further tightening amid expectations of persistently high core inflation and a stable labor market. Such hawkish projections triggered sell‑offs in the bond market, increasing the opportunity cost of holding non‑yielding metals in favor of fixed‑income securities.

On Wednesday, crude oil prices (WTI) rose by more than 1.5%, surpassing 77 dollars per barrel. The catalyst for the local rebound was a strong statement by US President Donald Trump, who warned of the possibility of resuming airstrikes on Iran if Tehran violates its commitments. This reintroduced uncertainty regarding the final ceasefire agreement, as the US leader emphasized that the signed memorandum is not the final step.

On Wednesday, Japan’s Nikkei 225 (JP225) rose sharply by +0.72%, China’s FTSE China A50 closed lower by -0.10%, Hong Kong’s Hang Seng (HK50) fell by -0.74%, and Australia’s ASX 200 (AU200) closed higher by +0.54%. In Asia, investors closely followed the final day of the Lujiazui Forum, where the People’s Bank of China (PBoC) announced a possible transition to using the overnight rate as the main monetary policy benchmark. Additional uncertainty came from Vice Premier He Lifeng’s statement that Beijing plans to introduce anti‑sanctions measures to counter foreign restrictions.

The Hong Kong Monetary Authority (HKMA) kept its base rate at 4.0%. This synchronicity is due to the linked exchange rate system, which pegs the Hong Kong dollar within the 7.75–7.85 range per US dollar and obliges the local regulator to mirror US monetary policy regardless of domestic economic conditions. Despite the high cost of borrowing, Hong Kong’s economy remains resilient: in Q1 2026, GDP growth accelerated to a nearly five‑year high of 5.9% year‑over‑year. The main drivers of the recovery were stable external trade and strong domestic demand, which helped businesses offset the negative effects of geopolitical tensions and logistics disruptions caused by the Middle East conflict.