InvestMacro

At the end of Monday, the Dow Jones Index (US30) rose by 0.89%. The S&P 500 Index (US500) added 0.96%. The Nasdaq (US100) Tech Index closed up 0.94%. The US stocks closed higher on Monday amid falling oil prices after Iran launched missiles at a US air base in Qatar in response to US strikes on its nuclear facilities. The retaliatory measures were seen as restrained, as Iran refrained from striking key energy infrastructure or disrupting the Strait of Hormuz. President Trump also contributed by writing on social media that oil producers should “keep prices low,” which put additional pressure on oil. On the corporate front, Tesla rose by 8.2% after debuting its first driverless taxis, while AMD rose by 1% after a rating upgrade, helping to lift the broader technology sector.

The Canadian dollar fell to a three-week low against its US counterpart on Monday as investors weighed events in the Middle East and awaited domestic inflation data that could provide clues about the Bank of Canada’s policy outlook. Canada’s Consumer Price Index for May is expected to remain unchanged at 1.7% year-on-year. The focus will be on two key inflation indicators, which exceeded 3% in April. Softer data would reinforce expectations that the Bank of Canada, which refrained from action this month, may resume easing policy later in the summer.

European stock markets were mostly down on Monday. Germany’s DAX (DE40) fell by 0.35%, France’s CAC 40 (FR40) closed down 0.69%, the Spanish IBEX35 (ES35) Index lost 0.08%, and the British FTSE 100 (UK100) closed down 0.19%. On the data front, the flash PMI survey showed that Germany’s private sector returned to positive territory in June, marking the first increase since April.

WTI oil prices fell to $62.2 per barrel after Iran’s missile strike on a US airbase in Qatar did not result in casualties, easing fears of an immediate escalation of tensions in the Middle East. The attack, launched in response to US strikes on Iranian nuclear facilities, was intercepted by Qatari defenses. Although markets are now assessing the potential for de-escalation, significant risks remain — chief among them is the threat that Iran will attempt to close the Strait of Hormuz, through which about 20% of the world’s oil flows. Although Iran’s parliament has reportedly supported this move, the final decision rests with the country’s national security council. US officials, including Secretary of State Marco Rubio, have warned that such a move would be “economic suicide” for Iran and have called on China, its largest oil customer, to intervene.

Asian markets traded without a single trend yesterday. Japan’s Nikkei 225 (JP225) fell by 0.13%, China’s FTSE China A50 (CHA50) rose by 0.32%, Hong Kong’s Hang Seng (HK50) added 0.67%, and Australia’s ASX 200 (AU200) showed a negative result of 0.36%.

The Australian dollar strengthened to $0.648 on Tuesday, continuing its growth compared to the previous session, supported by the declining US dollar amid ambiguous developments related to the ceasefire between Israel and Iran. US President Donald Trump announced a “complete and definitive” ceasefire. However, Iran’s foreign minister denies that there is any agreement on a ceasefire or a halt to military action. In Australia, investors are now focused on the May monthly CPI figure, which is expected to decline slightly after remaining unchanged for three consecutive months. Markets currently estimate the probability of an RBA rate cut of 25 basis points in July at 80%, with a total rate cut of 73 basis points expected by the end of the year.

Malaysia’s annual inflation rate in May 2025 was 1.2%, lower than the previous two months and the market consensus expectations of 1.4%. This was the lowest reading since February 2021. Core consumer prices, excluding volatile fresh food and administrative costs, rose 1.8% year-on-year after rising 2.0% in April, the sharpest pace since November 2023.

At the end of Friday, the Dow Jones Index (US30) rose by 0.08% (-0.88% for the week). The S&P 500 Index (US500) fell by 0.22% (-0.55% for the week). The Nasdaq Technology Index (US100) closed lower by 0.43% (-0.23% for the week). On Friday, US Federal Reserve representative Waller’s statement that interest rates could be cut as early as July contrasted sharply with Chairman Powell’s more cautious, data-dependent stance. Shares of semiconductor companies such as Nvidia and TSMC fell more than 1% after reports that the US may revoke export licenses, raising concerns about global chip supply chains.

Retail sales in Canada in May 2025 fell by 1.1% compared to the previous month, according to preliminary estimates. This would reflect the sharpest decline in turnover since March 2023, indicating a stronger impact from US tariffs. This week, the Bank of Canada will get a fresh look at the country’s inflation data. Economists agree that inflation rose to 1.8% year-on-year last month. If these reports show signs of inflation slowing, the Bank of Canada may find an opportunity to cut interest rates to support the economy amid tariffs.

Stock markets in Europe were mostly down. The German DAX (DE40) rose by 1.27% (-1.01% for the week), the French CAC 40 (FR40) closed up 0.48% (-1.52% for the week), the Spanish IBEX35 (ES35) added 0.77% (-0.54% for the week), and the British FTSE 100 (UK100) closed down 0.20% on Friday (-0.86% for the week).

The war between Israel and Iran continues, but only the oil market is reacting to these events. Last week, WTI oil rose by approximately 2.7% after a 13% rally the previous week. WTI oil prices rose to $74.7 per barrel on Monday, reaching their highest level since January. After the US became directly involved in the Israeli-Iranian conflict, fears intensified that Tehran could retaliate by disrupting oil flows from the Middle East, particularly through the Strait of Hormuz. Iran is a major oil producer and exporter, and is located on a narrow waterway through which about 20% of the world’s oil passes. Iran’s parliament voted on Sunday to close the strait in response to US strikes, although the final decision rests with the Supreme National Security Council and Iran’s Supreme Leader.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) rose by 0.91%, China’s FTSE China A50 (CHA50) fell by 0.21%, Hong Kong’s Hang Seng (HK50) lost 1.10%, and Australia’s ASX 200 (AU200) showed a negative result of 0.49%.

On Monday, the Australian dollar fell to $0.640, reaching its lowest level in a month, amid a strengthening US dollar against the backdrop of escalating geopolitical tensions. The US dollar strengthened after US forces struck three major Iranian nuclear sites over the weekend, and President Donald Trump warned of further action if Tehran did not pursue peace. In Australia, economic data showed resilience despite external pressures. The manufacturing PMI remained at 51, while the services PMI rose to a three-month high of 51.3 from 50.6 previously.