Market Commentary: Monday 16th June

Risk sentiment remains cautious amid the escalating conflict between Israel and Iran, though equities have remained resilient so far, with the S&P 500 trading around 6,000.

Oil markets continue to be one of the more volatile spaces—prices soared 5.5% in early trading but are now just 1% higher, at $73.71 a barrel. XAU/USD continues to test higher after breaking through $3,400 last week, supported by rising safe haven demand.

There are several key central bank meetings this week:

• BoJ (Tuesday) – No change expected

• Fed (Wednesday) – ~3% chance of a cut priced in

• SNB (Thursday) – 30bps priced in (100% chance of 25bps cut, 22% chance of 50bps)

• BoE – 7% chance of a cut priced in

The impact of sustained oil price increases and how they are perceived by central banks will be closely watched, as it could challenge the expected path of rate cuts over the next six months.

In China, retail sales rose 6.4% in May, far exceeding the 4.9% estimate. This came alongside a raft of regional data, painting a mixed picture but helping erase morning losses in Chinese and Hong Kong stocks.

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