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Wednesday 18th June 2025
Weekly Market Update
Overview
Global markets experienced a mixed week, reflecting a blend of cautious optimism and heightened geopolitical tensions. In North America, US equities rallied strongly (S&P 500 +1.54%) on optimism around US-China trade progress and contained inflation, supporting expectations for a Federal Reserve rate pause with potential cuts later this year. European markets edged lower amid Middle East conflicts and trade uncertainties, though the UK’s FTSE 100 briefly reached record highs before retreating on geopolitical concerns. Japan’s market showed resilience despite currency strength, geopolitical volatility, and a cautious Bank of Japan stance. In China, equity gains were modest, buoyed by aggressive liquidity support from the People’s Bank of China amid ongoing trade frictions and cautious investor sentiment ahead of upcoming leadership talks. Indian equities faced notable volatility driven by Middle East tensions, oil price spikes, and domestic challenges, including a sharp sell-off in aviation stocks following the tragic Air India crash near Ahmedabad. In the MENA region, markets declined amid regional instability and surging oil prices, although IPO activity in Dubai remained robust. Commodities saw sharp moves as oil prices climbed on supply disruption fears while gold maintained its safe-haven appeal amid uncertainty. Currency markets reflected risk-off sentiment with the U.S. dollar rebounding modestly (DXY +0.4%) following a dip, while the euro strengthened on easing dollar pressure and hawkish commentary from the ECB. Overall, markets balanced positive trade developments against escalating geopolitical risks, setting the stage for a closely watched Federal Reserve meeting next week.
The Week Ahead:
Mon: Japanese Money Supply
Tues: US President Trump to speak
Wed: US Inflation Readings (Consumer Price Index, CPI)
Thurs: UK Economic Growth readings (Gross Domestic Product, GDP)
Fri: Indian Trade Balance
Outlook: The tug-of-war between global economic growth and inflation appears to have reached a more feasible balancing point. Across equity markets, the narrowing of the gulf between growth and value is likely to continue as a greater number of industries start to benefit from higher earnings and improving monetary and fiscal policies. 2025 likely will not be a year of robust economic (GDP growth: U.S. growth is forecast to grow at a modest 1.5%-2.5%, with the Eurozone and Chinese growth lagging. In this environment, investors could benefit from an increased allocation towards value names whilst avoiding an overexposure to growth. Nonetheless, we continue to buy high-quality, profitable, blue-chip equities with strong balance sheets and positive free-cashflow yields. Fixed-income securities also offer attractive yields at these levels, without subjecting portfolios to much downside risk. Emerging market equities and small companies are also available at attractive valuations relative to US Blue Chips. The overall outlook for equities remains cautiously optimistic, supported by a more dovish US Federal Reserve and a resilient US economy, though global risks and sector-specific performance will be closely watched.
Asset class forecasts*
[wpdatatable id=14]
*Source: Goldman Sachs (GS) Global Investment Research and GSAM as of January 2021.
Developed Markets
North America
U.S. equities posted solid gains during the week, with the S&P 500 rising by 1.54%, the Nasdaq 100 by 2.00%, and the Russell 2000 by 3.23%. Market sentiment was boosted by progress in US-China trade negotiations held in London, where both sides reached preliminary agreements on rare earth exports and student visa policies, helping ease tensions and drive investor optimism. However, markets faced renewed geopolitical risks later in the week as reports emerged of Israeli airstrikes on Iranian infrastructure, triggering a temporary spike in oil prices, crude briefly surged by nearly 10% before stabilizing. Despite these tensions, equity markets remained resilient, supported by encouraging inflation data. The May Consumer Price Index (CPI) rose just 0.1% month-over-month (2.4% year-over-year), with core CPI also up 0.1%, suggesting that inflation pressures remain contained. These readings strengthened expectations that the Federal Reserve will maintain its benchmark interest rate at 4.25% to 4.5% during its upcoming June 17-18 policy meeting, with markets increasingly pricing in a possible rate cut later in Q3 or Q4. On the policy front, President Trump reiterated tariff threats on foreign goods, which caused some headline volatility, though investors largely focused on the positive momentum in trade dialogue. Looking ahead, all eyes will be on the Federal Reserve’s guidance next week, particularly Chair Powell’s remarks, as investors assess the balance between moderating inflation and global geopolitical uncertainty.
Europe & UK
European equity markets ended the week with mild declines, with the pan-European STOXX 600 losing around 0.1%, while Germany’s DAX fell approximately 0.3% and France’s CAC 40 dipped about 0.2%, as investors remained cautious over ongoing trade uncertainty and geopolitical risks. In contrast, the UK’s FTSE 100 held relatively firm, advancing 0.02% in the week and even reaching a record closing high of 8,884.92 on June 12, before pulling back ~0.5% by Friday amid Middle East tensions. Investor optimism in the UK was underpinned by the UK-US Economic Prosperity Deal, which reduces tariffs on select UK exports, such as steel and autos, though a 10% baseline tariff remains, reflecting persistent protectionist undercurrents. Meanwhile, the Bank of England eased monetary policy in May, lowering its main interest rate by 25 bps to 4.25% in a narrow 5-4 vote, attributing the decision to rising concerns over global trade disruptions on the UK economy. On Friday, geopolitical tensions escalated as Israel launched strikes on Iranian targets, leading to a surge in crude prices and dragging on European markets: travel and leisure stocks underperformed, while energy, defence, and precious metals shares benefitted. Looking ahead, investors will focus on how the UK-US trade agreement evolves, potential further moves by the BoE, and the extent to which geopolitical strains may impact investor confidence and sectoral performance.
Japan
Japanese markets experienced a mixed week amid external uncertainties and domestic policy recalibration. The Nikkei 225 kicked off strong, surpassing the 38,000 mark on June 9 thanks to continued foreign investor inflows and gains in tech-heavy names like Advantest, but later softened due to Middle East tensions and a stronger yen, ultimately rising about 1.3% early in the week. Meanwhile, economic data improved modestly: the second estimate for Q1 GDP showed a smaller contraction of -0.2% annualized (better than the initial -0.7%) and industrial production was mixed, down 1.1% month-over-month but up 0.5% year-over-year. Inflation remained elevated, with headline CPI around 3.6% in April, sustaining above-target levels. Amid this backdrop, the Bank of Japan met on June 16-17 and kept its policy rate at 0.5%, reaffirmed its ongoing bond tapering plan through March 2026, but signalled a slower pace thereafter to manage volatility, particularly in long-term yields, which recently surged amid global uncertainty. Governor Ueda also emphasized that further rate increases remain on the table if underlying inflation solidifies near 2%, though a Reuters poll predicts the next hike will likely be delayed to Q1 2026. Domestically, policymakers are discussing ¥30,000-40,000 consumer handouts to offset inflationary pressures, aligning with a political drive ahead of the July upper house election, while Prime Minister Ishiba’s broader agenda continues to focus on fiscal sustainability and social security amid an aging population. Looking ahead, the interplay of BOJ’s cautious monetary pivot, yen dynamics, and global trade and geopolitical developments will remain critical for Japan’s economic outlook.
Emerging Markets
China
Chinese equity markets delivered a muted yet cautiously positive performance this week. The CSI 300 gained around 0.8% mid-week on modest progress in US-China trade talks, particularly a framework addressing rare earth exports, though the upside remained limited amid lingering doubts over implementation and continued tariff legalities. The Shanghai Composite and Shenzhen Component reflected this cautious tone, buoyed by central bank easing measures but capped by profit-taking and geopolitical caution. On the policy front, the People’s Bank of China continued its aggressive liquidity support, injecting ¥400 billion via six month reverse repos on June 16 following a ¥1 trillion three month operation earlier in the month, marking two substantial injections aimed at smoothing interbank funding and sustaining credit flow. The PBOC also held the seven day reverse repo rate steady at 1.50%, signalling readiness to deploy rate tools if needed, alongside encouraging banks to boost lending to sectors such as consumption, trade, and SMEs. Against this backdrop, domestic sentiment stabilized, with equity markets meandering sideways as investors assessed whether policy support could offset external headwinds from trade friction and structural challenges.
Looking ahead, the market’s focus turns to upcoming leadership discussions between Presidents Trump and Xi, the planned Lujiazui Forum with potential PBOC guidance, and any fresh liquidity operations. The central bank’s ability to balance monetary stimulus with financial stability amid ongoing trade uncertainties and a slowing property sector will be pivotal.
India
Indian equity markets experienced heightened volatility during the week due to a convergence of global and domestic concerns. The BSE Sensex dropped approximately 0.7% to close at 81,118.60, while the Nifty 50 fell by 0.68% to 24,718.60. Investor sentiment was shaken mid-week by a sharp decline, the Sensex fell over 823 points, as escalating Israel-Iran conflict triggered a spike in oil prices along with renewed trade uncertainties. Thursday’s sell-off was led by IT, energy, PSU banks, and FMCG stocks amid oil volatility and risk aversion ahead of the weekly F&O expiry. Geopolitical tensions from the Middle East weighed on market sentiment, which was compounded by ongoing friction with Pakistan. Although the India-Pakistan ceasefire eased immediate conflict fears, investors remained cautious as potential escalation continued to pose risks. Additionally, external trade headwinds, especially uncertainty around US-China tariffs, added to the heightened risk environment. On the policy front, oil price spikes extended inflation concerns, negatively affecting sectors like aviation and energy. The tragic Air India crash over Ahmedabad further weighed on aviation stocks. However, by Monday the market rebounded strongly, Sensex surged ~0.84% (81,796) and Nifty ~0.92% (24,946) as oil prices eased and global trade optimism resurfaced. Looking Ahead, investors will monitor ongoing geopolitical developments, including the Israel Iran conflict and India-Pakistan dynamics, as well as global trade discussions. Equity markets remain sensitive to oil price movements, while renewed trade and tariff talks may influence the broader risk outlook.
MENA
Equity markets across the MENA region were impacted by heightened geopolitical tensions, particularly following Israeli airstrikes on Iran. The Dubai Financial Market General Index (DFMGI) declined by approximately 1.5% for the week, with a sharp sell-off on Friday driven by weakness in major real estate names such as Emaar Properties and Emaar Development. Despite some recovery early in the week due to optimism around US-China trade talks, market sentiment turned risk-averse as regional instability escalated. Abu Dhabi’s exchange showed relative resilience, recovering modestly on Monday after initial losses, supported by strength in energy-related stocks. Meanwhile, Saudi Arabia’s Tadawul All Share Index (TASI) fell by around 1.3%, led by declines in Al Rajhi Bank and Saudi Aramco amid broader regional risk aversion and profit-taking. Across the wider GCC, performance was mixed, Qatar’s index declined sharply by 2.9% on Sunday following the flare-up in Middle East tensions, while Kuwait and Egypt also registered losses. Crude oil prices spiked by 6-7% during the week, reflecting elevated geopolitical risk premiums, while gold rose roughly 3.5% on safe-haven demand. Bond yields in the region edged higher, and regional currencies, including the Israeli shekel, came under pressure. Despite market volatility, capital markets activity remained robust. Dubai Residential REIT successfully completed its listing on the Dubai Financial Market, becoming one of the region’s largest publicly traded REITs. In Saudi Arabia, the IPO pipeline remained active, underscoring investor appetite for sector diversification. On the macroeconomic front, UAE GDP data continued to support the outlook for diversified non-oil growth, maintaining the country’s stable 4-4.5% annual growth forecast. Looking ahead, regional markets remain sensitive to geopolitical developments, oil price fluctuations, and the evolving pace of global trade discussions, while continued IPO activity and stable monetary policy offer some reassurance to investors.
Commodities and Forex
Commodities
Oil prices surged sharply over the week amid heightened Middle East tensions following Israeli strikes on Iran. Brent crude futures climbed approximately 7%, closing the week at $74.23 per barrel, up from $69.36 the previous week. U.S. West Texas Intermediate (WTI) experienced similar gains, finishing around $72.98, reflecting a risk premium due to concerns over potential disruptions to oil supply, particularly through the Strait of Hormuz. Despite earlier expectations of OPEC+ raising output, geopolitical developments took center stage and dominated pricing dynamics. Gold continued its run as a safe-haven asset, trading in a wide range before settling at approximately $3,420 per ounce. Prices fluctuated between $3,385 and $3,435, with volatility driven by both the geopolitical risk premium and shifting investor sentiment as markets weighed inflation data and Federal Reserve guidance. Gold’s strong performance reflects its role as a defensive hedge amid global uncertainty.
Currencies
The U.S. Dollar Index (DXY) rebounded to ~98.18 after dipping to a three-year low earlier in the week, climbing approximately 0.4% amid renewed safe-haven flows triggered by Israeli strikes on Iran. Still, the dollar posted a monthly decline of around 2.8%, weighed down by soft U.S. inflation data and growing expectations for Federal Reserve rate cuts later this year. Conversely, the euro strengthened, trading in a range between $1.142-$1.163, closing the week near $1.155, its highest level since mid-2023. This euro strength was driven by a combination of easing dollar pressure, hawkish comments from ECB Vice President de Guindos on maintaining inflation targeting, and anticipation of the ECB pausing further rate cuts.
Commodities
| Name | 06/06/25 | 31/05/25 | 31/03/25 | 31/12/24 |
|---|---|---|---|---|
| WTI Oil ($/barrel) | $64.58 | $60.79 | $71.48 | $71.72 |
| Brent Oil ($/barrel) | $66.47 | $63.90 | $74.74 | $74.64 |
| Gold ($/oz) | $3310.42 | $3289.25 | $3123.57 | $2624.50 |
| Natural Gas ($/mmBtu) | $3.78 | $3.45 | $4.12 | $3.63 |
Currency
| Name | 06/06/25 | 31/05/25 | 31/03/25 | 31/12/24 |
|---|---|---|---|---|
| Euro (€/$) | 1.1397 | 1.1347 | 1.0816 | 1.1041 |
| Pound (£/$) | 1.3528 | 1.3459 | 1.2516 | 1.2746 |
| Japanese Yen (¥/$) | 144.85 | 144.02 | 157.20 | 141.02 |
| Swiss Franc (CHF/€) | 0.9371 | 0.9333 | 0.9401 | 0.9289 |
| Chinese Yuan Renminbi (CNY/$) | 7.1926 | 7.1989 | 7.2993 | 7.0842 |
Index Valuations
Index Return
| Equities | 1 Week | MTD | QTD | YTD |
|---|---|---|---|---|
| S&P 500 | 1.54% | 1.54% | 7.20% | 2.61% |
| NASDAQ Composite | 2.20% | 2.20% | 13.05% | 1.45% |
| DJ Industrial Average | 1.23% | 1.23% | 2.20% | 1.31% |
| S&P 400 | 1.69% | 1.69% | 4.77% | -1.63% |
| Russell 2000 | 3.23% | 3.23% | 6.23% | -3.84% |
| S&P 500 Equal Weight | 1.23% | 1.23% | 3.22% | 2.59% |
| STOXX Europe 50 (€) | 1.18% | 1.18% | 5.54% | 13.64% |
| STOXX Europe 600 (€) | 0.94% | 0.94% | 5.53% | 11.79% |
| MSCI EAFE Small Cap | 0.65% | 0.65% | 12.59% | 16.91% |
| FTSE 100 (£) | 0.79% | 0.79% | 3.91% | 10.26% |
| FTSE MIB (€) | 1.28% | 1.28% | 9.54% | 22.49% |
| CAC 40 (€) | 0.75% | 0.75% | 2.60% | 8.54% |
| DAX (€) | 1.28% | 1.28% | 9.66% | 22.08% |
| SWISS MKT (CHF) | 1.14% | 1.14% | -0.13% | 9.84% |
| TOPIX (¥) | -1.15% | -1.15% | 4.17% | -0.56% |
| Nifty 50 | 1.02% | 1.02% | 6.66% | 5.74% |
| Hang Seng (HKD) | 2.16% | 2.16% | 4.03% | 18.61% |
| MSCI World | 1.36% | 1.36% | 8.43% | 6.61% |
| MSCI China Free | 2.30% | 2.30% | -0.16% | 14.09% |
| MSCI EAFE | 0.73% | 0.73% | 10.40% | 18.19% |
| MSCI EM | 2.29% | 2.29% | 8.12% | 11.35% |
| MSCI Brazil (BRL) | -0.33% | -0.33% | 4.85% | 12.00% |
| MSCI India (INR) | 1.44% | 1.44% | 7.64% | 4.29% |
Fixed Income
| Name | 1 Week | MTD | QTD | YTD |
|---|---|---|---|---|
| Bloomberg Aggregate | -0.44% | -0.44% | -0.76% | 2.00% |
| Bloomberg Euro Aggregate | 0.09% | 0.09% | 7.14% | 10.76% |
| Bloomberg US High Yield | 0.32% | 0.32% | 1.99% | 3.01% |
| Bloomberg Euro High Yield (€) | 0.25% | 0.25% | 1.80% | 2.35% |
Blend Fund Performance Year To Date (05/06/2025)
Blend Fund Performance Since Inception (05/06/2025)
Direct Fund
| (09/06/25) | 1 week % | 1 month % | 6 months % | YTD % | 1 year % | 2 years % |
|---|---|---|---|---|---|---|
| Aditum Global Discovery | 0.86% | 2.60% | 1.06% | 4.67% | 7.56% | 20.33% |
| Ashoka WhiteOak India Opportunities | 0.34% | 4.97% | -5.26% | -1.95% | 8.58% | 18.56% |
| BlackRock GF World Healthscience USD | 0.65% | 0.03% | -6.62% | -1.26% | -8.73% | 2.31% |
| Emirates Global Sukuk | 0.13% | 0.23% | 1.01% | 1.93% | 3.74% | 5.96% |
| Emirates MENA Fixed Income | 0.19% | 0.30% | -0.73% | 1.27% | 2.57% | 6.31% |
| Emirates MENA Top Companies | -0.33% | -2.41% | -2.35% | -2.10% | 4.56% | -0.73% |
| Franklin Gold and Precious Metals USD | 6.79% | 12.28% | 60.27% | 73.49% | 74.61% | 96.17% |
| Harris Associates Global Equity | 0.72% | 2.93% | 4.20% | 7.93% | 6.37% | 11.65% |
| Loomis Sayles Global Growth Equity | 1.26% | 7.92% | 3.75% | 5.48% | 22.93% | 40.73% |
| Loomis Sayles Multisector Income | 0.23% | 0.85% | 0.84% | 2.38% | 5.46% | 11.28% |
| PineBridge Japan Small Cap Equity | -0.37% | 4.18% | 12.61% | 14.93% | 12.07% | 0.39% |
| UBAM 30 Global Leaders Equity | 1.17% | 5.73% | -0.68% | 4.21% | 3.32% | 17.89% |
| iShares US Corporate bond Index | 1.13% | 1.80% | 0.47% | 2.52% | 5.28% | 6.09% |
| iShares Developed World Index | -0.97% | -0.45% | 6.86% | 2.92% | 8.61% | 19.40% |
Zurich Managed Funds
| (09/06/25) | 1 week % | 1 month % | 6 months % | YTD % | 1 year % | 2 years % |
|---|---|---|---|---|---|---|
| US dollar Adventurous | 1.48% | 5.28% | 3.37% | 7.91% | 8.05% | 27.92% |
| US dollar Performance | 1.35% | 4.69% | 0.68% | 4.51% | 8.03% | 24.59% |
| US dollar Blue Chip | 0.95% | 3.54% | -0.63% | 2.70% | 6.40% | 19.06% |
| US dollar Cautious | 0.46% | 2.26% | -0.78% | 2.12% | 4.86% | 12.82% |
| US dollar Defensive | -0.07% | 0.94% | -0.33% | 2.14% | 3.50% | 7.58% |
Zurich Mirror Funds
| (09/06/25) | 1 week % | 1 month % | 6 months % | YTD % | 1 year % | 2 years % |
|---|---|---|---|---|---|---|
| Canaccord Genuity Balanced | 0.99% | 2.82% | 0.33% | 3.21% | 5.20% | 15.79% |
| Canaccord Genuity Growth | 1.06% | 3.69% | -0.41% | 2.86% | 5.66% | 17.44% |
| Canaccord Genuity Opportunity | 0.87% | 3.22% | 1.30% | 4.07% | 7.63% | 24.15% |
| Emirates Emerging Market Debt | 0.51% | 0.99% | -2.19% | 0.09% | 5.15% | 13.00% |
| Emirates Islamic Balanced Managed | 0.73% | 1.68% | 0.56% | 1.97% | 5.20% | 12.51% |
| Loomis Sayles US Growth Equity | 0.00% | 6.78% | -3.63% | -1.17% | 15.79% | 49.88% |
* Data is lagged by 1 day.
** Data is lagged by 2 days.