3 markets to watch next week (13.06.2025)

Geopolitical tensions stemming from the Israeli strike on Iran are roiling markets, but upcoming central bank monetary policy decisions from the Bank of England, Swiss National Bank, and U.S. Federal Reserve will also be key drivers of volatility across currency, commodity, and equity markets. The Swiss National Bank is the most likely to adjust rates, while the Federal Reserve's tone regarding inflation and labor data will influence gold prices and the S&P 500, which is attempting to sustain levels above 6000 points amidst uncertainty surrounding trade agreements and Q2 earnings.

Analysis

Global financial markets are currently navigating a period of heightened uncertainty, primarily driven by the dual impact of geopolitical instability, exemplified by the Israeli strike on Iran, and impending monetary policy decisions from several major central banks. The Swiss National Bank (SNB) is identified as the most probable candidate for a rate adjustment, influenced by a significant decline in domestic inflation and the franc's pronounced strength as a safe-haven currency. Conversely, the Bank of England (BoE) is expected to maintain current rates, though it has signaled intentions for two rate cuts by year-end. The U.S. Federal Reserve's upcoming announcement on June 18th is also pivotal; while no immediate rate cuts are anticipated for June or July, recent softer inflation figures and weakening labor market indicators could prompt a more dovish stance, potentially influencing gold prices, which are currently testing all-time highs amidst the geopolitical tensions. The S&P 500 futures (US500), having recently retreated from near all-time highs by approximately 2% due to Middle East escalations, showed a partial recovery and are now focused on sustaining levels above the 6000-point threshold, with its trajectory sensitive to U.S. military non-involvement, trade agreement outlooks, and an uncertain Q2 earnings season impacted by new tariff barriers. The GBP/CHF currency pair's potential rebound hinges on the de-escalation of Middle Eastern conflicts and stable U.S. trade negotiations, with a risk of continued downtrend if negative developments persist. Overall market sentiment is mixed, reflecting this complex interplay of factors and suggesting sustained volatility across currency, commodity, and equity markets.

Key Decisions for Investors

• Investors should closely monitor geopolitical developments in the Middle East, as escalations could further boost safe-haven assets like Gold and increase market volatility, while de-escalation might shift focus to economic fundamentals.
• Pay keen attention to the upcoming monetary policy announcements, particularly the Swiss National Bank's decision for potential rate adjustments and the Federal Reserve's tone on June 18th, as these will be critical for currency pairs like GBP/CHF and the direction of Gold.
• Exercise caution with the US500, watching its ability to hold the 6000-point level, and assess the impact of U.S. trade policy and Q2 earnings reports, which face uncertainty from tariff barriers.
• Consider that GBP/CHF's trajectory is highly dependent on both the SNB's actions and the geopolitical climate, presenting scenarios for either a rebound or continued weakness.