Iraq is pushing for higher oil production quotas within OPEC as it seeks to recover from a fiscal crisis triggered by the US-Iran conflict, which disrupted exports and forced monetary financing of government spending. The country, heavily reliant on oil revenues, has signalled it could reconsider its membership if output limits do not align with its capacity, following similar tensions that led another member to increase exports to about 4.05mn barrels per day after exiting. The situation highlights growing strain within OPEC’s quota system, as geopolitical shocks and uneven production capacities challenge cohesion and raise risks to coordinated global oil supply management.
Global equity markets are being reshaped by the AI-driven semiconductor cycle, as surging demand for high-performance memory chips has created supply shortages and pushed prices sharply higher. This has boosted profitability across the chip sector and lifted broader market sentiment, even as it creates cost pressures for downstream industries such as consumer electronics, highlighting uneven distribution of gains. Despite strong earnings momentum and a projected 12 to 15% supply shortfall next year, broader indices remain volatile, reflecting concerns about AI investment returns and the sustainability of current valuations.
Europe’s economy is seeing rising demand for cooling infrastructure as extreme heat becomes more frequent, with temperatures exceeding 40°C in parts of the continent and driving growth in the HVAC market. The sector is benefiting both from climate change and structural drivers such as urbanisation, stricter energy efficiency standards, and rapid data centre expansion, which is increasing industrial cooling demand. However, high installation costs of $10,000 to $20,000 and rising electricity prices risk limiting household adoption, pointing to affordability constraints despite strong underlying demand.
The 6M Euribor decreased with 3 basis points to 2.61% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.92% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The European Central Bank (ECB) reports that European Union countries outside the euro area have made little progress towards meeting convergence criteria, with developments largely stalling due to external shocks and weakening public finances. Debt levels and deficits have risen since 2024. Apart from Bulgaria, recent entrants remain distant from adoption. The Czech Republic, Hungary, Poland, Romania and Sweden lag, with Hungary failing all key criteria and requiring significant fiscal, institutional and structural improvements.
UK manufacturing orders contracted at the fastest pace since September 2020 in June, with the Confederation of British Industry balance falling to -45 from -41 in May. Expected output for the next three months also weakened to its lowest level since December 2024. Despite easing price pressures, manufacturers continue to face a challenging environment. While the reopening of key energy routes may provide some relief, supply chain and cost normalisation are expected to take time.
A Bank of America survey shows U.S. consumers now favour homebuying over renting for the first time since 2023, with 53% preferring to purchase. This shift is led by younger generations and reflects rising optimism despite high prices, limited supply and elevated mortgage rates. While 71% still wait for better conditions, down from 75% in 2025, more buyers plan near-term purchases. Affordability remains the key constraint, and mortgage rates are expected to stay between 6.25% and 6.75%.
The 6M Euribor increased with 1 basis point to 2.64% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.93% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Eurozone business activity contracted for a third straight month in June, though at a slower pace, with the PMI rising to 49.5 from 48.5 and above expectations of 49.2. The reading signals flat GDP growth as the private sector has seen no job creation for six months. Easing inflation pressures and slower cost increases point to possible looser monetary policy.
US tech stocks fell sharply as doubts over AI valuations triggered a broad sell off in semiconductor shares. The Nasdaq dropped 2.2% and the S&P 500 lost 1.4%, while key chip stocks fell up to 13% despite strong growth expectations. Rising rate expectations and a rotation into bonds and safe haven currencies added to market pressure.
The US economic suffers from an energy driven price shock, weighing on sentiment as only about one third of adults approve of economic policy. Tariffs reduced the trade deficit but also contributed to layoffs, highlighting pressure on industry. Expectations of lower oil prices aim to ease costs and stabilise markets.
The 6M Euribor increased with 1 basis point to 2.63% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.97% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
European Central Bank (ECB) President Christine Lagarde stated that the euro zone’s current inflation shock falls within a middle scenario, requiring measured policy adjustment without triggering second-round effects or de-anchoring inflation expectations. Following a rate hike on June 11, after inflation exceeded 3%, the deposit rate now stands at 2.25%, within the neutral range of 1.75% to 2.50%. Markets have priced in one to two additional hikes. Lagarde noted the shock appears smaller than the 2021/22 episode but warned against complacency.
Uncertainty persists over the status of the Strait of Hormuz following a preliminary agreement between Iran and the United States to keep the waterway open for at least sixty days. Iran claimed to have closed it again after Israeli attacks on Lebanon, though the U.S. Central Command reported continued traffic. Dozens of vessels have transited, including tankers carrying over 17 million barrels of oil. Despite the ambiguity, oil prices fell to $78 per barrel, as many shipping companies remain hesitant due to unresolved concerns over mines and insurance coverage.
Canada’s annual inflation rate surged to 3.2% in May, a 29-month high, exceeding analyst expectations of 3.0%. This marks the first time in nearly two and a half years that inflation has moved outside the Bank of Canada’s 1% to 3% target range. The rise was primarily driven by gasoline prices, up 33.2% year-over-year, alongside food costs rising 3.8%. Core inflation measures remained on target, with the consumer price index (CPI)-trim at 2.0% and CPI-median at 2.1%. Following the data, money markets price in one 25 basis point rate hike in December.
The 6M Euribor increased with 1 basis point to 2.62% compared to previous business day. The 10Y Swap decreased with 3 basis points to 3.00% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Fed Chairman Kevin Warsh launched five task forces to overhaul monetary policy frameworks, covering communications, inflation, the Fed’s 6.7 trillion dollar balance sheet, AI and economic data. The sweeping review marks the most ambitious reform effort by any recent Fed chair, described by analysts as “regime change in a velvet glove.” BlackRock called it “a new era of monetary policy in the United States.”
SK Hynix surpassed Samsung Electronics on Monday to become South Korea’s most valuable listed company, edging ahead in market capitalisation for the first time since Samsung took the top spot in 2000. Shares rose 5.7% on the day, bringing year-to-date gains to over 340%, driven by surging demand for high-bandwidth memory chips used in AI infrastructure. The chipmaker swung from an operating loss of 7.73 trillion won in 2023 to a record profit of 23.5 trillion won in 2024.
A coalition of 112 companies with combined revenues of 1.5 trillion dollars, including Nestlé, Ikea and Uber, called on governments to make electrification a core economic priority. The group cited fossil fuel price volatility as a drag on competitiveness and supply chain stability, pointing to recent Iran-linked price spikes. Clear policy frameworks, grid investment and faster permitting were named as prerequisites for the transition to scale.
The 6M Euribor is unchanged at 2.61% compared to previous business day. The 10Y Swap increased with 6 basis points to 3.03% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
U.S. equities rebounded on June 18, with the Nasdaq rising 1.91%, supported by a strong rally in semiconductor stocks and easing oil prices following the U.S.-Iran ceasefire extension. Lower energy prices helped reduce inflation concerns, although markets still price in potential Federal Reserve rate hikes, with a 50% probability of a 25 basis point increase by September. Labour data also indicated resilience, as weekly jobless claims declined amid low layoffs.
Oil markets showed renewed volatility, with Brent crude settling at $80.50 per barrel after briefly hitting pre-conflict lows, as geopolitical uncertainty resurfaced around the durability of the U.S.-Iran agreement. The deal includes a 60-day negotiation period and aims to restore flows through the Strait of Hormuz. Analysts expect gradual normalisation, with $75 per barrel seen as a near-term price floor.
Credit markets signalled confidence in capital-intensive sectors, as SpaceX secured investment-grade ratings between Baa1 and BBB with stable outlooks following its initial public offering. The assessment reflects expectations of financial stability despite high spending on artificial intelligence initiatives. However, market pricing indicated caution, as shares declined after an initial surge, highlighting ongoing valuation concerns in high-growth and innovation-driven segments.
The 6M Euribor increased with 2 basis points to 2.61% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.97% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Investors are increasingly betting on a stronger US dollar, driven by renewed confidence in the United States’ economic outperformance and expectations of sustained high interest rates. Futures positioning has surged to its highest level in over a year. Strong labour market data and rising core inflation have reduced expectations of rate cuts, with markets now pricing in a potential rate increase. In contrast, weaker outlooks in Europe and the United Kingdom reinforce the dollar’s relative appeal.
A European Central Bank policymaker indicated that a repeat of the 2022 inflation surge is less likely but still possible. Recent easing in oil prices following a Middle East peace framework has reduced near-term risks. However, policymakers remain focused on preventing second-round effects, where temporary shocks feed into wages and persistent inflation. The European Central Bank recently raised interest rates and left open the possibility of further increases amid ongoing geopolitical and energy-related uncertainties.
Japan is considering a temporary cut in its food consumption tax from 8% to 1% for two years, alongside targeted cash benefits of about 600 billion yen annually. The measure aims to support households but would reduce tax revenue by roughly 4.4 trillion yen in a 125 trillion yen budget, while boosting gross domestic product by just 0.3 trillion yen. Concerns over fiscal sustainability are already weighing on the yen despite recent interest rate increases.
The 6M Euribor decreased with 2 basis points to 2.59% compared to previous business day. The 10Y Swap is unchanged at 2.98% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The US Iran agreement has pushed oil below $80 a barrel and gas to €42 per MWh, easing fears of a prolonged energy shock. Markets have cut ECB tightening bets from four hikes to just over two, despite eurozone inflation still above 3%. Uncertainty over supply recovery and depleted inventories leave rate setters facing a premature loosening risk.
Chip stocks retreated as investors took profits after recent gains, dragging the sector lower. Losses ranged from 2.3 percent to 8.4 percent. Broader sentiment remained cautious ahead of a central bank rate decision expected to hold rates at 3.5 to 3.75 percent.
Wall Street paused as investors awaited clarity on a US Iran agreement and the first rate decision under the new Fed chair. Markets were mixed, with the Dow up 0.6 percent above 52000, while the Nasdaq fell 1.1 percent and the S&P 500 slipped 0.5 percent.
The 6M Euribor decreased with 3 basis points to 2.61% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.98% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The US-Iran treaty eased global markets. However, some Republican hawks called the deal a capitulation, while Vice President JD Vance defended it. The strait is not set to fully reopen until Friday, with normal traffic unlikely before 2027. Roughly 70% of Americans disapprove of Trump’s handling of cost-of-living issues. Tehran and Washington have 60 days to negotiate a comprehensive agreement.
The Bank of Japan (BOJ) raised its policy rate to 1% from 0.75% on Tuesday, a 31-year high, citing inflation risks from the Middle East energy shock. The decision passed 7-1, with Governor Kazuo Ueda absent. The Nikkei 225 hit a record above 70,000, while the yen rose 0.1% to 160.215 against the dollar. The BOJ will pause its bond taper from April, continuing to buy 2 trillion yen monthly. Wholesale inflation reached a 3-year high of 6.3% in May.
Spot gold rose 0.4% to $4,322.99 per ounce on Tuesday, extending gains for a fourth session after jumping 3.6% Monday, as a preliminary U.S.-Iran peace agreement eased rate hike concerns. U.S. gold futures fell 0.2% to $4,343.50. Traders trimmed December rate hike bets to 57% from about 70% last week. Markets await the Federal Reserve’s decision Wednesday, the first under Chair Kevin Warsh.
The 6M Euribor increased with 2 basis points to 2.64% compared to previous business day. The 10Y Swap decreased with 3 basis points to 3.01% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
US consumer sentiment rose to 48.9 in June from a record low of 44.8, beating expectations, supported by easing gasoline prices and a resilient labour market. Lower-income households led the improvement as fuel costs declined from recent highs, though inflation above 4% continues to weigh on purchasing power. A newly agreed US‑Iran peace deal, including the reopening of the Strait of Hormuz, may further ease energy supply pressures and reduce inflation risks. Ongoing geopolitical tensions nevertheless remain a key risk to inflation and growth, limiting prospects for interest rate cuts.
Germany’s economy is being supported primarily by increased government spending on defence and infrastructure, preventing a contraction despite weak private sector activity. Growth is forecast at 0.5% in 2026 and 0.8% in 2027, downgraded from earlier estimates as higher energy costs and geopolitical tensions weigh on demand and investment. Inflation is expected at 2.9% in 2026 and to remain above the European Central Bank’s 2% target through 2028, with risks tilted towards higher inflation and weaker growth.
India’s Chief Economic Adviser indicated that there is less urgency to revise capital gains taxes on equities compared to bonds, signalling limited policy changes for stock markets. Recent measures have focused on attracting capital into government securities amid foreign equity outflows, a weakening currency and elevated oil prices. Growth is now projected at 6.6% for fiscal 2027, lower than earlier estimates, with risks from energy costs and potential weather-related disruptions to inflation and economic stability.
The 6M Euribor increased with 3 basis points to 2.62% compared to previous business day. The 10Y Swap decreased with 4 basis points to 3.04% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
