US markets were closed for Juneteenth, while the Swiss National Bank cut interest rates, and the Bank of England kept rates steady. The US Federal Reserve also decided to keep rates unchanged. Meanwhile, the Israel-Iran conflict became a major topic as tensions rose due to Iranian attacks on Israeli sites, including a hospital. These events resulted in casualties and destruction, leading to fluctuations in crude oil prices, which settled at $73.85 after briefly nearing $76. It remains unclear how the US will respond to the conflict. President Trump has not yet made a decision, but he hinted that negotiations with Iran might influence his actions over the next two weeks. European allies are preparing to engage with Iran to promote peace talks, addressing the differences between the US and Iran. The US dollar showed mixed results against major currencies, with slight changes against EUR (-0.14%), JPY (+0.22%), and GBP (-0.34%). European stock markets closed lower, including the German Dax (-1.14%) and France’s CAC (-1.34%). Gold and Bitcoin remained stable, while crude oil increased slightly to $73.88 after hitting a high of $75.70. With US markets closed for Juneteenth, all eyes turned overseas. The Swiss rate cut surprised many, setting them apart from other central banks that decided to hold their ground. The Bank of England played it safe by keeping rates unchanged. The Federal Reserve also did not make any changes, contrary to earlier expectations this quarter. Beneath these decisions lies a careful reassessment of inflation expectations. Central banks are no longer rushing to make moves. They are monitoring data and prefer to see clear changes before adjusting rates. Until that clarity emerges, traders should expect a cautious approach from monetary policymakers, with market moves more influenced by geopolitical news than by European Central Bank (ECB) or Federal Open Market Committee (FOMC) updates. Geopolitical tensions have intensified recently. The conflict in the Middle East, particularly Iranian actions against Israeli targets, has unsettled risk sentiment. The attack on a hospital reignited diplomatic worries and affected commodity prices. When oil prices approached $76 before dropping to just under $74, it reflected sudden changes in perceived supply risks. The situation remains uncertain, and energy prices will likely react to news events for the foreseeable future. The American president’s uncertain stance on military or diplomatic responses adds to the unpredictability. However, timing is critical—any decisions are anticipated soon and could have significant ramifications. Europe seems ready to step in, with talks with Tehran being suggested, although nothing has been officially scheduled yet. They aim to find a moderate approach, clearly concerned about the potential for broader instability that could impact energy markets and migration flows. The dollar’s performance was mixed. Its strength against the yen suggests some investors are opting for safer assets, while its weakness against the pound indicates changing expectations regarding interest rates or adjustments in growth forecasts across the Atlantic. Even small currency shifts reveal deeper complexities—investors are seeming to prioritize protecting their current positions over making aggressive bets. European equity markets reacted negatively to the news. The declines in Germany and France signaled that risk appetite has diminished, with fund managers reducing exposure. This doesn’t quite reflect panic, rather a strategic approach to hedge risks while awaiting clearer indicators. Investors are cautious, especially with ongoing uncertainty about oil supply and monetary policies. For those paying close attention to commodity pricing, the slight rise in crude to $73.88 should be understood within context. Yes, there was a temporary increase and existing pressure, but markets are currently managing the situation. This trend may continue, though prices could shift quickly if unexpected headlines emerge. On the other hand, stability in safe-haven assets like gold and Bitcoin shows a broader hesitance in the market. Investors are not rushing to cash but are also not making bold commitments. This kind of pause may not last forever, but for now, it suggests that future positioning will depend more on geopolitical factors than macroeconomic data in the short term.

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