Market Summary: Geopolitical Tensions and Economic Insights

Overview

This week saw a notable shift in market dynamics following the U.S. strikes on Iran’s nuclear facilities. Initial expectations of heightened volatility and a flight to safe-haven assets were quickly alleviated as tensions eased, allowing U.S. benchmarks to test all-time highs driven by optimism surrounding trade deals.

Key Market Movements

• U.S. Dollar Weakness: The U.S. Dollar fell to a three-year low as the market adjusted to changing conditions, including speculation about a potential new Fed Chair who may adopt a dovish stance.
• Oil Price Fluctuations: Oil prices experienced significant volatility, dropping sharply from Monday’s highs as geopolitical tensions subsided and the market reassessed risks.
• Defense Sector Growth: NATO's commitment to increase defense spending to 5% of GDP led to strong performances from defense stocks, with companies like Rheinmetall and Babcock seeing notable gains.
• Corporate Developments: Novo Nordisk announced the termination of its collaboration with Hims & Hers due to concerns over deceptive practices, resulting in a 5% drop in Novo Nordisk's shares and a 35% decline for Hims & Hers.

Upcoming Economic Data Releases

Next week, U.S. markets will observe the Independence Day holiday, with early closures on July 3rd and a complete shutdown on July 4th. Key economic data to be released includes:

• China's June PMIs
• Germany's June CPI
• EU's June CPI
• U.S. June ISM Manufacturing
• U.S. June Nonfarm Payrolls