Issue #14 - Oil Surges, Gold Soars

Read Time 6 mins

What’s in this issue;

This week’s newsletter delves into the escalating Israel-Iran conflict and its impact across global markets.

Learn about the drastic surge in oil prices and how safe-haven assets like gold are hitting new highs.

We also discuss softer-than-expected U.S. inflation data, which has raised market expectations for Federal Reserve rate cuts later in the year.

We'll explore the broader economic landscape, as the World Bank lowers its global growth forecast for 2025 to the slowest pace since 2008, and highlight central banks' decisions to hold rates steady amid rising tensions.

Plus, get insights into the latest U.S. retail and services data defying downturn trends.

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What is Moving the Markets This Week

Israel-Iran Conflict Escalation: Markets plunged after Israel launched strikes on Iranian nuclear sites and Iran retaliated with missile attacks, raising fears of a broader Middle East war. This drove oil prices up sharply (over 6-7%) and sent investors fleeing to safe-haven assets like gold.

Oil Price Surge: The geopolitical turmoil in the oil-rich Middle East caused crude prices to spike, amplifying inflation concerns and weighing on airline and travel stocks.

Safe-Haven Flows: Gold hit record highs and U.S. Treasury yields fell as traders sought safety amid the heightened geopolitical risk.

U.S. Inflation Data: Softer-than-expected consumer and producer price index readings, along with signs of a cooling labor market, increased expectations for Federal Reserve rate cuts later this year.

Trade Developments: Progress in U.S.-China trade talks, with a tentative deal involving rare earth exports, provided some relief but was overshadowed by geopolitical headlines.

For the week, the S&P 500 fell 0.4%, the Nasdaq lost 0.6%, and the Dow dropped 1.3% as risk-off sentiment dominated.

Top Economic News

Global Growth Slows Sharply

The World Bank cut 2025 global growth forecasts to 2.3%, marking the slowest pace since 2008 outside of recessions. Heightened trade tensions and policy uncertainty have led to downgrades in nearly 70% of economies worldwide.

Central Banks in Focus: Fed, BoE, BoJ Hold Steady

The US Federal Reserve, Bank of England, and Bank of Japan are all expected to keep interest rates unchanged this week. The Fed faces persistent inflation (2.4%) and tariff uncertainty, while the BoE is likely to hold rates at 4.25% before possible cuts later in the year.

US Retail and Services Data Remain Resilient

Despite falling manufacturing output, US services activity and retail sales are expected to show strength, signaling ongoing consumer resilience amid broader economic headwinds.

These developments set the tone for the week which was dominated by central bank decisions, inflation data, and ongoing concerns about global trade and fiscal stability.

Looking Forward: What We Anticipate Next Week

The coming week will be dominated by heightened geopolitical and economic risks, with several major events likely to drive market sentiment:

Key Geopolitical Risks

The Israel-Iran conflict has sharply escalated, with both sides launching strikes targeting military and energy infrastructure. This has already pushed oil prices up by 6–7% and driven investors toward safe-haven assets like gold and the US dollar.

Any further escalation—especially threats to the Strait of Hormuz, a vital oil shipping route—could send energy prices even higher and rattle global markets.

Central Bank Decisions

The US Federal Reserve will announce its interest rate decision on Wednesday. The market expects rates to remain unchanged, but investors will scrutinise the Fed’s updated economic projections and Powell’s press conference for clues on future policy.

The Bank of Japan will also decide on rates Tuesday, while the Bank of England is set to announce its decision Thursday. Both are expected to hold rates steady, but their guidance will be closely watched for any policy shifts.

Economic Data

US May retail sales (Tuesday) and housing starts/building permits (Wednesday) will provide fresh insight into the health of the American consumer and housing market.

UK inflation data (Wednesday) could influence the Bank of England’s tone on rate cuts.

Earnings Highlights

Key earnings reports include Lennar (Monday), Jabil Inc., Kirkland’s, Vince (Tuesday), and Accenture, Kroger, CarMax (Friday).

Market Impact

Last week saw global stocks drop, oil surge, and volatility spike as investors reacted to the conflict and economic uncertainty.

Rate-sensitive sectors like real estate and banking were under pressure, while IT and pharma showed relative strength.

Things I’m Paying Attention To

$eth is not a security

Ethereum ($ETH) Is Not a Security

It’s now official that Ethereum is not classified as a security.

Could current events redefine how you see the markets?

The passing of the CLARITY Act means Ethereum will be officially recognised as infrastructure (similar to the internet) rather than as a company selling stocks.

Implications for Staked ETH ETFs

With this new classification, the likelihood of staked ETH ETFs being approved is now considered to be much higher—10 times more likely, according to the post.

Official Confirmation

The news was highlighted by a tweet from Rep. Bryan Steil, confirming the passage of the CLARITY Act.

The passage of the CLARITY Act marks a major regulatory milestone for Ethereum, recognising it as infrastructure and not a security. This paves the way for greater institutional adoption, especially for products like staked ETH ETFs.

Portfolio Updates (Bought or Sold) – 90 Days

Went in deeper into XRP & Solana they are both around 50% off their all time high.

ICYMI

Global Headlines

- Ongoing conflict between Israel and Iran has escalated, with both sides broadening strikes in the region. Link

- In the US, President Trump’s administration has rapidly issued executive orders reversing many previous policies, including heightened protectionist trade measures and changes to immigration enforcement. Link

- Protests and rallies continue across the US, particularly in response to immigration raids and federal interventions in cities like Los Angeles and New York. Link

UK Updates

- The UK government unveiled a major AI breakthrough designed to speed up planning permissions and help build 1.5 million homes, using a tool developed with Google DeepMind. Link

- Parliament is active with inquiries into online misogyny, sentencing reviews, and new legislation on sustainable aviation fuel and children’s wellbeing. Link

- The NHS is focusing on long-term health strategies and care system updates this month. Link

Other Notable Developments - Link

- The US Senate confirmed Billy Long as IRS chief despite controversy over past bribery allegations.

- The CDC’s new advisory panel includes several vaccine skeptics, raising transparency concerns from the medical community.

- A mistrial was declared in the remaining charges against Harvey Weinstein in New York, following a mixed verdict in his retrial.

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Disclaimer

Please remember this is not investment advice—I'm simply sharing my personal opinions and research. Always conduct your own due diligence before making any investment decisions.