Market Update – June 16, 2025: Will the G7 Be Unified?

Equities tread water, G7 in focus, geopolitics stir the pot

Markets are starting the week cautiously. Investors are eyeing a storm of potential market movers from central bank meetings to the unfolding G7 summit with a notable side glance toward the Middle East.

Equities: Subdued but steady

U.S. markets are slightly in the red this morning. The S&P 500 is down ~0.1% as traders weigh a volatile oil market and a jam-packed macro calendar. European bourses are more upbeat DAX, CAC 40, and FTSE 100 are all modestly higher, pricing in a calmer tone from expected central bank policy updates later in the week.
Tech and consumer stocks are range-bound, while energy names remain choppy caught between higher oil prices and geopolitical anxiety.

Oil & Geopolitics: Pricey crude, tense headlines

Crude oil rose sharply late last week on renewed Israel–Iran tensions, pushing WTI to the $77 level, though it’s since given up some gains. The worry? Escalation could reignite global inflation worries just as central banks were beginning to breathe easier.
With shipping lanes and production risks back in headlines, markets are jittery. Energy traders are watching every headline. Equity investors, meanwhile, are adjusting inflation expectations accordingly.

Central Banks: Policy pause or pivot?

This week features a policy parade: the Fed, BoE, BoJ, SNB, and more. No major surprises are expected from the Fed, but attention is firmly on the dot plot specifically, whether the projected two cuts for 2025 remain credible.
Elsewhere, the SNB could opt for cuts amid softer inflation data, while Japan’s BoJ may nudge forward with tapering guidance. For now, policy divergence remains the name of the game.

G7 Summit: No communique, but plenty of signals

The G7 Summit in Canada is less about grand agreements and more about reading between the lines. Leaders have ditched the traditional communique in favour of individual policy statements a clear signal that consensus is fragile.

Key takeaways:

• Trade tensions: Behind closed doors, pressure is building over U.S. auto tariffs. Europe and Japan are urging calm to protect broader economic cooperation.

• Russian sanctions: The EU, UK, and Canada are floating a tougher oil price cap, even if the U.S. resists.

• Middle East: The Israel–Iran conflict has shot up the agenda, with leaders privately coordinating response strategies both economic and security-based.

Markets aren’t pricing in any market-moving breakthrough, but bilateral outcomes could affect trade-sensitive sectors.

Fikiran Akhir

Today’s market is a wait-and-watch game. Investors aren’t panicking, but neither are they pushing forward. The G7’s lack of cohesion underscores broader geopolitical uncertainty, while this week’s central bank roundtable could shift rate expectations globally.
In short: keep your eyes on oil, ears on Powell, and a side glance toward Canada because while nothing has broken yet, the next few sessions could tip the balance.

Till next time, all of you “Trade Safe”!

By James Trescothick
Head of Market Research and Market Analysis

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.