Market Update – June 17, 2025: Trump’s G7 Walkout Adds to the Uncertainty

Global markets began the day on the back foot as risk sentiment deteriorated further following a surprise move from former U.S. President Donald Trump, who left the G7 summit in Quebec earlier than expected. The early departure has stoked investor anxiety already heightened by geopolitical tensions in the Middle East and uncertainty around central bank trajectories.

Crude Oil Spikes on Iran Risk

WTI and Brent crude rose 1.5% and 1.8% respectively, after Israel issued warnings for civilians to evacuate Tehran, further escalating concerns of military conflict. Trump’s departure from the G7, with vague references to “pressing matters back home,” has led to speculation that fresh U.S. involvement may be on the table.

Brent crude now trades near $74.20, while WTI is eyeing $70.80 a level not seen since late April.

Dollar Gains, Yields Drop

The U.S. dollar remains well-bid, benefiting from safe-haven flows, particularly against high-beta currencies like the Aussie and CAD, both under pressure. Meanwhile, U.S. 10-year yields have dipped below 4.20%, with traders rotating into Treasuries on geopolitical fears and ahead of the FOMC meeting tomorrow.

Gold remains around the $3386/oz, reinforcing the risk-off bias.

Focus: Trump’s G7 Exit – What It Means for Markets

Trump’s early exit from the G7 paired with sharply worded remarks rejecting French calls for a ceasefire has rattled market expectations that diplomacy might ease global tensions. The move injects fresh uncertainty into:

• Oil markets – on expectations of further escalation with Iran.

• Israel/Iran Conflict – Trump hinted at “much bigger” issues at play, reigniting fears of a escalation not de-escalation of the Israel/Iran Conflict.

• Central banks – especially the Fed, which is now cornered between sticky inflation and renewed external risk.

Memandang ke Hadapan

Markets will remain highly reactive to headlines today. Volatility is expected to stay elevated heading into Wednesday’s FOMC decision, where Fed Chair Powell will have to balance a hawkish inflation outlook against a backdrop of rising geopolitical risk

Bottom Line:

Markets are navigating a treacherous landscape with multiple headwinds: geopolitical escalation, political uncertainty, and central bank ambiguity. For now, the path of least resistance is down for equities and up for safe havens.

Stay cautious and watch the headlines. Volatility looks like it’s just warming up.

Till next time, all of you trade safe!

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.