Global News Summary: 23-27 June 2025

Global markets navigated a wave of geopolitical, monetary, and trade developments. The US bombed Iranian nuclear sites early in the week, spiking oil prices before a ceasefire cooled tensions and sent the S&P 500 to a record high above 6,170. Despite Powell pushing back on July rate cuts, investors still priced in two by year-end. Trump confirmed new trade deals with China and the UK, while goods exports fell –5.2% amid lingering tariff fallout. The UK posted a –0.3% GDP contraction, while Japan’s export volume rose even as prices fell, raising recession flags. Inflation stayed sticky in the UK (3.4%) and Tokyo (3.1%), while Switzerland cut rates to zero amid deflation. On the AI front, OpenAI secured a $200M Pentagon deal, xAI raised $5B debt, and Meta dropped talks with Runway AI. Energy, defense, and AI sectors led corporate headlines in a week defined by resilience amid risk.

United States

• Geopolitics:

  • Trump escalated Middle East tensions with bombings of Iranian nuclear facilities, triggering a jump in oil prices to five-month highs; later confirmed a ceasefire on 24 June.

  • Issued a “Worldwide Caution” alert for US citizens globally.

  • Trump confirmed a US-China trade deal was signed on 27 June and revoked threats of taxing foreign investments after market backlash.

  • Trump also raised the possibility of regime change in Iran, stoking global concern.

• Markets:

  • S&P 500 closed above 6,170 (record high) on 28 June despite oil and tariff headlines.

  • Fed Chair Powell ruled out cuts before September, citing tariff-induced inflation risk, though Fed's Bowman had earlier supported a July cut.

  • Dollar rose; Bloomberg Dollar Index +0.1% during the week.

  • WTI crude peaked then fell to $65.15; gold dropped 1.7% to $3,270.92.

  • Bitcoin fell 0.8% to ~$106,900.

United Kingdom

• Trade & Economy:

  • Trump signed an executive order to implement the US–UK trade deal; carmakers benefit immediately, steel producers delayed.

  • Vehicle production fell 33% YoY in May due to U.S. tariffs.

  • PM Starmer pledged 5% of GDP to national security by 2035.

  • UK seeks global recognition of British professional certifications.

• Macro Data:

  • GDP contracted –0.3% in April.

  • Inflation held at 3.4% in May, still well above the BoE’s 2% target.

  • BOE held rates at 4.25% but signalled a possible cut in August.

  • Consumer confidence improved slightly in June to –18.

Euro Area

• Trade & Defence:

  • Germany to boost defence spending by 66% by 2029, overtaking UK and France.

  • Von der Leyen optimistic about a US–EU trade deal by Labour Day (early Sept).

  • EU rejected economic meeting with China; threatened retaliation over Trump’s tariffs.

• Monetary Policy:

  • ECB seen likely to cut rates once more to 1.75% in September.

  • Officials caution against pre-committing rate paths due to Middle East and U.S. uncertainty.

Japan

• Monetary Policy:

  • BoJ to slow bond purchase tapering to maintain stability.

  • Inflation slowed to 3.1% in Tokyo in June, easing energy price pressures.

  • PM Ishiba refused US auto tariffs, warning they risk recession.

  • Japan emphasized protecting national trade interests during G7.

China

• Trade:

  • Trump signed trade deal with China on 27 June after London framework agreed weeks prior.

  • Exports to U.S. fell 34% YoY in May, reflecting tariff damage.

  • Retail sales grew 6.4% YoY in May, beating expectations.

Switzerland

• Monetary Policy:

  • SNB cut rates to 0.00%, stopped short of going negative.

  • Inflation remained negative at –0.1%, CHF rose on safe-haven flows.

  • SNB signalled readiness for further cuts to curb franc strength.

Canada

• Trade talks with U.S. called off by Trump, causing CAD weakness.

• Announced 100% tariffs on non-US steel and aluminium imports in retaliation.

Australia

• Inflation rose to 2.1% in May, with trimmed mean at 2.4%.

• Housing and energy continued contributing to price pressure.

New Zealand

• Q1 GDP grew +0.8% QoQ, beating forecasts.

• NZD stable; growth supported by lower interest rates and strong exports.

Economic Growth

• U.S. goods exports fell –5.2% MoM in May, reversing a +3.5% gain in April.

• UK GDP –0.3% in April as taxes and tariffs hit services and trade.

• NZ GDP +0.8% Q1.

• China retail sales +6.4% YoY.

• Japan: exports –1.7% YoY in May, but volumes rose +1.8%, suggesting price cuts.

Jobs

• UK unemployment rose to 4.6% in April, –55K jobs.

• U.S. consumer confidence dropped to 93 in June, suggesting tariff anxiety.

• Australia’s jobless rate steady at 4.1%, but part-time jobs fell.

• Microsoft to cut thousands of jobs amid AI spending pivot.

Debt Securities

• U.S. 10Y yield rose to 4.27%, driven by Powell’s hawkish tone.

• German 10Y rose to 2.59%, UK 10Y to 4.50%.

• Japan reduced super-long bond issuance to ease yield spikes.

• CHF strength under pressure, despite SNB’s zero-rate cut.

Artificial Intelligence

• Meta considered but dropped Runway AI acquisition.

• OpenAI won $200M Pentagon contract; phasing out Scale AI partnership after Meta’s investment.

• PhysicsX raised $135M from Siemens and Temasek.

• Softbank’s Son plans $1 trillion AI & robotics complex in Arizona.

• xAI raised $5B debt, nearing $9.3B valuation despite burn rate of $1B/month.

• Microsoft to lay off sales staff amid AI cost rebalancing.

• Apple and Google under scrutiny for AI data privacy in Europe.

Inflation

• US core PCE inflation steady; Powell flagged summer tariff risks.

• UK CPI 3.4% in May; food still main driver.

• Australia CPI 2.1%, trimmed mean 2.4%.

• Switzerland –0.1% deflation.

• Tokyo inflation 3.1%, easing.

Recession Risk

• U.S. exports falling, goods demand shrinking — red flag for growth.

• Japan’s economy teetering: Q1 contraction + weak exports raise technical recession risk.

• UK GDP contraction, falling production, persistent inflation raise stagflation concerns.