Daily Market Outlook, June 20, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

European equity futures climbed, while the dollar weakened after the White House announced that President Donald Trump would decide within two weeks whether the U.S. would collaborate with Israel in launching strikes against Iran. The regional MSCI index advanced by 0.5%, with stock markets in South Korea, Hong Kong, and China showing positive performance. Meanwhile, S&P 500 futures fell about 0.2% from Wednesday’s close during the Asian session, compared to a sharper 0.9% drop on Thursday when U.S. markets were closed for the Juneteenth holiday. Brent crude prices declined by roughly 2% on Friday, trimming gains from earlier in the week. Treasury yields held steady, while the dollar index was on track for a second consecutive day of losses. The yen strengthened to around 145 per dollar. Traders grew increasingly cautious following reports that senior U.S. officials were preparing for a potential strike on Iran in the near future. Market sentiment was already fragile after the Federal Reserve downgraded its growth forecasts for the year and signalled rising inflation pressures. Adding to tensions, Israel escalated attacks on Iran’s nuclear facilities on Thursday, warning that its actions could destabilise Tehran’s leadership. Both sides now await Trump’s decision on whether the U.S. will join Israel in the offensive.

The UK GfK Consumer Confidence Index for June increased by two points to -18. This contrasts with the sharp drop in May retail sales, which fell by 2.8% month-on-month on the ex-fuel measure. However, this decline follows a robust April, driven by weather-related food sales, making a correction downward almost inevitable. A more significant takeaway is the doubling of the ex-fuel price deflator from 0.6% year-on-year in April to 1.2% in May, indicating that April’s rising cost pressures have belatedly impacted sales volumes. Stripping out weather-related fluctuations, the three-month smoothed average growth in retail sales volumes up to May appears less concerning at 0.8% year-on-year. Additionally, the May public finances data reveals a mixed picture. The headline borrowing measure (PSNBex) shows a cumulative deficit of £37.7 billion for the first two months of 2025-26, which is £3 billion lower than the Office for Budget Responsibility (OBR) forecast. However, not all indicators favor the government. On a cash basis (CGNCR), the government required £39.9 billion over April and May, exceeding the OBR benchmark by £7.4 billion. The early overshoot raises concerns about the ability to contain gilt supply, given that the monthly fiscal profiles depend on stronger performance later in the year and that cash figures (CGNCR) are typically less subject to revisions than PSNBex.

The Bank of England June MPC minutes suggest an August rate cut is likely, with a 6-3 vote in June leaning dovish. Taylor, Dhingra, and Ramsden supported a 25bp cut, exceeding expectations of just two dissenters. The minutes highlighted a "growing margin of slack in the labour market," signalling a potential shift from May's divided 2-5-2 vote, as labour market resilience cited earlier by Mann and Pill now appears to be waning. Markets currently price a 70% chance of a 25bp cut to 4% in August. However, the MPC maintained a cautious tone, emphasising a "gradual and careful" approach and noting "two-sided" inflation risks. References to rising energy prices amid Middle East tensions further indicate no firm commitment to an August cut, leaving the post-August outlook uncertain.

Overnight Headlines

  • France Pushes For Joint Debt To Bolster International Role Of Euro

  • China Keeps Key Loan Prime Rates Unchanged After May Cut

  • BoJ Minutes Show Board Still Committed To Hike Path

  • Japan’s Core CPI Hits Highest Since Jan 2023, Pressures BoJ

  • Taiwan On Alert As China Boosts Pacific Military Activity

  • Europe Struggles To Offer Trump Off-Ramp In Iran Bombing Crisis

  • Trump To Decide On Iran Strike Within Two Weeks, WH Says

  • Russia Warns Strike On Iran’s Nuclear Plant Could Cause Catastrophe

  • Russia’s Novak Says OPEC+ Should Continue Oil Output Increases

  • Oil, War And Tariffs Tear Up Markets’ Central Bank Roadmap

  • Mideast Conflict Sends Diesel Prices Surging Across Europe

  • Israeli Strikes Hit Iranian Reactor, IAEA Confirms

  • Canada Warns Of Counter-Tariffs As US Metals Dispute Escalates

  • Powell Signals Hawkish Fed Is Flying Blind Amid Market Volatility

  • UK Consumer Confidence Improves On Brighter Economic Outlook

  • India Chases Trump Tariff Deal After UK Agreement

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1395-1.1405 (3.1BLN), 1.1425 (230M), 1.1445-50 (1.3BLN)

  • 1.1500 (3.2BLN), 1.1515-20 (1.2BLN), 1.1545-50 (1.03BLN)

  • 1.1600 (1.2BLN), 1.1615-25 (1.5BLN), 1.1650-55 (617M)

  • USD/JPY: 144.00 (846M), 144.95-00 (847M), 145.25 (450M)

  • 145.95-00 (3.0BLN), 146.50 (281M), 146.75 (524M), 147.00 (868M)

  • EUR/JPY: 167.50 (952M), 170.00 (390M)

  • USD/CHF: 0.8150 (430M), 0.8325 (240M)

  • EUR/CHF: 0.9295 (312M), 0.9330 (278M), 0.9450 (326M)

  • EUR/GBP: 0.8500 (641M), 0.8550-55 (653M), 0.8565 (602M)

  • GBP/USD: 1.3350-60 (643M), 1.3400 (370M), 1.3500 (280M)

  • 1.3540-50 (325M)

  • AUD/USD: 0.6365-75 (1.13BLN), 0.6390-00 (588M), 0.6480-85 (700M)

  • 0.6510 (406M), 0.6550 (278M), 0.6570-75 (680M)

  • USD/CAD: 1.3625-35 (828M), 1.3700-10 (1.34BLN), 1.3725 (260M)

CFTC Positions as of the Week Ending June 13th 

  • Speculators have reduced their net short position in CBOT US Treasury bonds futures by 22,628 contracts, bringing it down to 79,745.  

  • They have also decreased their net short position in CBOT US Ultrabond Treasury futures by 24,696 contracts, now totaling 203,747.  

  • Speculators have increased their net short position in CBOT US 10-year Treasury futures by 18,845 contracts, reaching 724,101.  

  • Similarly, the net short position in CBOT US 5-year Treasury futures has risen by 74,384 contracts to 2,470,920.  

  • The net short position in CBOT US 2-year Treasury futures has gone up by 36,591 contracts, now at 1,180,516.  

  • Equity fund managers have raised their net long position in S&P 500 CME by 10,532 contracts, reaching 825,013.  

  • Equity fund speculators have increased their net short position in S&P 500 CME by 31,419 contracts, now at 316,744.  

  • The net long position for the Japanese yen stands at 144,595 contracts.  

  • The euro's net long position is 93,025 contracts.  

  • For the British pound, the net long position is 51,634 contracts.  

  • The Swiss franc shows a net short position of -21,268 contracts.  

  • Bitcoin has a net short position of -2,009 contract

Technical & Trade Views

SP500 Pivot 5900

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Above 5900 target 6100

  • Below 5800 target 5700

EURUSD Pivot 1.12

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 1.11 target 1.19

  • Below 1.11 target 1.0950

GBPUSD Pivot 1.34

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 1.34 target 1.38

  • Below 1.3350 target 1.32

USDJPY Pivot 147

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 147.10 target 148.26

  • Below 146.53 target 139

XAUUSD Pivot 3365

  • Daily VWAP bearish

  • Weekly VWAP bullish 

  • Above 3410 target 3600

  • Below 3240 target 3000

BTCUSD Pivot 105k

  • Daily VWAP bearish

  • Weekly VWAP bearish

  • Above 105k target 118k

  • Below 103k target 100k