Week in review

Week ahead

• 24/06 – U.S. – New Home Sales
• 26/06 – U.S. – Durable Orders
• 28/06 – JP – Unemployment Rate
• 28/06 – U.S. – PCE Inflation

Thought of the week

Over the past week, crude oil prices jumped on falling U.S. stockpiles and rising geopolitical risks in the Middle East. Prior to last week’s rally, both the price of Brent and WTI crude had fallen close to 20% since late April, with WTI crude briefly falling into bear territory early June. The lower oil price has weighed on the U.S. energy sector, which is down 6% in the past three months compared with a near 5% gain for the broader index. Although the rising tensions in the Middle East can support prices on fears of supply disruptions, the broader trend is for lower oi prices as global demand declines and another set of political risks around trade dominates. Oil prices will be prone to moves in line with geopolitical conflicts in the short-term. Longer term, however, the outlook is more reliant on the outcome of the upcoming Trump-Xi meeting and general levels of global demand.

Chart of the week

Oil prices lifted by geopolitical skirmishes

U.S. dollar per barrel

Source: Factset, J.P. Morgan Asset Management.

All returns in local currency unless stated otherwise.
*Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.