Week in review
- U.S. Fed kept policy rate at 4.25%-4.50%
- Bank of Japan kept policy rate at 0.50%, slows JGB purchase reduction
- China May retail sales rose to 6.4% y/y, industrial production fell to 5.8% y/y
Week ahead
- U.S. May PCE index
- Japan May Tokyo CPI
- China industrial profits
Thought of the week
Recent escalation on the Israel-Iran conflict has pushed oil prices past levels above the start of this year, despite the prevailing concerns on oversupply. With Iran accounting for approx. 3% of global oil supply, a complete cessation of Iranian production could exert modest upward pressure on oil prices from current levels. However, emerging risk of disruptions in the Strait of Hormuz, with Saudi Arabia, Iraq, UAE and Kuwait collectively contributing to approx. 25% of global oil production, present a more significant risk, potentially driving oil prices to over US$ 100 per barrel and adverse impacts to the global economy. Looking back at previous geopolitical conflicts in the Middle East, such as the Iran-Iraq conflict in 1980, the Iraq-Kuwait conflict in 1990, and the Arab Spring in 2011, spikes in oil prices tend to be short-lived, as either infrastructure remained intact or the conflict de-escalated. The trajectory of the current situation, whether it results in a short-lived spike in oil prices or escalates further, will hinge on the extent of production disruptions and the evolution of geopolitical dynamics.
Contribution to Brent crude oil prices
Year-to-date change, USD per barrel
Source: Bloomberg, J.P. Morgan Asset Management. Data reflect most recently available as of 20/06/25.
Market data
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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.