Gold and oil prices soared following an Israeli missile strike against Iran late last night. Israel carried out an apparent “pre-emptive strike” against Iranian nuclear facilities, which included targets in the capital city of Tehran. Renewed tensions in the Middle East are currently causing havoc among a number of markets. Bullion prices flew past $3,400 an ounce earlier in the day and remain volatile in light of developing events. Meanwhile, Brent Crude prices were sent flying to $75 a barrel from just $69 yesterday as market participants weigh the impact of potential supply disruptions through the Strait of Hormuz and surrounding areas. Asian stocks wasted no time reacting to the unfolding situation, as indices across the region fell sharply from the opening bell this morning. For the stock markets that have yet to open, futures are looking equally terrible as traders brace for impact later in the day. The reaction in cryptocurrencies has been predictably dreadful, with Bitcoin falling below $104k but the broader alt market is experiencing far greater woes, sometimes dipping into double-digit losses.

Taking a step back from the Middle East, markets faced another surprising development earlier in the week in the form of the latest US inflation data. On Wednesday, CPI figures revealed that inflation once again fell below expectations in May, with headline inflation rising to 2.4% and core remaining at 2.8%. The following day, PPI data also came in lower than expected at just 0.1% month-over-month. Despite repeated warnings to the contrary, the rate of inflation has fallen so far this year and the increased tariffs have not had the disastrous consequences that many economists were predicting. President Trump once again criticised Jerome Powell for not reducing rates on the Dollar, going so far as to say he may “have to force” an interest rate change. Strong words, but of limited impact to interest rate traders so far. The Fed is set to convene next Wednesday and the overwhelming consensus is for another rate hold at 4.5%.

Michigan Consumer Sentiment may provide some interest later today but the unfolding events between Israel and Iran will likely take priority for the time being.

Very calm trading conditions so far this week. By and large, stock markets around the world have enjoyed modest gains over the past two days, buoyed in part by the ongoing trade talks between the US and China in London. Nothing concrete has emerged so far, but such agreements take time to solidify. Encouraging remarks from both parties suggest the discussions are off to a good start, with arrangements concerning rare earth minerals and magnets to be confirmed in the near future. The S&P 500 rose a further 0.5% yesterday, taking the index up to 6,038 points and narrowing the gap to the record high of 6,147 established back in February.

Currencies have had very little to say for themselves over the past few sessions. The Dollar currency index has remained flat around the 99 mark, while the major pairs have been remarkably stable in the absence of any significant market catalysts. The price action in gold suggests that investors have lost interest there as well. The precious metal remains near all-time highs but is now lacking conviction to pick a direction of travel. The huge safe-haven flows pouring into gold were tricky to explain at the best of times, but as the trade drama continues to simmer down, such flows become even more difficult to justify.

More interesting is the story currently unfolding in other precious metals. Silver continued to push higher on Monday, reaching an intra-day high of $36.89 per ounce. Such prices have not been seen in well over a decade but more pertinently, silver is up 27% since the start of the year, putting it neck and neck against gold. Both metals pale in comparison to platinum however, which flew past $1,200 an ounce on Monday and is up a staggering 36% this year. The reason behind the rise in silver and platinum is not clear. It is possible that the long gold trade is overcrowded and investors are looking to funnel money elsewhere. Simple supply and demand could also be a part of the reason, as could the growing popularity of platinum among jewellers and customers.

Cryptocurrencies have also perked up this week. Bitcoin rose back up to $110,000 on Monday, putting it within touching distance of last month’s record of $112,000 per coin. The move carried over to the rest of the crypto sphere and particularly to the DeFi sector, thanks to comments from SEC chairman Paul Atkins, who on Monday told regulators to allow decentralised finance firms to conduct operations with fewer restrictions. The language falls well in line with the new administration’s goal of loosening the regulatory noose that has strangled crypto development in recent years.

US CPI figures are just a few hours away, which should inject some activity into financial markets. Other than that, business as usual.

Markets were a little fearful going into last Friday’s NFP report, particularly given the dismal ADP employment data from earlier in the week, but in the end such fears were unfounded. The headline figure came in slightly above expectations at 139k new jobs, while the unemployment rate remained steady at 4.2%. As usual with non-farm payrolls, these numbers are susceptible to heavy revision over the next few publications, but doomsaying will fall on deaf ears for the time being – at least until the latest CPI numbers on Wednesday.

US stocks were predictably upbeat following the positive NFP report. All three major indices closed the day around 1% higher and the S&P 500 climbed back above 6,000 points for the first time since February, placing it around 2% down from its all-time high. The Dollar remained relatively stable, gaining half a percent over the usual basket and pushing the DXY back above 99. Gold on the other hand reacted somewhat poorly to the data, falling 1.3% to a $3,310 weekly close. More interesting is the price action in silver, which is currently pushing above $36 an ounce for the first time since 2012. Although gold has captured the lion’s share of headlines so far this year, both precious metals are up roughly 25% in 2025.

The odds of a rate cut are now nil. Interest rate traders are pricing in a rate hold during next week’s meeting with 100% certainty. President Trump, who has been characteristically vocal in criticising Jerome Powell, will soon put forward names for the Fed Chairman’s replacement, although the incumbent is under no obligation to relinquish his position until May 2026. Kevin Warsh, a former Fed governor, is seen as the frontrunner to take over the role.

US-China trade talks are expected to re-emerge this week, with negotiations scheduled for later today in London. The economic calendar is looking relatively sparse again over the next few days, with very little to offer until the latest US CPI report on Wednesday, followed by PPI on Thursday. Headline consumer inflation is expected to tick up slightly to 2.5% annually, while headline PPI is expected to rise to 0.2% in May. There is a small splattering of earnings reports this week, including Gamestop (GME) and Oracle (ORCL), but Tesla (TSLA) will probably also remain relevant due to the spat between Musk and Trump, which seems to have mostly blown over already.

Services PMIs rolled in from around the world over the past couple of days, giving markets more economic data to chew on. The main Eurozone figure fell in line with predictions at 48.9, meaning the services and manufacturing sectors are now both in contraction for the common currency area. The figure for Germany was particularly grim, falling to its lowest level since 2022 with a 47.1 print. In China, the index fell dead on predictions at 51.1, a slight improvement on the previous month. Over in the US meanwhile, the services PMI came in at 53.7, beating expectations and marking a sharp rebound from the April figure.

Sadly, the good news did not extend to the US labour market. The ADP employment change missed consensus by a country mile on Wednesday, falling to just 37k new jobs versus expectations of 115k. Not exactly a thrilling report, but by and large markets are more interested in the NFP numbers set for publication later today. While the two reports often provide conflicting information, the ADP numbers do not bode well. Should the NFP report prove to be anywhere near as bad, there will be significant ripples throughout markets later today. Of course, poor employment figures are one of the necessary stepping stone towards lower interest rates. The US labour market has been remarkably resilient up until this point but a strong shift could force the Fed’s hand. Current predictions are set at 130k new jobs and unemployment holding steady at 4.2%.

In other news, Tesla stock (TSLA) reacted miserably to the unfolding spat between founder Elon Musk and president Trump yesterday. Musk has been extremely vocal in his criticism of Trump’s spending bill, complaining that it completely erases all the savings painstakingly achieved by the DOGE initiative. Things escalated on Thursday when Trump argued that the easiest way to save money would be to terminate the government subsidies and contracts enjoyed by the electric car manufacturer. The back-and-forth pushed Tesla (TSLA) stock down 14% by yesterday’s close, dragging the S&P 500 and Nasdaq indices down along with it. Fun times.

Not much to talk about so far this week other than raw economic data. Manufacturing PMIs from around the world poured in over the last couple of days and the results fell largely in line with expectations. In Europe, the figure for the Eurozone manufacturing sector rose slightly to 49.4 from 49 the month prior. A slight improvement but the sector remains in contraction for the common currency area. Spain meanwhile surprised markets by jumping into expansion with a figure of 50.5 in May. The worrying statistic however is that Germany’s manufacturing sector has now been in contraction for the past 35 months in a row. On the other side of the Atlantic, S&P Global published a figure of 52.0 for the US manufacturing sector, while the less expansive ISM figure came in substantially lower at 48.5. Manufacturing figures from China revealed a sharp drop in May, with the PMI falling down to 48.3 from 50.4 in April. Manufacturing data give way to services PMIs for the remainder of the week, starting once again with Europe before moving on to the US and then China early on Thursday morning.

Moving onto the labour market, the Job Openings and Labour Turnover Survey (JOLTS) showed an unexpected rise in US job openings yesterday. Predictions converged on 7.1 million new job openings in April, but the actual figure came in quite a lot higher at 7.39 million. Later today, the latest ADP employment change will report the May jobs figures, but the real meat of the sandwich is of course the NFP drop on Friday. Traders will have to wait a while longer for some degree of volatility.

The saying “sell in May and walk away” has not played out so far this year. US stock markets enjoyed historic gains last month, with all three major indices undergoing strong rallies following the short-lived downturn the month prior. The Dow closed the month 4% higher, while the S&P 500 experienced its best May since 1990 with a 6.1% gain. The Nasdaq Composite meanwhile added the better part of 10% to its tally. In Europe, the German DAX pushed to new record highs, gaining 6.7% over the course of the month. The FTSE 100 climbed 3.3% over the same time frame. In Asia, the Nikkei 225 and Hang Seng Index matched each other with a 5.3% rise. With all that said, summer is just around the corner and historically the warmer months have not been kind to stocks.

For all the volatility in metals, gold closed the month completely flat at $3,289 an ounce. A similar story for the Dollar, which lost a measly 0.2% against the usual basket of currencies. On the other hand, cryptocurrencies had a stellar month, with Bitcoin gaining 11%, reclaiming six figures and establishing a new record high of $112k. A number of market participants are coming round to the idea that aggressive tariffs are being used as a negotiation tool rather than anything more sinister. Early reactions certainly erred on the side of drama but by and large markets are beginning to wise up.

In the US, more good news emerged on the inflation front last Friday with the release of the most recent PCE price index. The year-over-year figure fell to 2.1% in April while prices excluding food and energy rose by 2.5% – the lowest increase in four years. The economic data will continue to pour in over the next week, starting with manufacturing PMI numbers from across the world later today, followed by services PMIs later in the week. Tuesday offers the first glimpse into the US labour market with the latest JOLT survey, swiftly followed by the ADP employment change on Wednesday. Later on the same day, the Bank of Canada is expected to hold rates steady on the Canadian Dollar at 2.75%, while on Thursday the European Central Bank is looking to lower rates on the Euro by another 25-bps to 2.15%. Capping off the week, non-farm payrolls will hit the newswires on Friday. Current predictions are looking at 130k new jobs and unemployment remaining stable at 4.2%.