A week dominated by geopolitics and central banks

Summary

Moving Markets – A Week Dominated by Geopolitics and Central Banks

Podcast: Moving Markets | Host: Julius Baer
Date: June 19, 2026
Host: Helen Freear
Guests: Mike Rauber (Market Update), Tim Gagy (FX & Metals Strategy)

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Episode Overview

This episode captures a particularly eventful week in global financial markets, characterized by major geopolitical developments and decisive moves from several central banks. The hosts focus on the significant market impacts following a landmark US-Iran agreement, new central bank policy signals (notably from the US Federal Reserve and the Bank of Japan), volatile sector performance—including tech rallies and commodity swings—and nuanced FX and metals market analysis.

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Key Discussion Points & Insights

1. Major Central Bank Actions & Market Reactions

• US Federal Reserve – Kevin Walsh’s First Policy Meeting

  • New Fed Chair Kevin Walsh signaled a more aggressive anti-inflation stance.
  • Markets quickly adjusted, increasing expectation of further US rate hikes.
    • “Kevin Warsh's first meeting as Fed chair signaled a stronger focus on combating inflation. Now the market reacted decisively, with bets on further rate rises increasing sharply.” (Mike Rauber, 00:49)
  • US Treasury futures saw record volume: Over 500,000 contracts traded post-meeting (about 4x normal daily volume).

• Bank of Japan – Surprise Rate Hike

  • Raised interest rates to highest since 1995, marking a historic shift.
  • The yen continues to weaken and nears 40-year lows against the dollar.

• Bank of England – Status Quo Amid Political Uncertainty

  • Kept rates steady at 3.75% amid easing inflation, but left the door open for potential hikes.
  • Politics loom; Andy Burnham’s by-election win raises questions about future fiscal policy under possible new leadership.

• Swiss National Bank – Holding at 0%

  • Fourth consecutive meeting keeping rates unchanged, thanks to stable inflation (currently 0.6%).
  • “Unlike many other central banks grappling with inflation well above target, Switzerland enjoys a comparatively stable situation... though policymakers also acknowledge ongoing external risks, particularly related to U.S. trade policies.” (Mike Rauber, 04:09)

• Other Global Moves

  • Indonesia, the Philippines, and Czech Republic all hiked rates to battle inflationary pressures.

2. US Tech Rallies & Company-Specific Developments

• Tech Stocks Outperform

  • Amid overall US equity weakness post-Fed, tech surged.
  • The Nasdaq was up nearly 2% largely on company news.
  • Apple and Intel: Partnership to bring chip design and manufacturing back to the US.
    • “President Trump announced an Apple Intel partnership to return chip design and manufacturing to the U.S. Intel’s shares rose 11% to a record high.” (Mike Rauber, 02:02)
  • Apple to raise prices due to higher component costs; SanDisk (+12%), Micron (+9%).

• SpaceX Post-IPO Volatility

  • SpaceX shares fell 10% after the previous week’s breakout IPO.
  • Now seeking $20bn in debt markets; Moody’s assigned a low investment grade rating.

3. Geopolitical Tensions and Energy Markets

• US-Iran Agreement:

  • Marked as a major driver both for risk sentiment and commodities.
  • Ongoing negotiations remain fragile—news of the US Vice President not traveling to Geneva weighed on Asian risk assets.

• Oil Markets:

  • Brent crude fell sharply, from speculation of $150+ to sub-$80 per barrel.
  • The US lifted its oil blockade on Iran, letting 10 million barrels move through the Strait of Hormuz.
    • “What a sea change. Now, overnight, U.S. central Command said it has lifted the blockade on Iranian ports, allowing tankers to resume transit through the Strait of Hormuth.” (Mike Rauber, 05:35)

4. FX and Metals Market Dynamics (with Tim Gagy)

[Segment starts at 07:09]

• US Dollar Strength:

  • Dollar surged following the Fed’s unexpectedly hawkish tilt.
  • “My view is that [Walsh] is very realistic ... intends to hand off some of the responsibility for decision making away from committee opinions and into some hard analysis, which suggests they're going to take inflation more seriously... The market took its medicine and bought some dollars.” (Tim Gagy, 07:24)

• Key FX Levels:

  • EUR/USD: Testing year-long range support (1.14-1.18)
  • GBP/USD: Testing support (1.3150-1.36)
    • “I think we probably should break these supports, but I don’t think that will necessarily indicate dramatic new dollar highs..." (Tim Gagy, 08:10)

• Gold & Precious Metals:

  • Gold facing headwinds, third weekly loss, dropped below $4,200/oz.
  • Longer-term, fundamentals solid; Tim prefers using structured products or covered puts over outright purchases.
    • “Nonetheless, in gold I think longer term this remains an opportunity because the fundamentals are solid... The big support is 4,000 and below that it’s hard to say, so I would be very careful not to overextend.” (Tim Gagy, 08:54)
  • Silver: Highly volatile but liquidity is thin; major support at $60/oz.
    • “Nonetheless, volatility is high so you get well paid at least for taking risks in silver... So tread very carefully.” (Tim Gagy, 09:46)

• Swiss Franc & Japanese Yen:

  • Swiss franc’s weakness is relief for investors and the SNB; rate differentials driving capital outflows.
  • Yen’s slide approaches 40-year lows; intervention likely to have short-lived impact.
    • “The bank of Japan may well intervene... but it will only serve to provide a super entry point for new yen short positions. Intervention cannot change the direction of travel any more than sweeping up leaves can stop new leaves from falling.” (Tim Gagy, 10:28)

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Notable Quotes & Memorable Moments

• On the new Fed Chair’s communication style:
  “The statement itself was famously short, which I love, by the way. And I had never realised quite how wordy Powell was until I listened to Walsh on Wednesday.”
  – Tim Gagy, 07:27

• Wry market wisdom:
  “One should never trade on hope any more than one should trade on fear.”
  – Tim Gagy, 07:55

• On the realities of currency intervention:
  “Intervention cannot change the direction of travel any more than sweeping up leaves can stop new leaves from falling.”
  – Tim Gagy, 10:34

• Humour Break:
  “Finally, Helen, my friend Rob asked me, what's the difference between ignorance and indifference? I said, Rob, I don't know and I don't care.”
  – Tim Gagy, 11:27

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Timestamps for Key Segments

• 00:01 – Episode introduction, overview of topics
• 00:30 – Week’s global news summary: US-Iran, central banks, market volumes
• 01:27 – Equity market reactions, tech sector news
• 02:41 – SpaceX update and bond offering
• 03:00 – Bank of England and UK politics
• 04:02 – Swiss National Bank policy
• 04:42 – Rate hikes in emerging markets
• 05:05 – Asian equity market update, impact of paused US-Iran talks
• 05:21 – Oil market analysis: sanctions lift, prices crash
• 05:56 – Gold, yen, dollar movements
• 06:43 – Economic data roundup, market holidays
• 07:09 – FX & metals deep dive (Tim Gagy)
• 07:24 – Dollar, Fed communication, market strategy
• 08:44 – Gold and silver, tactical approaches
• 10:00 – Swiss franc and yen analysis, intervention debate
• 11:27 – Market humour and wrap-up

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Conclusion

This episode distills a dramatic week in the markets, shaped by powerful geopolitical shifts and central bank maneuvering. The discussion ranges from US tech rallies and energy volatility to sharply defined FX and metals tactics for investors. With insightful commentary, memorable wisdom, and deft use of market anecdotes, this episode is invaluable for any listener seeking context and strategy around a fast-moving global landscape.

Transcript

[A]

Good morning everyone, and welcome to Julius Baer's Moving Markets podcast. It's Friday the 19th of June, and my name is Helen Freear. My first guest this morning will be Mike Rauber and he'll be giving us a roundup of the latest news in financial markets. And then I'll be catching up with Tim Gagy on the latest moves in FX and metals markets. But first up with the market news, it is Mike. Good morning, Mike. Thanks for joining me.

[B]

Good morning, Helen.

[A]

So it's been a remarkably active week across global markets marked by a landmark U. S. Iran agreement, the bank of Japan's decision to raise interest rates to the highest level since 1995, and the federal Reserve Chair Kevin Walsh's first policy meeting.

[B]

Absolutely. So Kevin Warsh's first meeting as Fed chair signaled a stronger focus on combating inflation. Now the market reacted decisively, with bets on further rate rises increasing sharply. What we did see in financial markets, U.S. treasury futures trading hit a record after the Fed's meeting with over 500,000 contracts traded about four times normal volume. It seems investors are preparing for a more aggressive Fed.

[A]

So that's quite a change in expectations. How are equity markets digesting this potential shift?

[B]

On Wednesday, the US Was weak right after the Fed meeting. European equities were somewhat softer yesterday, influenced by the anticipation of higher US Rates. But Germany and France gained slightly. They continue to benefit from oil's decline. The US Bucked the trend yesterday with strong gains in technology. The Nasdaq jumped almost 2%.

[A]

And that was related to company specific news involving Apple and Intel. Right. Could you tell us a bit about this please, Mike?

[B]

Yeah. So President Trump announced an Apple intel partnership to return chip design and manufacturing to the U.S. intel's shares rose 11% to a record high. And Apple, it said it will raise product prices due to higher component costs including memory and storage. SanDisk gained 12% and Micron nearly 9%.

[A]

Okay, let's turn to SpaceX. Because its stock fell 10% yesterday, reversing some of its advance since last Friday's IPO. But we also got some more news on what the company wants to do, didn't we?

[B]

Yes, indeed. After raising nearly 86 billion in the IPO last Friday, that does not seem to be enough. Now news outlets report that the company is looking to raise $20 billion in the debt market. And the rating agency Moody's has given it a low investment grade rating.

[A]

Okay, let's move on and talk about central banks. Because the bank of England held firm on its current policy rate yesterday what does this signal? Amidst the changing global landscape, they capped rates at 3.75%.

[B]

Now, that's supported by relatively subdued inflation numbers this week. But the bank of England has not ruled out further increases. But easing inflation reduces the need to tighten policy. Our analysts expect rates to stay unchanged through 2026. But as often these days, politics matter. And so also in the UK Greater Manchester Mayor Andy Burnham won the Makerfield by election yesterday. His victory challenges Prime Minister Keir Starmer. And Burnham has made clear he's aiming for the top job, calling it a final chance to change for Labour. Now, markets worry that a Burnham premiership could lead to a sharp rise in fiscal spending.

[A]

Okay, and what about Switzerland? The Swiss central bank continued its run of holding rates steady.

[B]

Absolutely. So it kept its policy rate at 0% for the fourth consecutive meeting. Unlike many other central banks grappling with inflation well above target, Switzerland enjoys a comparatively stable situation, with inflation currently at just 0.6%. Now, the central bank projects similar levels of price growth through 2026 and 2027. However, policymakers also acknowledge ongoing external risks, particularly related to U.S. trade policies.

[A]

And we've also seen some countries reacting to greater inflationary pressures. Indonesia, the Philippines and the Czech Republic all did choose to raise rates yesterday. Now let's turn our attention to market action in Asia. Stocks there, along with global equity futures, are down so far on the final day of the week. Can you tell us more, please, Mike?

[B]

Yeah. Report that Vice President J.D. vance did not depart Thursday night for face to face negotiations with Iran in Geneva is weighing on risk sentiment this morning. This just shows that the road to any peace deal is likely to be long and winding.

[A]

So geopolitics continuing to cast a shadow then. Oil prices have been sharply lower this week, with Brent oil down to below $80 per barrel. Where do things stand there at the moment?

[B]

Remember, not long ago, some analysts were predicting $150 Brent or more. So what a sea change. Now, overnight, U.S. central Command said it has lifted the blockade on Iranian ports, allowing tankers to resume transit through the Strait of Hormuth. Around 10 million barrels of oil are now moving through or leaving the Strait.

[A]

Okay, just lastly then, let's talk very quickly about currencies and precious metals. Gold has been facing headwinds, and the Japanese yen continues to weaken.

[B]

Gold is on its way to a third consecutive weekly loss. At the courtesy of a more hawkish Fed, gold slipped below $4,200 per ounce earlier in Asia. On the flip side, markets have shown some renewed love for the dollar as for the yen, it weakened to above 161 against the US dollar. That's overnight nearing a four decade low. The Japanese Finance Minister has also weighed in Hinton at the possibility of intervening in the market.

[A]

All right, and what's happening today, Mike? What should we be looking out for?

[B]

We already got some encouraging European economic data for May. German producer prices rose less than expected while UK retail sales came in well above expectations. Please note the US treasury market and US equities overall will not trade today due to Juneteenth holiday. And that's all from me.

[A]

Wonderful. Thanks a lot, Mike, for the great roundup this morning.

[B]

Thank you very much for having me.

[A]

And now over to you, Tim. Good morning. Firstly.

[C]

Good morning, Helen.

[A]

So, a lot of dollar strength this week after the Fed meeting on Wednesday. How much further do you think it can go?

[C]

I think it's worth starting with what Kevin Walsh, the new Fed chair, said, but also what he didn't say. The statement itself was famously short, which I love, by the way. And I had never realised quite how Wordy Powell was until I listened to Walsh on Wednesday. His responses to some of the questions from journalists were cut, to say the least. And I very much enjoyed actually being able to understand what he was on about. My view is that he is very realistic and he intends to also hand off some of the responsibility for decision making away from the opinions of the committee and into some hard analysis which suggests they're going to take inflation more seriously. We'll see if it works. But evidently the market was hoping for a dovish Fed. One should never trade on hope any more than one should trade on fear. And as soon as it became apparent the Fed will make the next decisions on what is really happening, the market took its medicine and bought some dollars. So we're now at the edge of some ranges, Eurodollar most notably as we have traded 114 to 118 for 12 months now, more or less, but cable as well, 131.50 to 136 and we are right at the bottom of that. I think we probably should break these supports, but I don't think that will necessarily indicate dramatic new dollar highs. So I would either stay away or maybe sell some dollars on some dramatic moves. But it is hard to make a case for a very negative dollar outlook in the current environment.

[A]

And metals have followed the same pattern. Are you seeing much activity there and do you think this is an opportunity?

[C]

The last week we had gold, almost 4,000, and we thought there was an opportunity to Take advantage. This week gold is about $100 higher, but somehow it feels a bit more vulnerable. I think it's because the move is clearly much more dollar driven this time around. Nonetheless, in gold I think longer term this remains an opportunity because the fundamentals are solid. As with last week, if you can pick up some yield with the reverse convertible or maybe set a put, then that might be more appealing than buying directly. The big support is 4,000 and below that it's hard to say, so I would be very careful not to overextend. The other metals are a different story. Silver feels really volatile, but actually the moves are far less dramatic in Dr. Z than what we saw earlier in the year. Big Support is at 60 and as we said earlier in the year, well if it felt like 30 was too cheap but 100 was too expensive, maybe we might be getting to levels where silver is a bit fairer, more fairly priced maybe, but I'm a bit wary and liquidity remains not that great. Nonetheless, volatility is high so you get well paid at least for taking risks in silver. But there is reason for that. So tread very carefully and be sure to have plenty of room to absorb some short term losses. Otherwise it's better to stay away.

[A]

And what about the low yielders, the Swiss franc and the yen? We're seeing particular weakness there. What are your thoughts on this?

[C]

Well, the weaker Swiss franc is a relief both for quite a few investors and of course for the Swiss National Bank. I think the clue isn't the question, it all comes down to yield. And as expectations for US yields move a bit higher, the cost of holding Swiss francs also increases as that is the one bank that will keep rates at zero almost regardless of what happens elsewhere. And this is driving Swiss crosses like Euro Swiss and Sterling Swiss a bit higher as well. And I would expect that broadly speaking to continue or at least for them to go sideways. So I would prefer to be a little bit short. Frank. The yen is a different story in the sense that dollar yen makes a new high every day and everyone keeps going on yapping as my kids would say about interventions. The bank of Japan may well intervene at some point, but it will only serve to provide a super entry point for new yen short positions. You intervention cannot change the direction of travel any more than sweeping up leaves can stop new leaves from falling. Also, while Lujpy is at new highs, Eurjpy isn't at all. The crosses are not in a particularly remarkable place. This is purely dollar strength, so intervening is really tough because they're not really intervening in yen weakness, they're really intervening in dollar strength, which is a much more expensive operation. Nonetheless, if you want to roll the dice on intervention, then a short dollar yen position over the weekend with today being a US holiday would be a bold bet. But if you do something like that, you need to take a fast profit if it appears and otherwise be ready to walk away. Because for now, there is just no reason to believe the yen will fundamentally strengthen. Finally, Helen, my friend Rob asked me, what's the difference between ignorance and indifference? I said, rob, I don't know and I don't care.

[A]

Very good. Thank you very much Tim. Great to speak to you as always. So that is all for today. Thank you again to my guest this morning and thank you all for tuning in. Please subscribe to our show if you enjoy it and you can of course also leave us a review on whichever platform you like to listen on. So we'll be back again on Monday morning. Do join us. Then Bernadette will be back in the hosting seat and she'll be joined, as always, by more of our colleagues to talk about what is moving markets. But until then, I wish you all a great day and then a great weekend. Bye bye for now. The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal podcasts for further other important legal information.