Middle East developments and SpaceX debut captivate markets

Summary

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Moving Markets: Middle East Developments and SpaceX Debut Captivate Markets

Podcast: Moving Markets (Julius Baer)
Date: June 12, 2026
Host: Lucia Ciachulovic with guests Bernadette Anderko and Tim Gagi

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Episode Overview

In this episode, the Moving Markets team unpacks a tumultuous period across global financial markets, largely influenced by dramatic geopolitical shifts in the Middle East—specifically, President Trump’s suspension of US military action against Iran and the subsequent progress toward a peace settlement. The episode also dives into the market enthusiasm surrounding SpaceX’s much-anticipated IPO, inflation and interest rate moves in the US and Europe, and the strange behavior of safe haven currencies and metals.

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Key Discussion Points & Insights

1. Middle East Developments and Market Reaction

[00:33 – 02:48]

• Major Headlines:
  • President Trump called off an impending round of US military strikes against Iran, stating a peace settlement was near:

    “Trump said that he'd canceled an upcoming round of US military strikes against Iran...later announced that a great settlement on the war was in the making.” – Bernadette Anderko [00:39]

  • Iranian state media spun the event as a US retreat, but both sides are taking credit for moving toward a deal.
  • Trump asserted, “Iran will never have a nuclear weapon,” and anticipated “the deal should be done pretty quickly.”
• Market Response:
  • US Equities: Sharp rally, led by chip stocks post-Trump announcement.

    “US equities rallied yesterday… A rebound in Micron Technology, Advanced Micro Devices and Intel provided a lot of momentum...” – Bernadette Anderko [01:34]

    • iShares Semiconductor ETF +8%
    • S&P 500 +1.75%, NASDAQ +2.5%, Dow +1.86%
  • SpaceX IPO:
    • $75 billion raised; shares priced at $135; investor enthusiasm high.
  • Oracle: Shares dropped 8% after announcing $20 billion fundraising for AI investments.
  • Oil: Prices fell sharply after the de-escalation.

    “West Texas Intermediate crude oil futures fell 2.58%...Brent crude tumbled 2.92%...” – Bernadette Anderko [02:17]

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2. US Inflation and ECB Moves

[02:48 – 04:26]

• US Producer Prices:
  • May PPI up 1.1% vs. 0% estimate; core PPI at 0.4% (below 0.5% expectations).
• Europe – ECB Meeting:
  • Raised key interest rate 25bps to 2.25%, citing ongoing Iran war and inflation pressure.
  • New forecasts: Eurozone inflation to average 3% this year (down to 2.3% next); growth revised lower.
  • ECB President Christine Lagarde:

    “The ECB is not pre-committing to a particular rate path...full implications of the war for medium-term inflation and growth will depend...” [03:59]

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3. Asian Markets and Investor Sentiment

[04:26 – 05:23]

• Asian Equity Surge:
  • MSCI Asia Pacific +3.5%; Korea’s KOSPI +8.4% at peak (noting involvement with AI investment sentiment).
  • Nikkei 225 +3.5%
• US Treasuries:
  • Yields steady; expectations for another Fed rate hike dropping (October odds drop from 51% to 36%).
• Preview of the Day:
  • University of Michigan Sentiment Index release and a key Swiss vote on population cap.
  • Muted US market open anticipated as investors await SpaceX’s debut.

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4. FX and Precious Metals Outlook (with Tim Gagi)

[06:07 – 10:33]

Dollar Trends

[06:11 – 07:18]

• Algo-driven FX trading:
  • “Any piece of news, positive or negative, has an immediate effect... Thinking before you act isn’t really in fashion these days.” – Tim Gagi [06:36]
• US Dollar:
  • Remains strong in a so-called “risk off” environment, but actual risk appetite remains high.
  • Tim doubts any Iran deal will spur lasting dollar weakness:

    “Even if Trump really does get a deal done, I don’t see how this translates into even a 5% weakening of the dollar.” – Tim Gagi [07:10]

Euro and ECB Policy

[07:18 – 08:12]

• Euro steady:
  • “The ECB’s moderate hiking path was already expected...100% in the price of the Euro.” – Tim Gagi [07:27]
  • Broader focus now on upcoming Fed decisions.
  • Euro-Dollar remains in the long-standing 1.14–1.18 range.

Swiss Franc Behavior

[08:12 – 09:09]

• Franc weakening surprising:
  • Despite market volatility, Swiss franc weakens (usually a safe haven).
  • Main driver: Swiss National Bank’s zero rates make the franc attractive for carry trades.
  • Tim highlights it could remain weak as investors “sell a few francs.”
  • Suggests using franc as a funding currency for investing in higher-yielding currencies.

Gold Under Pressure

[09:09 – 10:33]

• Gold’s drop:
  • Down almost 27% from this year’s high; broke key moving average levels.
  • Tim remains fundamentally positive on gold and sees this as a possible opportunity:

    “We have been fundamentally still positive... At the lowest point, we were down almost $1,500 per ounce..." – Tim Gagi [09:20]

  • Suggests indirect gold exposure (via reverse convertibles) for better entry/yield.
  • Ends segment with a light parrot joke.

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Notable Quotes & Memorable Moments

• On Market’s Whiplash Reaction:

  “Thinking before you act isn’t really in fashion these days.” – Tim Gagi [06:36]

• On Geopolitics Driving Markets:

  “Both sides are taking credit for moving closer to a solution, but equity markets have reacted quite positively, haven’t they?” – Lucia Ciachulovic [01:26]

• On SpaceX IPO Hype:

  “Enthusiasm is building ahead of today’s SpaceX debut, which could highlight the expected. Of course, in the AI buildout.” – Bernadette Anderko [01:59]

• On Gold’s Opportunity:

  “For investors who might like to add to gold exposure, this might be a good level...I still think an indirect exposure reverse convertible perhaps makes a bit more sense.” – Tim Gagi [09:36]

• Light Moment:

  “…A lady buys a parrot from a pet store, but it is constantly swearing and cursing…What did the chicken do?” – Tim Gagi [10:24]

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Segment Timestamps

• Middle East & Market Wrap with Bernadette Anderko: 00:33 – 06:03
• Currencies & Metals with Tim Gagi: 06:07 – 10:33

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Summary Takeaways

• Major geopolitical moves prompt sharp, rapid reactions in equities, oil, and FX—though longer-term trends hold steady.
• SpaceX’s IPO is drawing extraordinary market interest, especially among tech and AI-linked stocks.
• Central banks remain cautious; ECB hikes as expected but signals uncertainty ahead. US inflation data came in mixed.
• The Swiss franc’s recent weakness highlights the shifting nature of safe haven dynamics amid global rate divergence.
• Gold’s recent fall is seen by Julius Baer strategists as a potential buying opportunity via structured products.
• Overall, markets remain “headline-driven,” and the mood is a mix of cautious optimism and algorithm-fueled volatility.

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For more expert takes and daily updates, tune in to Moving Markets.

Transcript

[A]

Good morning, everyone, and welcome to Julius Baer's Moving Markets podcast. It is Friday 12th June and my name is Lucia Ciachulovic. There's been plenty happening in markets, so we've got a lot to get through today. I'll start by catching up with my colleague Bernadette Anderko for a look at the latest market moves. And then I'll speak with Tim Gagi about the latest moves in currencies and metals. But first, Bernadette, good morning. It's great to have you with us.

[B]

Good morning, Lucia. Nice to be here.

[A]

So we might as well start with what's really been setting the tone for markets since we left the office yesterday.

[B]

Cool. So that is the Middle East. So, during the course of the day yesterday, President Trump said that he'd canceled an upcoming round of US military strikes against Iran, claiming that talks with the Islamic Republic had been approved. He later announced that a great settlement on the war was in the making, subject to the finalisation of documents. And he also said that the Strait of Hormuz will be reopened as soon as that deal is signed. Iranian state media outlet Files, however, characterized Trump's move as a tactical retreat from his military threats and reported that it was the US that had accepted Iran's proposed text. Trump later told reporters in the Oval Office that we've got a deal. Iran will never have a nuclear weapon. The deal should be done and it should be done pretty quickly.

[A]

Okay. And it looks like both sides are taking credit for moving closer to a solution. But equity markets have reacted quite positively, haven't they?

[B]

Indeed, yes. US equities rallied yesterday very much, boosted by a rebound in chip stocks after Trump called off these strikes. A rebound in Micron Technology, Advanced Micro Devices and Intel provided a lot of momentum to the market. The iShares Semiconductor ETF gained more than 8%. And of course, enthusiasm is building ahead of today's SpaceX debut, which could highlight the expected. Of course, in the AI buildout. The company raised US$75 billion in the world's largest initial public offering, which priced at US$135 per share. We saw the S&P 500 gaining one and three quarter percent. The NASDAQ Composite was up more than two and a half percent. The Dow Jones Industrial Average rose 1.86%. It wasn't all good news. Shares of Oracle dropped 8% as the software giant announced plans to raise an additional US$20 billion in equity and debt to pay for its artificial Intellig. And you might ask what happened to oil Yesterday. Well, West Texas Intermediate crude oil futures fell 2.58% to settle at $87.71 a barrel. After Trump's announcement, Brent crude tumbled 2.92% to end at $90.38 a barrel. I see Brent at $88 this morning.

[A]

And Bernadette, we also had fresh inflation data out of the US. What stood out there?

[B]

The producer price index increased 1.1% in May according to the Bureau of Labour Statistics. And that's more than the zero economists had expected. Core inflation, however, which excludes volatile food and energy prices, stood at 0.4% and that's below an expectation of 0.5%.

[A]

Okay. And in Europe, the European Central bank wrapped up its two day meeting with what was a widely expected rate hike.

[B]

Indeed. Yes. The European Central bank announced a quarter point rate hike yesterday, bringing its key interest rate now to 2.25%. And this is, you know, because the Iran war is continuing to blow inflation off. Target markets had been pricing in a near 100% chance of this 25 basis point hike. So it was no shock. The European Central Bank's Governing Council said that the decision had been made in a bid to ward off inflationary pressures generated by the war. And the central bank also raised its inflation forecast. So it now expects headline inflation in the eurozone to average 3% this year before dropping to 2.3% next year. They also revised economic growth forecasts downwards for this year and next year. So the ECB now expects growth in the eurozone to average 0.8% this year, 1.2% next year. And finally, Christine Lagarde commented after the hike that the ECB is not pre committing to a particular rate path, that the full implications of the war for medium term inflation and growth will depend on the intensity and duration of the energy price shock, as well as the scale of its indirect and second round effects.

[A]

Okay, and now moving on to Asia. We've seen quite some euphoria in Asian markets this morning, haven't we?

[B]

Yes, we did. So MSCI's Asia Pacific equity gauge jumped 3.5%. That was led by an 8.4% surge for South Korea's Kospi. Of course, we know that's a barometer for AI investments. The euphoria's waned somewhat in the session. The Cosby is lower now, but still over 5%. The last time I looked, Nikkei 225 was also up more than 3.5%. Also this morning, US Treasuries have held onto gains as hopes of this peak, steel have led the markets to trim their bets on a rate hike from the Federal Reserve this year. So pricing for a hike in October has now come down to 36% from 51%. Just an update on where U.S. treasury yields are. Two year treasury yields steady at 407%. The benchmark 10 year treasury yields holding up 4.47%. When it comes to the reaction from precious metals, I think I'll leave that one with Tim.

[A]

Yeah, definitely. And finally, Bernadette, what should we be looking out for in the day ahead?

[B]

Yes, well, today investors will be watching for June's preliminary reading of the Michigan Sentiment Index. One thing coming up this weekend, of course, Switzerland is voting on whether or not to cap the population at 10 million. And those results could ultimately impact Switzerland's relationship with the European and Swiss companies exports to the region. So that's going to be very closely watched. And looking at the markets today, futures in the US pointing to a muted open. Perhaps investors holding their breath ahead of this SpaceX debut. We'll see how it launches.

[A]

Great. Very interesting. Thank you very much, Bernadette for this nice overview.

[B]

Thanks for having me.

[A]

And now let's turn to the world of currencies and metals. Good morning, Tim.

[C]

Good morning, Lucia.

[A]

So we've just heard the latest on the Middle east from Bernadette, but we had a week of escalation which has led to some dollar buying and higher yields. What do you think comes next for the dollar?

[C]

Well, we're certainly very headline driven as we heard. I think what's happening is also in FX anyway, exaggerated hugely by algorithmic trading scans news articles at a million miles an hour. This means that any piece of news, positive or negative, has an immediate effect where perhaps a human or a clever AI rather than a scalping algorithm might think twice. Thinking before you act isn't really in fashion these days. But the reversal yesterday because Trump says it's all done, we have a deal was, in my opinion, a bit much. The stronger dollar was in what might very loosely be termed a risk off environment. Although it doesn't look like any risk off environment I've ever seen. With equity still not really very far from all time highs and investors about to bet a squillion dollars on going to Mars, I still think rather boringly that the rangers are here to stay. And even if Trump really does get a deal done, I don't see how this translates into even a 5% weakening of the dollar. So I stick to ranges and I'm still cautious of selling dollars against lower yielding currencies.

[A]

Okay. And turning to Europe, we heard the ECB hiked rates yesterday, but the Euro barely reacted. Is that what you expected?

[C]

Yeah, absolutely. The ECB's moderate hiking path was already expected before the war even began and it was 100% in the price of the Euro. I think there's a lot more interest in next week's Fed. Presumably the inline CPI print from the US has taken a little bit of pressure off Kevin Walsh, but they still cannot possibly cut rates anytime soon and they may well still need to hike them. And even if this peace deal, which anyway looks a bit more like a ceasefire extension to me, is somehow confirmed, unlike all the previous ones, we will still have to wait a while to see what the inflationary effects of the war really are. Euro dollar is in a range of 114 to 118 for 12 months now and this is unlikely to change right now. Despite everything, we are more or less in the middle and I just don't see the Euro going anywhere against dollar or indeed against anything really for quite some time to come.

[A]

Okay. And meanwhile the Swiss franc has weakened steadily this week, which is a bit curious in a risk off environment. What is happening here?

[C]

It is curious, although maybe with gold falling it did make sense to see the Swiss under some pressure. But I think the main story is rates. The Swiss national bank are the only central bank that I can think of with a very strong currency and rates at zero. With output pressure on rates more widely due to the obvious inflationary risks, the differential appears to be both wider and more durable with other currencies. And I think maybe therefore investors are inclined to sell a few francs and I would still rather be gently short Swiss francs. I think it's interesting to look at the franc as well as a funding currency for leverage. The cost savings are immense and as long as this is long term play and leverage is not so large as to risk being forced out for short term shocks, borrowing Swiss francs to invest in other high yielding currency could be an interesting alternative to paying what will remain very high funding rates in the major currencies.

[A]

All right. And finally, Tim, gold has come under some heavy pressure this week. Do you think this is an opportunity?

[C]

Actually I do. Gold has been very tricky of late. We have been fundamentally still positive, but also very conscious that breaking the 200 day moving average against dollars, Swiss francs, pounds and Euros is no small thing. We are still headline and flow driven in gold, like in everything. But yesterday at the lowest point we were down almost $1,500 per ounce, or about 27% from the high, which was only this year. We can always fall further, but for investors who might like to add to gold exposure, this might be a good level. I am quite conscious this is not the first or even the second time I've said that on this podcast. But we are where we are and I still think an indirect exposure reverse convertible perhaps makes a bit more sense. You get a better entry point. An enhanced yield with rates as they are probably 10 or 12% annualized might make sense as long as you can get a strike below 4,000. It's an alternative, but I do think that it's probably fallen to a point where we ought to see some biasing and finally, a lady buys a parrot from a pet store, but it is constantly swearing and cursing. After a few days and getting desperate, she puts it in the freezer just for a few seconds, just to try to teach it a lesson. When she takes the parrot back out, the parrot bows its head and says, madam, I'm terribly sorry. I'll be good from now on. Out of interest, what did the chicken do?

[A]

All right, great. Thanks a lot for being with us this morning, Tim. Very interesting to hear your take on what's happening. So that is all for us for today then. Thanks again to my guests and thank you all for tuning in. And please join us again on Monday when we will be back with more news moving the markets. Have a great day everyone and bye for now.

[B]

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

[C]

further other important legal.