Story of 6 key macro signals for the week to June 16, 2025

16 Jun 2025 , 01:56 PM

GEOPOLITICAL RISK DOMINATED THE WEEK

The week was dominated by geopolitical risk with Israel launching an all-out attack on nuclear installations in Iran. These are two powerful nations that straddle the Middle East and West Asia. Iran is not just a major producer and exporter of crude oil, but also exercises substantial control over the Straits of Hormuz. This is a key pathway for trade in Asia and any blockade of the Strait of Hormuz has larger implications for oil prices.

In response, oil prices rallied over 8% on Friday, and crude is now a full 31% up from the lows of early May 2025. With geopolitical risk comes the concerns that global portfolio investors could turn risk-off and flows could shift out of emerging markets into developed market assets. Let us look at how the 6 key macros explained the global and Indian macro story in the last one week.

• US BOND YIELDS REMAIN IN A TIGHT RANGE

The table below captures the US 10-year benchmark bond yields over the last 7 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 16, 2025	4.431	4.428	4.435	4.402
Jun 15, 2025	4.420	4.398	4.428	4.396
Jun 13, 2025	4.406	4.320	4.448	4.310
Jun 12, 2025	4.364	4.414	4.420	4.344
Jun 11, 2025	4.419	4.472	4.506	4.406
Jun 10, 2025	4.473	4.480	4.490	4.438
Jun 09, 2025	4.475	4.510	4.518	4.470

Data Source: Bloomberg (Latest price is at 12.30 IST)

At a secular level, the US bond yields have spiked from 3.75% in October 2024 to 4.43% in June 2025. This is largely due to the fact that after cutting benchmark rates by 100 bps in 2024, the Fed is on hold. Despite pressure from the US president to cut rates, Jerome Powell, has stood firm. While the CME Fedwatch is pencilling in 2 rate cuts of 25 bps each in 2025, the FOMC is firm that they will not cut rates without understanding the full impact of reciprocal tariffs on GDP growth, unemployment, and consumer inflation. In the last one week, the US 10-year bond yields touched a high of 4.518% and a low of 4.310%.

• US DOLLAR INDEX (DXY) WELL UNDER 100 MARK

The table below captures the US dollar index (DXY) over the last 7 trading sessions. The DXY is an index of dollar strength.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 16, 2025	98.01	98.29	98.37	98.00
Jun 15, 2025	98.28	98.32	98.35	98.20
Jun 13, 2025	98.18	97.81	98.59	97.62
Jun 12, 2025	97.92	98.46	98.52	97.60
Jun 11, 2025	98.63	98.96	99.22	98.53
Jun 10, 2025	99.10	98.98	99.39	98.86
Jun 09, 2025	98.94	99.20	99.23	98.82

Data Source: Bloomberg (Latest price is at 12.30 IST)

The US dollar index (DXY) has fallen from a peak of 110 in the last one year to around 98 levels, hinting at substantial weakness built into the US dollar. The concerns have increased on fears that the reciprocal tariffs could seriously impact the strength of the dollar. Interestingly, rate cuts are negative for the dollar index, but most of the recent fall in the dollar index happened after the Fed opted not to cut rates. In the last one week, the US dollar index (DXY) touched a high of 99.39 and a low of 97.60.

• INDIA BENCHMARK BOND YIELDS SUBDUED AT 6.28%

With the RBI maintaining its dovish stance and cutting repo rates by 100 bps since February 2025, the bond yields have also reacted accordingly.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 16, 2025	6.288	6.307	6.307	6.287
Jun 13, 2025	6.290	6.327	6.327	6.289
Jun 12, 2025	6.280	6.304	6.304	6.277
Jun 11, 2025	6.290	6.287	6.303	6.273
Jun 10, 2025	6.280	6.280	6.302	6.265
Jun 09, 2025	6.270	6.241	6.286	6.241

Data Source: RBI (Latest price is at 12.30 IST)

From 7.05% in early 2025, the benchmark 10-year India bond yields have dipped to 6.28%, in tandem with the flurry of rate cuts by the RBI. In the June monetary policy, the RBI not only cut rates by 50 bps, but also cut the CRR by 100 bps. However, the RBI also changed its stance from accommodative to neutral in June, indicating that further rate cuts may be really tough, and there may not be much room for the RBI. That squeezed the 10-year yields into a range in the last 2 weeks. In the last one week, the India 10-year bond yields touched a high of 6.327% and a low of 6.241%.

• RUPEE WEAKENS DESPITE FALL IN DOLLAR INDEX

The table below captures the RBI announced USDINR currency exchange rate for last 6 trading sessions.

Date	Price (₹/$)	Open (₹/$)	High (₹/$)	Low (₹/$)
Jun 16, 2025	86.050	86.144	86.235	85.997
Jun 13, 2025	86.108	86.164	86.217	85.924
Jun 12, 2025	85.581	85.470	85.665	85.401
Jun 11, 2025	85.468	85.560	85.631	85.412
Jun 10, 2025	85.596	85.666	85.695	85.505
Jun 09, 2025	85.670	85.803	85.813	85.466

Data Source: RBI (Latest price is at 12.30 IST)

While the USDINR has bounced back sharply from the lows of ₹87.50/$, recent weeks have seen the rupee again under pressure. This week has also seen the Indian rupee weakening from ₹85.67/$ to ₹86.05/$, and is a far cry from the recent highs of ₹84.50/$. Ironically, the rupee weakness is despite the dollar index trending lower. The rupee weakness can be attributed to geopolitical risk, risk-off concerns, and a spike in crude oil prices. In the last one week, the USDINR touched a high of ₹85.401/$ and a low of ͅ₹86.217/$.

• BRENT CRUDE SPIKES ON GEOPOLITICAL RISK

The table captures the prices of Brent Crude on a per British Barrell basis. The WTI crude price is generally linked to the Brent Crude price.

Date	Price ($/bbl)	Open ($/bbl)	High ($/bbl)	Low ($/bbl)
Jun 16, 2025	74.58	75.65	75.65	74.22
Jun 15, 2025	75.61	77.88	77.99	75.52
Jun 13, 2025	74.23	70.50	78.50	70.41
Jun 12, 2025	69.36	70.23	70.40	68.36
Jun 11, 2025	69.77	66.60	70.83	66.47
Jun 10, 2025	66.87	67.12	68.00	66.48
Jun 09, 2025	67.04	66.59	67.19	66.07

Data Source: Bloomberg (Latest price is at 12.30 IST)

With Israel attacking nuclear installations in Iran, it is an all-out war impacting the Middle East and West Asia. Oil has spiked sharply in the last 2 days on concerns that Iran could slow traffic through the Straits of Hormuz, a key pathway for Asian oil and gas movement. In the last 40 days, Brent crude has rallied from a low of $57/bbl to $75/bbl, a spike of nearly 31%. That was one of the factors weakening the Indian rupee. In the last one week, Brent Crude prices touched a high of $78.50/bbl and a low of $66.07/bbl.

• SPOT GOLD RALLIES WITH ENHANCED GEOPOLITICAL RISK

The table below captures the international spot prices of gold in dollars per troy ounce (oz). A troy ounce is approximately 31.1035 grams.

Date	Price ($/oz)	Open ($/oz)	High ($/oz)	Low ($/oz)
Jun 16, 2025	3,419.30	3,444.83	3,451.23	3,415.92
Jun 15, 2025	3,444.26	3,440.98	3,451.27	3,438.79
Jun 13, 2025	3,432.64	3,385.30	3,447.02	3,379.79
Jun 12, 2025	3,385.29	3,357.24	3,399.16	3,338.64
Jun 11, 2025	3,353.84	3,322.52	3,360.82	3,315.23
Jun 10, 2025	3,323.02	3,328.58	3,349.28	3,301.92
Jun 09, 2025	3,328.33	3,311.51	3,338.43	3,293.70

Data Source: Bloomberg (Latest price is at 12.30 IST)

After touching a high of $3,500/oz, gold had retreated nearly 10%. However, the recent spike in geopolitical risk has again brought back the focus on gold as a safe haven asset. In December 2024, gold emerged as the second most held currency by central banks after the dollar. During the week, gold touched a high of $3,451.27/oz and a low of $3,293.70/oz.