Story of 6 key macro signals for the week to June 22, 2025

23 Jun 2025 , 11:05 AM

US INTERVENTION COULD WORSEN MIDDLE EAST MEDLEY

Towards the end of the week, US stealth bombers directed their fire power at key nuclear enrichment facilities in Iran. The markets are not going to be happy with this development as it could worsen the situation in the region. Middle East and West Asia have been a ticking bomb and the US intervention will add fuel to the fire. Full repercussions next week!

Brent Crude was under pressure due to the war-like situation between Iran and Israel. The bigger risk with the US attacking Iran, is a globalization of the war. Will Saudi Arabia and UAE continue to back the US? How will China and Russia react; since both the countries had explicitly warned the US to stay out of the war. It will surely be a tumultuous week.

• US BOND YIELDS SHOW DOWNWARD BIAS

The table captures US 10-year benchmark bond yields over the last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 20, 2025	4.376	4.381	4.443	4.361
Jun 19, 2025	4.385	4.375	4.400	4.374
Jun 18, 2025	4.390	4.397	4.413	4.344
Jun 17, 2025	4.386	4.438	4.446	4.381
Jun 16, 2025	4.448	4.418	4.462	4.403

Data Source: Bloomberg

Since October 2024, US bond yields had spiked from 3.75% to 4.43%. After cutting rates by 100 bps, the Fed has held status quo in 2025, despite pressure from the political powers. During the week, the bond yields fell from 4.45% to 4.38%, but that was more due to an increase in bond prices amidst demand for safe-haven assets. The CME Fedwatch is still pencilling 2 rate cuts in 2025, but that can change at short notice. In the last one week, the US 10-year bond yields touched a high of 4.562% and a low of 4.361%.

• US DOLLAR INDEX (DXY) FAILS TO SUSTAIN THE RECOVERY

Here is the US dollar index (DXY), an index of dollar strength, over last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 20, 2025	98.282	98.280	98.490	98.125
Jun 19, 2025	98.468	98.500	98.755	98.325
Jun 18, 2025	98.468	98.405	98.590	98.035
Jun 17, 2025	98.394	97.760	98.440	97.570
Jun 16, 2025	97.702	98.305	98.305	97.780

Data Source: Bloomberg

The US dollar index (DXY) fell from a peak of 110 to 97 levels this week, before showing a small recovery. However, the dollar pressure remains high, especially with the US intervening in Iran. Dollar concerns increased on fears that reciprocal tariffs could seriously impact dollar strength. Rate cuts are negative for the dollar index, but ironically the dollar started falling after the Fed paused  rate cuts. Last week, the US dollar index (DXY) touched a high of 98.76 and a low of 97.57.

• INDIA BENCHMARK BOND YIELDS EDGE UP MARGINALLY

The table below captures 10-year India bond yields for the last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jun 20, 2025	6.310	6.310	6.319	6.296
Jun 19, 2025	6.300	6.259	6.317	6.259
Jun 18, 2025	6.250	6.273	6.273	6.256
Jun 17, 2025	6.250	6.270	6.273	6.253
Jun 16, 2025	6.260	6.299	6.307	6.270

Data Source: RBI

India bond yields are sharply down from 7.05% in early 2025 to the current level of 6.31%; amidst a 100 bps cut in repo rates. This week, bond yields edged up after the RBI MPC minutes hinted that rate cuts were done and dusted. With the RBI shifting its stance from accommodative to neutral; there is not much room left for the RBI. The India-US bond yield spread is now back at around 200 basis points. In the last one week, the India 10-year bond yields touched a high of 6.307% and a low of 6.253%.

• RUPEE TOUCHES 3-MONTH LOW THIS WEEK

The table captures the official USDINR exchange rate for last 5 trading sessions.

Date	Price (₹/$)	Open (₹/$)	High (₹/$)	Low (₹/$)
Jun 20, 2025	86.580	86.684	86.698	86.530
Jun 19, 2025	86.840	86.416	86.916	86.416
Jun 18, 2025	86.430	86.315	86.573	86.263
Jun 17, 2025	86.318	86.030	86.404	85.890
Jun 16, 2025	85.846	86.149	86.260	85.782

Data Source: RBI

Despite a tepid dollar index, the USDINR weakened during the week, and even touched a 3-month low of ₹86.92/$. It is now a far cry from the recent highs of ₹84.50/$. The rupee weakness can be attributed to geopolitical risk, risk-off flows, and a spike in crude oil prices. Above all, oil companies rushing to hedge exposures also added to rupee weakness. In the last one week, the USDINR touched a high of ₹85.782/$ and a low of ͅ₹86.916/$.

• BRENT CRUDE SPIKES AND COULD CROSS $80/BBL

The table captures the Brent Crude prices over last 5 trading sessions.

Date	Price ($/bbl)	Open ($/bbl)	High ($/bbl)	Low ($/bbl)
Jun 20, 2025	77.01	77.50	77.67	75.51
Jun 19, 2025	78.85	76.50	79.04	75.67
Jun 18, 2025	76.70	76.88	77.44	74.41
Jun 17, 2025	76.45	74.16	77.33	72.66
Jun 16, 2025	73.23	78.31	78.32	70.56

Data Source: Bloomberg

While the Israel-Iran war has already spiked oil prices, things could get worse with the US also actively involved in the war. Oil already spiked from a low of $57/bbl in early May 2025 to the current level of $77/bbl. With the US bombing Iranian enrichment facilities, it has increased the likelihood of Iran targeting the Straits of Hormuz and the Houthi Rebels in Yemen targeting the Red Sea route. In the last week, Brent Crude prices touched a high of $79.04/bbl and a low of $70.56/bbl.

• SPOT GOLD FLAT FOR THE WEEK IN A VOLATILE SCENARIO

The table captures the international spot prices of gold in dollars per troy ounce (oz).

Date	Price ($/oz)	Open ($/oz)	High ($/oz)	Low ($/oz)
Jun 20, 2025	3,368.23	3,370.82	3,374.63	3,340.38
Jun 19, 2025	3,370.75	3,369.08	3,388.07	3,347.59
Jun 18, 2025	3,369.09	3,390.40	3,400.05	3,362.54
Jun 17, 2025	3,388.74	3,383.20	3,403.39	3,366.25
Jun 16, 2025	3,383.20	3,431.54	3,451.62	3,382.40

Data Source: Bloomberg

After touching a high of $3,500/oz, gold had retreated nearly 10%. However, the recent spike in geopolitical risk has brought back gold as a safe haven asset. However, gold demand has slowed with most consumers now heavily long on gold. During the week, gold touched a high of $3,451.62/oz and a low of $3,370.82/oz.