Daily Brief | June 20 2025

Top News

·     China’s central bank kept its benchmark lending rates unchanged.

·     Iran said on Friday it would not discuss the future of its nuclear programme while under attack by Israel, as Europe tried to coax Tehran back into negotiations and the United States considers whether to get involved in the conflict.

·     Japan’s core inflation hit a more than two-year high in May, exceeding the central bank’s 2% target for well over three years, keeping it under pressure to resume interest rate hikes despite economic pressure from U.S. tariffs.

·     Taiwan’s export orders rose in May as demand for the island’s technology products – artificial intelligence in particular – surged, and companies frontloaded business to escape looming U.S. tariffs. 

Economic Outlook

China’s central bank kept its benchmark lending rates unchanged. In its latest monetary policy decision, the central bank of the world’s second-largest economy left the one-year and five-year loan prime rates (LPR) steady at 3.0% and 3.5%, respectively, in line with market expectations. Just a month ago, the People’s Bank of China (PBoC) cut both rates by 10 basis points—the first reduction since October of last year—amid trade-related uncertainty, concerns over meeting growth targets, and persistent deflation. The one-year LPR serves as a reference for most lending rates in the country, while the five-year LPR is the benchmark for mortgages; both remain at their lowest levels since 2019, when they were adopted as key policy tools. Although trade tensions have eased and recent data show resilience in certain sectors, further rate cuts cannot be ruled out in the second half of the year.

Markets and Stocks

U.S. equity futures opened higher on Friday following Thursday’s Juneteenth holiday, although caution remains amid ongoing geopolitical tensions between Israel and Iran. However, signs of potential diplomatic space before any direct U.S. intervention have helped ease market jitters. For the week, performance has been mixed: the S&P 500 is up slightly, the Nasdaq has gained nearly 1%, while the Dow Jones is posting a modest decline.

In the U.S. Treasury market, yields edged higher. The 10-year note rose to 4.42%, the 2-year remained stable at 3.94%, and the 30-year bond advanced to 4.92%. The curve reflects sustained focus on geopolitical developments and expectations that the Federal Reserve will maintain a restrictive stance for an extended period.

In commodities, Brent crude fell to $76.07 per barrel, pressured by the U.S. decision not to intervene immediately in Iran and by Iran’s acceleration of oil exports. In contrast, WTI gained nearly 1.0%. Gold prices slipped 0.4% in spot markets to $3,355.97 per ounce, marking a weekly loss of 2.2%. The pullback appears driven by profit-taking, expectations of elevated interest rates, and reduced urgency around a broader military conflict.

Corporate News

– Circle shares extended gains after the Senate passed its proposed stablecoin legislation, known as the GENIUS Act. The stock rose in premarket trading following a strong rally on Wednesday, as investors reacted positively to the regulatory milestone.

– GMS shares surged after reports that QXO and Home Depot are engaged in a bidding war to acquire the company. QXO shares were up in premarket trading, while Home Depot dipped slightly.

– Darden Restaurants shares rose after the company beat expectations for its fiscal fourth-quarter results. The parent company of Olive Garden reported adjusted earnings of $2.98 per share and revenue of $3.27 billion, exceeding analyst forecasts. Additionally, Darden announced a new $1 billion share repurchase program.