Markets ended June on a firmer footing after a ceasefire between Israel and Iran eased geopolitical tensions. Brent crude oil fell back below $70, helping cool inflation concerns, while global stocks rallied, with the S&P 500 reaching new highs, and the FTSE 100 rebounded after a mid-month dip, supported by softer UK inflation and falling bond yields.

The Bank of England held interest rates at 4.25%, with a 6–3 split vote. May’s CPI remained steady at 3.4%, and core inflation eased below 4%, reinforcing expectations for a rate cut by August. The Fed also held rates in June, signalling caution amid lingering inflation risks.

The dollar continued its decline in value last week, boosting sterling and supporting UK import prices. Gold and other safe-haven assets also gave back recent gains.

 

Coming up this week

Each of these events has been selected for its relevance to central bank decisions or its impact on market sentiment.

Monday 30 June

  • UK final Q1 GDP (QoQ) – confirms the 0.7% growth estimate; markets will look for any revisions to early-year momentum.
  • UK mortgage approvals (May) – gauges housing market health amid high interest rates.
  • China NBS PMIs (June) – key read on manufacturing and services in the world’s second-largest economy.

Tuesday 1 July

  • UK manufacturing PMI (June) – a first look at factory activity in June; signs of contraction would raise growth concerns.
  • Eurozone flash CPI (June) – crucial for ECB policy; inflation near 2% may support further easing.
  • US JOLTS job openings (May) – monitors labour market tightness ahead of Thursday’s payrolls report.

Wednesday 2 July

  • UK Nationwide house price index (June) – tracks sentiment and affordability in the housing market.
  • US ADP employment change (June) – private-sector jobs report; often seen as a preview to non-farm payrolls.

Thursday 3 July

  • US non-farm payrolls (June) – major market mover; a strong print may delay Fed cuts.
  • US unemployment rate and wages (June) – indicates labour-market slack and inflation pressure.
  • Eurozone unemployment rate (May) – measures job market resilience in the Eurozone.

Friday 4 July

  • Eurozone retail sales (May) – offers insight into consumer demand across the bloc.
  • BoE MPC member Taylor speech – may provide clues on rate path ahead of the August decision.
  • US markets closed (Independence Day)

 

What you might’ve missed last week

Bank of England on hold: The BoE kept the Bank Rate at 4.25% in June, as widely expected. The vote was 6–3, with a minority preferring an immediate cut.

U.S. Fed paused as well: The Federal Reserve left its benchmark rate unchanged at a 4.25-4.50% range, after several cuts earlier in the year, Fed officials indicated they’re in wait-and-see mode

Geopolitical oil shock and relief: The sudden conflict that erupted between Israel and Iran last week was Brent crude oil surge to five-month highs of almost $80 on fears of supply disruptions. After 12 days of hostilities, a ceasefire was announced by President Trump, which sent oil prices plunging back down by roughly 15% to the mid-$60s.

Market reaction – risk on: Global equities staged a broad rally once the Middle East truce took hold. The MSCI All-Country stock index hit a record high, with Wall Street’s S&P 500 and Nasdaq indexes climbing to peaks not seen since early 2025.

UK consumer and retail updates: Retail sales volumes in May recorded their sharpest drop since late 2023, reflecting cost-of-living pressures, even as consumer confidence improved to its highest level this year. This divergence suggests households remain cautious spenders despite slightly better sentiment, a trend to watch in coming months.

 

Why it matters

Cooling UK inflation and lower oil prices support the case for summer rate cuts, but central banks remain cautious. This week’s data – especially US payrolls and Eurozone CPI – could shift expectations quickly. Market sentiment has improved, but remains sensitive to inflation surprises or renewed geopolitical tension.

 

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