19 Jun 2025, 08:30 GMT+2 A look at the day for European and global markets by Johann M Cherian Speculation about a potential US intervention in the Middle East has captured the markets' attention this week, making investors nervous who would otherwise be focused on a series of central bank meetings expected to provide forecasts on growth and inflation. Donald Trump is keeping the world on edge about whether the United States will join the Israeli air campaign against Iran, telling reporters outside the White House: "I might do it. I might not do it. I mean, nobody knows what I'll do." Bloomberg News wrote that senior US officials are preparing for a possible attack on Iran in the coming days. This ambiguity has kept markets anxious for almost a week, as cracks emerge among Trump's base of supporters, some of whom fear the president may move away from his isolationist stance in foreign policy. Investors have learned to be patient in their response to Trump's often unpredictable economic policy style, although analysts warn that any sign of escalation in the Middle East could trigger a knee-jerk reaction in financial markets. Global stock markets have steadily cooled after the recent rally and analysts say the main concern for markets remains the lack of progress toward the expected trade deals, with Trump's tariff deadline less than a month away. Bond investors in developed markets have approached traditionally safe-haven assets with some caution. Ten-year bonds from Germany (DE10YT=RR), Great Britain (GB10YT=RR), and the United States US10Y have traded in a narrow range in recent sessions.
Bond investors in developed markets have approached traditionally safe-haven assets with some caution. Ten-year bonds from Germany (DE10YT=RR), Great Britain (GB10YT=RR), and the United States US10Y have traded in a narrow range in recent sessions. Amid all these uncertainties, traders are weighing potential inflationary pressures that could keep central banks in a hawkish stance. The increase in military spending in the US and European economies could push up public debt levels and weaken the already feeble appetite for bonds.
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The Bank of England will most likely highlight the possible repercussions of the recent spike in oil prices when it announces its monetary policy verdict later today. Today's decisions by the central banks of Switzerland and Norway will also be in the spotlight, after the European Central Bank earlier this month chose to err on the side of caution by hinting at a pause in its easing cycle. Possible drivers: - Decisions by the central banks of Great Britain, Switzerland, Norway, and Taiwan - Speeches by Luis de Guindos and François Villeroy de Galhau of the ECB - Eurogroup meeting in Luxembourg - Eurozone finance ministers will discuss Bulgaria's adoption of the euro and fiscal recommendations - US markets closed for Juneteenth holiday
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