Markets remain cautious amid interest rates, oil, and European macro signals.

A start to the week still dominated by the Gulf

Financial markets began the week with a fragile balance: on the one hand, the possibility of a truce in the Strait of Hormuz supported the recovery of risky assets, while on the other, the clashes between the United States and Iran continued to keep tensions high on oil prices and inflation expectations. Following the mutual attacks of recent days, Washington and Tehran are moving toward new indirect talks in Doha, with Qatar once again at the center of regional mediation. According to the latest reports, the issue concerns not only maritime security in the Strait, but also the freezing of approximately $6 billion in Iranian assets and the possibility of transforming the current interim truce into a more permanent agreement.

The focal point remains Hormuz. A strategic portion of global energy trade passes through it, and any blockage, even partial, tends to immediately impact crude oil prices, transportation costs, and the perception of global risk. In recent trading sessions, the market has seen two opposing signals: on the one hand, the resumption of oil tanker traffic and the possibility of a more credible truce; on the other, Iran's desire to maintain political and operational control over the Strait, with the risk that normalization remains incomplete.

US stocks recover, Europe more cautious

The first effects of the potential easing were visible in US stocks. At mid-session on Tuesday, June 30, the S&P 500 was up about 0.77%, the Nasdaq 100 was up about 1.67%, and the Dow Jones was up about 0.23%. It's an orderly rebound, rather than a burst of euphoria: the market is buying the possibility that the energy crisis won't escalate, but it hasn't yet eliminated the geopolitical risk premium.

In Europe, the movement was more cautious in the first part of the week, although some indices remain near their highs. The Euro Stoxx 50 is hovering near record highs, with an annual gain of nearly 8.5%, but the European reaction remains less linear than on Wall Street. The reason is simple: for Europe, oil is not just a financial variable, but a real cost on industry, consumption, and trade balances. This is why the Old Continent tends to benefit from the truce, but suffer more quickly when energy prices rise again or when tensions in the Middle East threaten trade routes.

Oil, gold and copper: divided commodities

Oil remains the most important variable this week. Brent crude recovered to around $73.90 on Monday, after declining in previous sessions, while on Tuesday it hovered around $73. The key isn't so much the single daily movement, but rather the fact that the market is oscillating between two opposing narratives: a geopolitical premium from Hormuz and the risk of a surplus if the reopening of the Strait actually accelerates. It's no coincidence that some analysts have lowered their estimates for Brent crude 2026 from $90.44 to $84.50 a barrel, a sign that the market is starting to price in less scarcity and more normalization.

Gold, however, did not fully benefit from the geopolitical tension. The precious metal remained above $4,000 an ounce, but was penalized by a strong dollar and higher real yields. At the end of the quarter, the balance sheet remained poor: gold was on track for one of its worst quarterly performances in recent years, with a monthly correction of more than 11%. Copper also showed greater relative strength, returning above $6.20 per pound, supported by structural issues related to AI, electrification, and infrastructure, but still sensitive to the dollar and interest rate expectations.

Rates and Currencies: The Dollar Remains Strong

In the bond market, the US 10-year bond remains in the 4.36-4.40% range, a level consistent with a Federal Reserve still perceived as restrictive. The decline in oil prices from its peaks reduces some of the inflation risk, but not enough to completely change the interest rate landscape. This is also because US data continues to fuel the possibility of longer-term high rates, if not further increases within the year.

In Europe, the 10-year German Bund remains close to 2.85%, while the euro/dollar exchange rate hovers around 1.14. The dollar continues to be supported by the yield differential and the perception that the United States, despite an unstable geopolitical environment, still offers superior growth and liquidity. The DXY hovered around 101, while the yen touched the 162 area against the dollar, its weakest level in about 40 years, raising expectations of possible Japanese intervention in the currency market.

Germany and Italy: less negative macroeconomic signals

Among European data, the positive surprise from German retail sales stands out. In May, they grew 1.1% monthly, versus expectations of 0.0%. This is important because it comes at a time when Germany remains the main weak point in the European cycle: more resilient consumption means a lower probability of a deep recession, although this is still not enough to speak of a structural recovery.

In Italy, however, the most significant data is inflation in June. The national index fell to 3.0% annually from 3.2% in May, while the harmonized European index rose to 3.1%. Core inflation also slowed to 1.6%, a favorable sign for the ECB. The cooling of Italian prices is reducing pressure for further immediate rate hikes, but the issue remains tied to energy: if Hormuz were to resurface, the inflation relief could be short-lived.

Lebanon, a fragile truce and the final picture

On the political front, Lebanon is a further source of uncertainty. The US-brokered agreement between Israel and Lebanon has sparked protests and criticism, especially because some in the Lebanese camp consider it unbalanced and insufficient to guarantee an Israeli withdrawal from the occupied areas. Hezbollah has called it a surrender, a sign that internal consensus remains very weak. This makes it more difficult to transform regional truces into true stabilization.

The market picture thus remains uncertain. US stocks are attempting to recover, Europe remains more selective, oil hovers around $70-$74, gold is struggling despite geopolitics, and interest rates remain the real brake on the appreciation of the most liquidity-sensitive assets. The week opens with a clear message: the markets want to believe in a truce in the Strait of Hormuz, but they are not yet willing to price in a lasting peace.