Israel-Iran Conflict Boosts Oil Prices; US-China Trade Talks Restore Rare Earths Supply
Key Takeaways
- Israeli strikes on Iran drove Brent crude to $78.50, causing stock market declines.
- US, China deal resumes rare earths supply; US tariffs remain at 145%.
- Trump's tariffs estimated to cost the global economy $1 trillion and 690,000 US jobs.
- IMF and Pimco highlight trade tensions impacting global growth, challenging central banks.
- India halts rare earth exports to Japan, boosting domestic production amid China restrictions.
Top Stories
Israel-Iran conflict drives oil prices above $78, global markets react with volatility
On June 12-13, 2025, Israeli strikes on Iran caused Brent crude to surge to $78.50 per barrel and WTI near $77.62, triggering global stock market declines and increased volatility. Iran retaliated with drone attacks, escalating regional instability and impacting energy markets.
US-China trade talks restore rare earths supply, tariffs on China remain at 145%
On June 12, 2025, US and China reached a deal to resume rare earths and magnets supply in exchange for Chinese student visa access, while US tariffs on China remain at 145%. Goldman Sachs lowered US recession risk citing eased trade tensions and improved growth forecasts.
Trump's tariffs cost global economy $1 trillion; Euro rises amid US trade and Middle East tensions
In June 2025, Trump's tariff policies were estimated to cost the world $1 trillion and 690,000 US jobs, while the Euro surged to a three-year high against the dollar amid trade uncertainties and Middle East conflicts.
IMF and Pimco highlight trade tensions and fragmentation impacting global growth
In June 2025, IMF and Pimco emphasized global economic uncertainty due to US-China trade tensions and rising regional trade blocs, forecasting heightened market volatility and challenges for central banks.
India halts rare earth exports to Japan, boosts domestic production to reduce China reliance
On June 13, 2025, India instructed IREL to suspend rare earth exports to Japan and expand domestic mining and processing to secure supply chains amid China's export restrictions.
Central Bank Actions
BoE expected to hold rates at 4.25% on June 19 despite UK job market weakness
On June 13, 2025, BoE policymakers signaled a cautious approach to rate cuts amid falling employment and cooling wage growth, with markets expecting rates to remain at 4.25% before cuts later in 2025.
Fed rate cuts anticipated from September as inflation cools; Trump criticizes Powell
In June 2025, markets increasingly expect Federal Reserve rate cuts starting September due to softer inflation and labor data, while Trump criticized Fed Chair Powell and urged rate reductions to save $600 billion annually.
Financial Health
Argentina seeks $500M bond auction with IMF support to control inflation and rebuild reserves
In June 2025, Argentina planned a $500 million bond auction and monthly dollar bond issuances supported by the IMF to consolidate disinflation and strengthen monetary reserves.
Global Trade
US advances UK trade deal; Trump pressures multiple nations with tariff ultimatums
By mid-June 2025, the US reached a trade agreement with the UK while Trump threatened new tariffs on automotive imports and sent ultimatum letters to dozens of countries. Japan and other nations continue tariff talks amid stalled progress.
Policy Watch
May inflation data and controlled food prices shape RBI and global inflation outlooks
In June 2025, May producer-price data and controlled food inflation supported RBI's flexible policy stance, with India’s FY26 headline inflation forecasted around 3% amid monitored monsoon impacts.
Recession Watch
US unemployment surpasses 7 million, raising questions about recession labeling
On June 12, 2025, US unemployment exceeded 7 million, a level historically associated with recessions, prompting debate over official recession recognition and market risk pricing.