Weekly Economic & Financial Commentary: Few Signs of Tariff Inflation.This week was all about prices, and thus far, the expected tariff-induced inflation pickup has yet to appear in the hard data. Both consumer and producer price growth came in cooler than expected in May with only hints of tariff-related price pressures in specific categories.

U.S. Fed to Holds Rates as Canada's Retail Sales Show Resilience amid Tariffs.The U.S. Federal Reserve is widely expected to forego an interest rate cut again on Wednesday. The central bank has been on pause since December after cutting the fed funds rate by 100 basis points in the second half of 2024.

Natural Gas Price Forecast: Consolidates at Key Moving Average Support.Natural gas held weekly support above $3.50 on Friday, with improving moving averages suggesting strength and potential for a breakout toward $4.08 in coming sessions.

In New York, the Dow Jones Index dropped 770 points or 1.79 percent on Friday. Losses were led by Sherwin-Williams (-5.66%), Visa (-4.94%) and Nike (-3.74%).

Japan PM in call with Trump, reiterated Japan's use on US tariffs.Trump wants to increase tariffs on autos and other imports from Japan. Trump's administration also wants Japan to open up their economy for more imported US goods.

The Ibovespa index edged down 0.2% to close near 137,500 on Friday, pressured by escalating Israel-Iran tensions that dampened investor sentiment. Global markets retreated after Iran retaliated against Israel’s strikes on its nuclear and missile facilities, stoking fears of a wider conflict and driving demand for safe-haven assets. Investors also remained cautious ahead of updates on a potential US-China tariff truce. Domestically, focus shifted to the financial transactions tax, as House Speaker Hugo Motta signaled plans to push for a decree suspending the government’s proposed rate hike. On the corporate front, surging oil prices—up 7% amid Middle East unrest—boosted Petrobras shares by 2.5%. Meanwhile, risk-sensitive stocks declined, with Vale down 1.1%, Magazine Luiza falling 6.6%, and Bradesco slipping 0.7%. Embraer dropped 3.1% following a deadly Boeing plane crash in India that claimed 290 lives.

The S&P/TSX Composite Index fell 0.4% to close at 26,504 on Friday, pulling back from Thursday’s record high as escalating Israel-Iran tensions drove a shift toward safe-haven assets. The decline followed Iran’s retaliation for Israel’s strikes on its nuclear and missile facilities, with over 100 missiles reportedly launched, stoking fears of a broader conflict and fueling gains in gold and crude oil prices. Crude surged 7%, lifting energy stocks such as Canadian Natural Resources (+2.7%), Suncor (+4.3%), and Imperial Oil (+3.4%). Gold prices also rose 1% amid heightened geopolitical risk, boosting Agnico Eagle (+1.9%) and Barrick Gold (+2.8%). Despite Friday’s dip, the index notched its third consecutive weekly gain, rising 0.6%, supported by optimism over a potential Canada-US trade deal ahead of the upcoming G7 summit. US Treasury Secretary Scott Bessent confirmed he will attend the summit in Canada alongside President Donald Trump and meet with Prime Minister Mark Carney.

Central bank meetings will dominate the economic calendar next week.Next week will be a pivotal one for global monetary policy, with key central banks scheduled to announce their latest decisions. The Bank of Japan (Tuesday), Federal Reserve (Wednesday), Swiss National Bank (Thursday), and Bank of England (Thursday) will all hold policy meetings.

Uruguay’s GDP expanded by 3.4% in the March quarter of 2025, easing slightly from 3.5% growth in the previous quarter, after reaching its fastest pace since the June quarter of 2022. The slight slowdown was driven by softer export growth, which rose 4.2% compared to 4.4% in Q4. Meanwhile, imports accelerated to 5.6%, up from 3.8%, and government spending also picked up, growing 4.3% versus 3.3% in the prior quarter. Capital formation showed notable improvement, surging 11.9% after a 5.4% increase in Q4. However, household consumption growth slowed to 2.1% from 2.7%, signaling some weakness in domestic demand.

Paraguay's trade deficit widened to USD 538.4 million in May 2025, reversing a surplus of USD 420.9 million in the same period last year. Registered exports fell 8.4% year-over-year to USD 4.53 billion, driven by a 21% drop in primary products, especially soybeans (-26.8%), partly offset by gains in wheat and corn. Agro-industrial goods rose 3.3% on strong beef exports, and industrial manufactures increased 2.7%, led by aluminum and electrical cables. Energy exports dropped 11.9%. Meanwhile, registered imports grew 5.4% to USD 6.85 billion, fueled by increased purchases of industrial goods (+9%), agro-industrial goods (+11.9%), and primary products (+14.9%). Fuel and lubricant imports declined 19.1% due to lower diesel and gasoline demand. The shift reflects both falling external sales and stronger domestic demand.

Natural Gas, WTI Oil, Brent Oil Forecasts – WTI Oil Climbs Above $73.00 Amid Israel – Iran Conflict.Oil markets skyrocketed as traders reacted to the situation in the Middle East.

US stocks closed sharply lower on Friday as risk appetite faded after Iran denounced Israel’s airstrikes as a “declaration of war” and responded with missile attacks late Friday local time. The strikes targeted Iran’s nuclear and military facilities, significantly escalating geopolitical tensions and unsettling global markets. The S&P 500 and Nasdaq dropped 1.1% and 1.3% respectively, while the Dow Jones tumbled 769 points. Financials and tech led the losses, with Nvidia down 2.1%, Apple off 1.4%, and Visa and Mastercard sliding over 4%. Airline stocks also sank, with American, Delta, and United down between 4.5% and 5%. Meanwhile, energy and defense shares outperformed as oil prices surged nearly 7% on supply concerns; Exxon rose 2%, and Lockheed Martin, RTX, and Northrop Grumman climbed more than 3%. On the week, the S&P 500 is up 0.5%, while the Dow and Nasdaq are set to lose 1.5% and 0.8%, respectively.

Oil Soars 40% In 2 Months — Is $100 The Next Stop?.Crude Oil prices have surged over 40% in just two months, propelled by rising geopolitical tensions in the Middle East, a weakening U.S dollar and rekindled inflationary pressures.

Pre-FOMC U.S. Dollar Price Action Setups: EUR/USD, USD/JPY.The US Dollar broke down to a fresh three-year low this week, and EUR/USD broke out. The big question now is whether the Fed lays the groundwork for rate cuts in the second-half of the year.

Solar Energy Index increased to a 4-week high of 35.20 USD. Over the past 4 weeks, Solar Energy Index gained 0.03%, and in the last 12 months, it decreased 22.87%.

France's Macron: Iran carries heavy responsibility the destabilization of the region.France's Macron: Iran carries heavy responsibility in the destabilization of the region. We cannot live in a world where Iran has nuclear weapons.

Brent crude oil futures rallied over 6% to $73.7 per barrel on Friday, paring some gains after hitting their highest level since February, as fears of a broader conflict in the Middle East intensified following Israel’s strike on Iran. While the attacks did not directly target oil infrastructure, investors remain wary of potential retaliation, especially given Iran’s strategic control near the Strait of Hormuz—a critical chokepoint for global oil shipments. Iran's April crude output stood at 3.305 million barrels per day, underscoring the region’s vital role in global energy supply. Adding to the bullish sentiment, data from the International Energy Agency showed a larger-than-expected drop in U.S. crude inventories last week, suggesting firm demand. Despite mounting geopolitical tensions, the IEA reassured markets that it holds 1.2 billion barrels of emergency reserves and stands ready to intervene if necessary.

WTI crude oil futures surged over 6% to $72.70 per barrel on Friday, paring some gains after hitting their highest level since February, as fears of a broader conflict in the Middle East intensified following Israel’s strike on Iran. While the attacks did not directly target oil infrastructure, investors remain wary of potential retaliation, especially given Iran’s strategic control near the Strait of Hormuz—a critical chokepoint for global oil shipments. Iran's April crude output stood at 3.305 million barrels per day, underscoring the region’s vital role in global energy supply. Adding to the bullish sentiment, data from the International Energy Agency showed a larger-than-expected drop in U.S. crude inventories last week, suggesting firm demand. Despite mounting geopolitical tensions, the IEA reassured markets that it holds 1.2 billion barrels of emergency reserves and stands ready to intervene if necessary.

Geopolitical tensions in the Middle East will remain in focus next week following Israel’s strike on Iran’s nuclear facilities, heightening fears of a broader regional conflict. Markets will also be closely watching any progress on trade negotiations between the US and its key partners. Meanwhile, attention shifts to the G7 Summit in Canada, where leaders of the world’s largest economies will meet to discuss major global challenges. It’s also a busy week for monetary policy decisions. The Federal Reserve, People’s Bank of China, Bank of Japan, and Bank of England are all expected to keep interest rates unchanged. Decisions are also due from central banks in Switzerland, Sweden, Norway, Turkey, Brazil, Indonesia, the Philippines, and Taiwan. On the data front, key releases include US retail sales and industrial production, UK inflation, Germany’s ZEW economic sentiment index, China’s industrial production and retail sales, and Japan’s trade data.

U.S. Dollar Pulls Back From Session Highs Amid Geopolitical Developments: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY.Demand for safe-haven assets increased after Israel attacked Iran's nuclear-related facilities, but traders have already started to sell the dollar.

United States Baker Hughes US Oil Rig Count fell from previous 442 to 439.United States Baker Hughes US Oil Rig Count fell from previous 442 to 439

Wheat futures rallied 3% to above $5.40 per bushel on Friday, bouncing back from a four-week low amid bargain buying and improved sentiment across the grain complex. The recovery was supported by strength in soybeans and corn, which surged following the Biden administration’s proposed biofuel blending mandate. Traders viewed wheat’s recent dip as a buying opportunity, particularly with global supply concerns lingering. Additional momentum came from a sharp rise in crude oil prices after Israel launched airstrikes on Iran, heightening geopolitical risks and boosting broader commodity markets. Wheat also benefited from technical buying and the improved market tone. Meanwhile, the USDA slightly raised its 2025/26 U.S. wheat supply outlook, projecting total production at 1.921 billion bushels—up 115,000 from last month—thanks to increases in Soft Red and White Winter wheat that offset lower Hard Red Winter output.

Soybean futures climbed above $10.65 per bushel on Friday, hitting a three-week high after the Trump administration proposed biofuel blending requirements that surpassed market expectations. The rally followed the Environmental Protection Agency’s plan to increase the volume of biofuels that refiners must blend into the nation’s fuel supply over the next two years. Soyoil, a key biodiesel feedstock, surged on the news. Analysts said the move would significantly boost domestic soybean crush demand in 2026 and 2027. The proposal was seen as a major victory for the biofuels industry, which had been actively lobbying for such changes. Adding to the bullish sentiment, soybean prices were further supported by a sharp rise in crude oil prices after Israel launched airstrikes on Iran early Friday.

Frankfurt's DAX plunged 1.1% to 23,516 on Friday, hitting a month-low low and booking a 3.2% fall for the week, as escalating Middle East tensions rattled global markets. The sell-off was driven by Israel’s wave of airstrikes on Iran, targeting nuclear infrastructure and military assets, reportedly killing two top Iranian commanders. In retaliation, Iran launched drone attacks and reportedly pulled out of planned nuclear talks with the US, fueling fears of continued escalation and a broader regional conflict. On the corporate side, losses were broad-based, with Adidas (-2.8%), Porsche (-2.5%), and SAP (-2.5%) among the biggest decliners. On the other hand, Rheinmetall (2.7%), RWE (1%), and Daimler Truck Holding (0.7%) rose the most.

Major European indices close lower for the day as a geopolitical risks weigh on sentiment.European stocks ended the day broadly in negative territory, weighed down by geopolitical tensions and weaker global sentiment. All major regional indices posted losses, with Italian and Spanish markets underperforming.

The CAC 40 index fell 1.1% to close at 7,684 on Friday, marking a third consecutive session of losses and a sharp weekly drop, as escalating tensions in the Middle East weighed on global markets. Early Friday, Israel launched large-scale airstrikes against Iran, hitting military and nuclear targets, and declared a state of emergency amid warnings of imminent retaliation. Iranian state media reported, without confirmation, the possible death of Revolutionary Guard commander Hossein Salami. Tehran vowed a harsh response against Israel and the US, though Washington said the strikes were Israel's independent action in self-defense. On the domestic economic front, final estimates confirmed that the annual inflation rate fell to 0.7% in May 2025, from 0.8% in March and April, reaching the lowest level since February 2021. Among stocks, Stellantis (-3.5%), Accor (-3.4%) and Teleperformance (-2.9%) posted the steepest losses, while Engie (1.3%) and Orange (1.0%) advanced.

The FTSE 100 fell 0.4% to close at 8,851 on Friday, pulling back from Thursday’s record high, as escalating tensions in the Middle East sparked a broad-based sell-off across global equity markets. However, the decline in the UK benchmark was more modest compared to heavier losses seen across its European peers. Israel launched widescale strikes against Iran, marking a significant escalation in hostilities that fueled fears of a broader conflict in the region. Shares of International Airlines Group were among the hardest hit, falling 4.5%. EasyJet (-3.5%), GSK (-2.5%) and JD Sports (-1.9%) also booked big losses. In contrast, oil, gas, and defense stocks outperformed amid heightened security risks and rising energy prices, namely BAE Systems (3.3%), BP (2%), Fresnillo (1.7%) and Shell (1%). On the week, the FTSE 100 edged up 0.1%.

The FTSE MIB index dropped 1.3% to close at 39,438 on Friday, as european shares hit a three-week low as Israel's attack on Iran rattled global markets and drove investors toward safe-haven assets. The renewed geopolitical tension compounded existing concerns over global trade, with uncertainty lingering around US President Donald Trump's tariff policies. On the corporate front, the biggest laggards were Nexi (-4.9%), Campari (-3.4%), Stellantis (-3.4%), and Azimut (-3.2%). Meanwhile, energy companies outperformed as oil prices surged following the escalation in the Middle East. Italgas (+1.1%), A2A (+0.9%), and Eni (+1%) all advanced. Defense firm Leonardo (+0.4%) also gained amid the heightened geopolitical risks.

In Milan, the FTSE MIB Index dropped 510 points or 1.28 percent on Friday. Losses were led by Nexi (-5.13%), Davide Campari-Milano (-3.40%) and Azimut Holding (-3.20%).

In Frankfurt, the DAX Index decreased 255 points or 1.07 percent on Friday. Losses were driven by Puma (-2.94%), Adidas (-2.77%) and Porsche AG (-2.45%).