Oil and Rates Higher
June 16, 2025
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The equity market was softer on Friday given the uncertainty due to geopolitical tensions in the Middle East. Oil prices moved back above $70 per barrel after being closer to $60 at the start of the month.1 The implications of increased oil prices on higher inflation are outweighing the flight to safety bid in U.S. Treasuries, as the 10-year Treasury closed slightly higher. U.S. rates are continuing to move slightly higher this morning, with the 10-year hovering around 4.45%.2 China’s retail sales report beat expectations and is supportive of the Chinese consumer and economy, providing some relief to risk assets.3
Aside from geopolitics, the main report today is the June Empire State manufacturing survey.4 Markets will look for more stability and declining prices. On Wednesday, housing data and initial jobless claims will be released.5 Wednesday also brings the major macroeconomic event of the week with the June Federal Open Market Committee meeting and the updated Summary of Economic Projections.6 This week will also see accelerated Treasury auctions given the holiday-shortened week with markets closed on Thursday.
Sources:
1Trading Economics – U.S. Crude Oil; as of 6/16/25
2CNBC – 10-Year Treasury; as of 6/16/25
3CNBC – China’s May retail sales grow at fastest pace since December 2023 as subsidies help boost consumption; 6/16/25
4-6MarketWatch – U.S. Economic Calendar; as of 6/16/25
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