📉 Global Economic Update – June 20, 2025

Stay informed with today’s key macroeconomic and market highlights from the U.S., Japan, Germany, and global equity markets.


đŸ‡ș🇾 U.S. Manufacturing Remains in Contraction

The Philadelphia Fed Manufacturing Index held steady at -4.0 in June 2025, unchanged from May and below market expectations of -1. This marks another month of subdued regional manufacturing activity.

Key Highlights:

  • New orders stayed positive but weakened.
  • Shipments improved and turned positive.
  • Employment fell sharply, reaching its lowest level since May 2020, signaling a drop in factory jobs.
  • Price pressures eased slightly but remain historically high.
  • Outlook: Business optimism is waning, with fewer firms expecting growth in the next six months.

👉 Takeaway: Continued weakness in manufacturing could influence the Fed’s policy stance going forward.


đŸ‡ŻđŸ‡” Japan Inflation Eases, Core CPI Surges

Japan’s annual inflation rate fell slightly to 3.5% in May 2025, down from 3.6% in the previous two months. However, core inflation (excluding fresh food and energy) rose to 3.7%, the highest in over two years.

Breakdown:

  • Declines in prices for clothing, healthcare, and household goods.
  • Housing, recreation, and communications saw rising costs.
  • Rice prices skyrocketed over 100% year-over-year, showing limited impact from government price controls.

👉 Takeaway: Inflation remains a concern ahead of Japan’s summer elections, adding complexity to BoJ policy decisions.


đŸ‡©đŸ‡Ș German Producer Prices Drop Sharply

Germany’s Producer Price Index (PPI) fell 1.2% year-over-year in May 2025, marking the third straight month of decline and the sharpest drop since September 2024.

Details:

  • Energy prices fell sharply:
    • Electricity: -8.1%
    • Natural gas: -7.1%
    • Heating oil: -10.2%
  • Excluding energy, producer prices rose 1.3% YoY.
  • Monthly PPI dropped 0.2%, better than the expected 0.3% decline.

👉 Takeaway: Cooling input prices support the ECB’s disinflation narrative but won’t remove all pressure from sticky core inflation.


📊 U.S. Markets Set for a Lower Open

After Wednesday’s Juneteenth holiday, U.S. stock futures point to a slightly lower open as investors react to:

  • Ongoing geopolitical tensions in the Middle East.
  • President Trump’s delayed decision on Iran, while strikes from Israel continue.
  • Oil prices retreat, weighing on energy stocks.
  • CarMax expected to open 10%+ higher after strong earnings.
  • Triple Witching Day could increase market volatility.

👉 Takeaway: Risk appetite remains fragile. Expect choppy trading as geopolitical uncertainty and technical factors weigh on sentiment.


📌 Final Thoughts

Economic data continues to paint a mixed global picture—slowing growth, sticky inflation, and rising geopolitical risks. Investors should brace for near-term volatility and monitor central bank signals closely.

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    🌍 Market Update: European Stocks Dip Amid Geopolitical Risks, Fed Decision in Focus

    European Markets Open Lower

    European equity markets were set to open lower on Wednesday as investors digested rising geopolitical tensions and awaited the U.S. Federal Reserve’s interest rate decision.

    • Euro Stoxx 50 futures slipped 0.3%
    • Stoxx 600 futures edged down 0.2%

    Sentiment was hit by comments from U.S. President Donald Trump, who demanded Iran’s “unconditional surrender” and threatened to strike Supreme Leader Khamenei, further escalating tensions in the Middle East.

    Investors are also eyeing:

    • UK inflation data
    • Sweden’s Riksbank policy decision

    Both could influence European interest rate expectations.


    📉 Japan’s Exports Decline Amid Tariff Pressures

    Japan’s exports fell 1.7% year-on-year in May 2025 to a four-month low of JPY 8.13 trillion, reversing a 2% gain in April. This marked the first decline since September 2024.

    • Shipments to the U.S.: ↓ 11.1%
    • Exports to China: ↓ 8.8%
    • Increases: EU (+4.9%), Russia (+5.2%), ASEAN (+0.1%)

    Trade War Impact

    The decline came as U.S. tariffs bite, especially on autos, auto parts, and chip machinery. Japan is seeking exemption from 25% U.S. auto tariffs, while Trump has doubled duties on steel and aluminum to 50%. A 24% retaliatory tariff from Japan is scheduled for July 9, unless a deal is reached.


    đŸȘ™ Gold Slips as Dollar Gains, But Central Banks Remain Bullish

    Gold prices edged lower to around $3,380/oz on Wednesday. A stronger U.S. dollar weighed on prices, even as Middle East tensions drove safe-haven demand.

    Key Drivers:

    • Israel conducted strikes near Tehran
    • Iran launched missiles in retaliation
    • Trump held a national security meeting, sparking fears of U.S. military involvement

    Meanwhile, a World Gold Council survey revealed:

    • 95% of central banks expect global gold reserves to rise
    • 43% plan to increase their own holdings — a record high

    đŸ’” U.S. Dollar Eases After Tuesday Surge

    The U.S. Dollar Index (DXY) dipped slightly to 98.6 after a near 1% gain on Tuesday, driven by safe-haven flows due to the Israel-Iran conflict.

    What to Watch:

    • Federal Reserve is expected to hold rates steady
    • Market focus is on forward guidance
    • Upcoming U.S. data: housing starts and jobless claims

    Despite weaker retail sales in May, consumer spending remains resilient, underpinned by strong wage growth.


    📌 Takeaway

    Global markets remain on edge as geopolitical risks, trade tensions, and monetary policy uncertainty collide. Investors are bracing for potential volatility spikes driven by:

    • Fed’s policy stance
    • Ongoing Middle East conflict
    • Looming U.S.-Japan tariff deadlines

    Stay tuned for more updates and subscribe for a consultation from Swap Hunter and real-time market insights.

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      How Much of Your Portfolio Should Be in Cash or Forex?

      When building or managing a portfolio, one of the most overlooked but crucial components is your cash and FX (foreign exchange) allocation. While many investors focus on stocks, crypto, or real estate, holding the right amount of liquid assets can significantly enhance your financial stability, flexibility, and overall strategy.


      Why Cash and FX Matter

      Cash provides liquidity. It allows you to take advantage of opportunities quickly, cover unexpected expenses, and weather downturns without panic selling. FX (foreign currencies like USD, EUR, or JPY) can serve as a hedge, especially if you’re exposed to international assets or geopolitical risk.


      General Guidelines Based on Investor Type

      1. Long-Term Investors (Passive Strategy)

      If you’re primarily focused on long-term growth with a buy-and-hold strategy, a smaller cash allocation is typical.

      Portfolio SizeSuggested Cash/FX Allocation
      <$100,0005% – 10%
      $100,000+2% – 5%

      Purpose: Emergency liquidity, buying dips, or portfolio rebalancing.


      2. Active Traders and Speculators

      If you trade crypto, stocks, or CFDs, you need more liquidity to remain agile.

      Strategy TypeSuggested Cash/FX Allocation
      High-frequency trading5% – 20%
      Swing trader10% – 30%
      CFD/multi-asset trading20% – 40%

      Why more cash? To manage margin, fund trades quickly, and handle drawdowns.


      3. Conservative/Wealth Preservation Investors

      Age and risk appetite affect how much cash you should hold.

      Age GroupSuggested Cash Allocation
      Under 405% – 10%
      40–6010% – 20%
      60+20% – 40%

      Purpose: Reduce volatility, maintain access to funds, and protect principal.


      When to Increase Your Cash/FX Position

      • Anticipating a market downturn or recession
      • Planning for a large purchase or investment
      • Experiencing high portfolio volatility
      • Preparing to rebalance or rotate assets

      Rule of Thumb

      “Keep enough in cash and FX to sleep well at night, but not so much that inflation eats it away.”


      Final Thoughts

      Your ideal cash or FX allocation depends on your goals, timeline, and risk tolerance. Revisit it regularly, especially in changing market conditions. Liquidity is power—but too much can be a drag on growth.

      Need help figuring out your ideal allocation? Organise a free consultation with Swap Hunter to ensure your portfolio is optimized for both opportunity and protection.

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        📊 Market Calm Before the Storm: Why Swap-Hunter Thrives in Uncertainty

        As markets await U.S.–China trade talks and critical inflation data, Swap-Hunter’s trading system gives you the tactical edge to profit—no matter the volatility.


        Global stock markets opened cautiously this week, with U.S. futures hovering near flat. For many traders, this signals indecision. But at Swap-Hunter, this is where our trading system shines.

        Whether it’s geopolitical risk, inflation uncertainty, or headline-driven swings, our system thrives on structure—not speculation.

        🌍 What’s Moving the Market This Week?

        • U.S.–China Trade Talks (June 9) – High-level negotiations resume in London.
        • CPI and PPI Inflation Data – Key indicators ahead of the Fed’s June meeting.
        • Fed Rate Decision (June 17–18) – Rate cut speculation building.
        • Geopolitical Risk – Domestic protests and National Guard deployment add market tension.

        🔄 What This Means for Traders

        While traditional systems wait for breakouts or trend confirmations, Swap-Hunter works within the noise. Our system capitalizes on:

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        • Institutional Footprints – Identify where real volume is being deployed—not just where price moves.

        📈 S&P 500 Snapshot

        The S&P recently reclaimed the 6,000 level and is now just 2.3% off all-time highs. Rather than chase tops, our system monitors rotational liquidity and traps.

        S&P500 Rotation Zones

        Example chart: Rotation zones identified by the Swap-Hunter system

        ⚙ Why Swap-Hunter Is Built for This

        Markets are not always trending. In fact, they spend most of their time consolidating. This is where Swap-Hunter’s rules-based, volatility-adaptive system gives you:

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        ✅ Your Next Move

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        Tags: U.S.–China Trade, CPI, PPI, Fed Meeting, Trading System, Swap-Hunter, S&P 500, Market Structure

        US Job Data Cools Less Than Expected in May – What It Means for Markets and Workers


        How to Trade Forex and Jobs Data with Swap Hunter

        In a surprising turn, the latest US job data suggest that the labour market is more resilient than analysts had projected. According to the recent payroll data, US nonfarm employment increased by 139,000 jobs in May, slightly lower than April’s revised figure of 147,000 but higher than the consensus estimate of 130,000.

        This unexpected uptick challenges earlier concerns of a sharper slowdown, amid fears of new tariffs and broader economic headwinds. While the pace of job creation has softened, the labour market continues to send mixed signals that demand a closer look.

        Key Highlights:

        • May Job Growth: +139K (vs. 130K expected)
        • April Revisions: Downwardly adjusted to +147K
        • Unemployment Rate: Steady at 4.2%

        Sector-Specific Trends

        Employment growth wasn’t evenly distributed. Some industries fared better than others:

        • Healthcare, leisure and hospitality, and social assistance showed steady gains, signaling continued demand for services and care-related roles.
        • Manufacturing and federal government jobs experienced a decline—potential early signs of budget tightening or shifting production dynamics due to supply chain constraints and tariff concerns.

        This pattern reinforces the notion that while the US job engine is still running, it’s shifting gears.

        What This Means for Workers

        For job seekers, the positive news is that the unemployment rate remains stable, and key service sectors continue to hire. However, those in more cyclical or government-tied industries may want to stay alert to shifting priorities and potential policy changes.

        Implications for Markets and Policy

        Wall Street had braced for a sharper pullback in hiring, so this report could bring temporary relief. Still, policymakers at the Federal Reserve will likely keep a close eye on wage trends and broader economic indicators before making any interest rate adjustments.

        If the economy continues to tread this fine line—neither overheating nor collapsing—it may lend weight to the case for a “soft landing” scenario, which economists have debated for months.

        Final Thoughts US Jobs Data

        May’s job data serves as a reminder that economic momentum doesn’t vanish overnight—it tapers, recalibrates, and shifts. For businesses and workers alike, staying flexible and responsive to these trends will be crucial in the coming months.


        Stay tuned to Swap Hunter for regular updates on the economy, job market trends, and how these shifts impact your career, investments, and day-to-day decisions.

        Have thoughts on how these trends could affect your industry? Drop your insights in the comments or connect with us on social media.


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