# What to watch this week (16 June 2025)

_A quick look ahead to this week’s key events, including the Israel-Iran conflict, central bank rate decisions, and UK inflation data._

Neil Woodford · 16 June 2025 · 3 min read

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This is the first in a regular series that will complement the weekly roundups, the first of which I wrote on Friday.

These briefings will aim to keep you prepared and informed ahead of important events or data releases that I know are coming up in the week ahead. I won’t write about everything, but will try to focus on the most important.

Inevitably, I won’t always mention the events financial markets decide to focus on, and sometimes, there may be nothing of great significance to write about, but I hope you find these briefings useful and that they will help you judge the significance of events as they unfold.

–Neil

## Israel and Iran

This week, the most important event influencing financial markets is the war between Israel and Iran. Given the region's significance to energy supplies and prices, this military conflict can potentially unsettle global investors and ultimately the global economy.

However, thus far, I have been slightly surprised by the muted reaction. Asian equity markets have risen today, and so have markets across Europe. Bonds, on the whole, are up a bit and in most cases, ten-year yields are all below the average of the last three months.

As usual, I expect US financial markets to set the tone for the rest of the world, but judging by the futures markets, US equities will also go up today. Understandably, the oil price is up significantly, but at $75 per barrel, it is just back to where it was at the beginning of April this year.

An escalation of the conflict that draws in other nations, or an Iranian attack on shipping in the Gulf of Hormuz could of course create further uncertainty for financial markets, but so far this conflict has not dented confidence as much as it might have done had the world not already become sadly acclimatised to military conflict in the region over the last two years.

It would be foolish to try to predict how this conflict will unfold in the days and weeks ahead, but my guess is that if it remains relatively contained, it will not destabilise global investor confidence.

## Interest rate decisions

This week is an important one for central banks and interest rate decisions. The FED, MPC and the Swiss National Bank all meet on Wednesday (the MPC announces its decision on Thursday).

The Swiss are expected to cut rates to zero, but the FED, despite pressure from President Trump, and the MPC are expected to keep rates on hold. I think this is appropriate in the case of the FED, but in my view, the MPC should cut rates by 25bps. If they don’t decide to cut rates, I am very confident that they will at their August meeting (the MPC doesn’t meet in July).

The MPC and the FED will decide what to do armed with more macro data. The FED will see retail sales and initial jobless claims before deciding what to do, and the MPC will see May’s UK inflation data, which is published on Wednesday. The market expects CPI inflation to fall to 3.3% from April’s revised 3.4%.

Unfortunately, confusion still surrounds this data series. Bloomberg and Google seem to think April’s CPI was 3.5%, but this is wrong. It was revised down to 3.4% following another ONS error in the calculation, this time related to vehicle excise duty.

## G7 meeting

There is a G7 meeting in Canada this week, and geopolitics will understandably be at the top of the agenda, alongside tariffs. I don’t expect this meeting or its final communique to be a significant event for global financial markets but it's something I'll keep an eye on.