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1. The technical picture looks toppish with upside becoming limited.

Fundamental investors will certainly look for opportunities in any pullback, but with global equities less than 1% off their highs, scope for bargain hunting is limited. There’s also the prospect that higher energy costs from a prolonged or escalating conflict would fuel inflation, discouraging bold long calls.

A wait-and-see approach extending as far as second-quarter earnings might thus prove popular.

Deeper into the summer, things might well be a bit more volatile, with more swing days possible. Buying from hedge funds has already vanished, and support from buybacks will be next as the blackout period looms large from mid-June.

2. Dollar back at the lows.

The dollar’s strength last week looked like classic risk aversion, but that bounce wasn’t a safe haven bid, it was commodity-driven. The US’s position as the world’s largest oil producer is likely helping the greenback, however, erratic US policymaking will continue to be a headwind for the USD.

"The 800-pound gorilla in the room is the U.S. tariff policy". "We've got the July 9 date that the so-called reciprocal tariffs are supposed to end. ... And so that sort of hangs over the market."

Also, expectations for the Federal Reserve matter much more. Investors have priced in two 25bps rate cuts by year-end, driven by softening US data, and some traders say that the market may overreact further on a dovish pivot.

3. JPMorgan expects outperformance of domestic stocks in the Eurozone.

“We think USD will resume declines. The Euro has risen 12% against the dollar this year, while the Yen and GBP have increased by 9%. Our FX strategists anticipate that these currencies will continue to gain against the dollar.”

“If USD weakens further, this will likely remain a drag for exporters performance relative to domestic stocks.”

“Also, domestic names are not expensive.” “Eurozone domestic stocks are currently trading at a 34% discount compared to exporters.”

4. Gold and silver spiking on geopolitical tensions.

Escalating geopolitical tensions between Israel and Iran are keeping gold’s safe-haven appeal intact, with any move above $3,500 an ounce potentially driving prices toward $3,716, according to Commtrendz Research. Gold’s immediate upside target is $3,500. A breach above that level could pave the way for a near-term move toward $3,716. However, an unexpected drop below $3,380 could push the metal into a sideways trend, with a mild downward move toward the $3,330 area or even lower.

5. EIA lifts power consumption forecast again.

EIA (U.S. Energy Information Administration) released its monthly short-term energy outlook last week.

The US commercial electricity consumption forecast was lifted to +3% in 2025 and +5% in 2026.

In the prior outlook, the forecast was an average of +2% annually through 2026.

Additionally, EIA expects US electricity generation this summer will increase by 1% y/y compared to the summer of 2024 as a result of growing power demand from the commercial and industrial sectors.

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